The Department of Health and Human Services' financial watchdog, the Office of the Inspector General (OIG), has found that Medicare paid for $126 million in care provided to undocumented immigrants and prisoners, two groups of seniors in most cases excluded from the program.
Between 2009 and 2011, the OIG found in a round of audits, the Centers for Medicare & Medicaid Services (CMS) reimbursed providers for $33.5 million in care for 11,619 prisoners, while paying $91.6 million for care provided to 2,575 undocumented immigrants.
CMS's Medicare data systems take additional identification data from the Social Security Administration and other federal agencies, and in the case of undocumented residents, according to the OIG, the systems "were not adequate to detect and recoup the improper payment."
For prisoners -- a category including people under arrest, in prison, living in a halfway house or under home detention -- the policy exemptions were being varyingly interpreted among contractors and providers. Medicare will pay providers in cases where the incarcerated person is living in a state or municipality that requires convicted felons to repay the cost of the services, with CMS requiring the providers to use an "exception code" for such claims.
The OIG found CMS records for 135,805 Medicare beneficiaries who were incarcerated at some point between 2009 and 2011, and the audit was limited to 11,619 people. As the OIG wrote in its report, the exemption has proved difficult to interpret consistently, in the context of the complex patchwork of criminal justice systems across the country.
"One Medicare contractor stated that it denied claims with exception codes if the CMS databases were not updated in a timely fashion to indicate that the beneficiary was incarcerated." Commenting on that policy, one provider told OIG that it did not use an exception code, except "when resubmitting a claim that the contractor had previously denied."
"Conversely, two Medicare contractors stated that they pay claims with exception codes
regardless of the incarceration status that appears in the CMS databases. For that reason, one provider told us that it submitted claims with the exception codes when it knew through sources other than CMS that the requirements for the exception codes had been met."
Following the OIG's recommendation, CMS says it has initiated efforts to have contractors recoup the funds from providers -- but disagrees with OIG's assumption that its claim pre-approval process is insufficient.
In response to the audit, CMS said that all providers can make beneficiary eligibility determinations before filing claims, either through Medicare contractors or the HIPAA eligibility transaction system, although the provider will not be given a reason for ineligibility.
As the OIG's audit highlights inconsitencies with Medicare billing, immigration reform is starting to become a bipartisan issue. Some 11 million undocumented immigrants are thought to be living in the U.S., with about two-thirds of them estimated to be paying some form of Social Security, Medicare or income taxes, by way of fake ID cards or taxes automatically withheld by employers.