The level of fraud in government programs is astonishing. Every day we read about another scandal involving the government’s ‘safety net.’ Many of us are wondering how much of our tax dollars are funding fraud rather than a ‘safety net.’
On Wednesday, The Federalist reported:
The ongoing scandal regarding Minnesota’s welfare-industrial complex demonstrates the extent to which government-created graft has “hidden” in front of the nation’s noses for not just years but decades. Another report released just before Christmas illustrates the depths of those fraudulent payments.
Last summer, I wrote here about a report by Louisiana’s legislative auditor highlighting nearly $10 million in Medicaid payments that state made on behalf of deceased beneficiaries between February 2019 and last March. Perhaps unsurprisingly, the most recent report shows that this type of government waste and abuse — or, depending on one’s perspective, fraud by insurance companies, who receive payments for “covering” dead people — occurs with regularity nationwide.
The report came from the Department of Health and Human Services’ Office of Inspector General (OIG) and covered payments made to Medicaid managed care organizations from July 2021 through June 2022. The report arises because in most (but not all) cases, state Medicaid agencies do not directly administer benefits (i.e., pay doctors and hospitals who treat beneficiaries). Instead, they contract with managed care organizations and pay insurers a capitated (i.e., per-person) amount every month for that coverage. That dynamic represents a clear opportunity for fraud: If no one reports the beneficiary as deceased, the insurer will get paid to “cover” that person indefinitely.
The article notes:
A footnote in the report demonstrated how this type of abuse is a choice that states consciously make. OIG noted that “Connecticut, Maine, Mississippi, Nebraska, South Dakota, and Wyoming had no capitation payments with a service date after the month of the enrollee’s death.” In other words, these six states all imposed proper safeguards to ensure that Medicaid dollars did not go to dead beneficiaries, while 35 other states did not, leading to the improper payments. (The remaining states did not have significant amounts of capitated payments to managed care organizations and therefore would not face this type of fraud.)
It’s time for all states to put in place laws that protect taxpayer money. The government should not be paying money to dead people!