Medicaid Improper Payments Exceed $200 Million for Deceased Individuals

Tue Dec 23 2025 16:33:25 GMT+0200 (Eastern European Standard Time)

A new report reveals that Medicaid programs issued over $200 million in improper payments to healthcare providers for services rendered to deceased beneficiaries from 2021 to 2022. The report emphasizes the need for stricter audits and sharing of vital data to curb these discrepancies.

According to a report from the Department of Health and Human Services, Medicaid programs in the U.S. made more than $207 million in improper payments to providers on behalf of deceased individuals in the last two years. The Office of Inspector General supports new provisions for states to audit Medicaid beneficiary lists to prevent such occurrences in the future. The report highlights the necessity for improved data sharing, specifically from the Full Death Master File, to recover incorrect payments made to health care providers.

WASHINGTON (AP) — Medicaid programs made more than $200 million in improper payments to health care providers between 2021 and 2022 for people who had already died, according to a new report from the independent watchdog for the Department of Health and Human Services.

However, the department's Office of Inspector General has expressed optimism that a new provision in the Republicans’ One Big Beautiful Bill will mandate states to audit their Medicaid beneficiary lists, potentially helping to mitigate these improper payments in the future.

Improper payments of this nature are “not unique to one state, and the issue continues to be persistent,” stated Aner Sanchez, deputy regional inspector general at the Office of Audit Services. Sanchez has been investigating this issue for the last decade.

The report cited that from July 2021 to July 2022, over $207.5 million in managed care payments were made on behalf of deceased enrollees. To enhance recovery efforts for incorrect payments, the watchdog urges the federal government to improve information sharing with states, particularly through the Full Death Master File — a database containing over 142 million records dating back to 1899.

Due to privacy laws aimed at preventing identity theft and fraud, the sharing of data from the Full Death Master File has been highly restricted.

The recent tax and spending bill signed into law by President Donald Trump will expand the usage of the Full Death Master File, requiring Medicaid agencies to quarterly audit their provider and beneficiary lists beginning in 2027 to prevent payments made to deceased individuals.

This report, released on Tuesday, marks the initial comprehensive examination of improper Medicaid payments nationally. Since 2016, the inspector general's office has conducted 18 audits on various state programs and discovered approximately $289 million in improper managed care payments made on behalf of deceased enrollees.

Earlier this year, the Treasury Department reported reclaiming over $31 million in federal payments that were improperly issued to deceased individuals, in part, due to a pilot program leveraging access to the Full Death Master File.

Meanwhile, the Social Security Administration has been making unusual adjustments to its records, complicating data usage. For example, there have been instances where the Trump administration reclassified thousands of living immigrants as deceased.