Faulty government recordkeeping caused Louisiana’s Medicaid program to wrongly pay out nearly $2 million in health coverage for 1,700 deceased residents.

The mistakes took place over a year and a half (February 2012 to June 2013), during which the Department of Health and Hospitals paid $1.9 million to several insurance companies participating in the state’s Medicaid programs called Louisiana Behavioral Health Partnership and Bayou Health, according to a report (pdf) by the Louisiana Legislative Auditor.

Kathy Kliebert, secretary of the Department of Health and Hospitals, said the faulty payments were not a product of fraud. Rather, the agency relied on outdated information contained in the Social Security Administration database to determine if a Medicaid participant was still living.

“We had not realized that the system was as backlogged and inaccurate as it was,” Kliebert told the New Orleans Times-Picayune. “It’s not the result of bad management. It’s the result of bad data system.”

Four insurers received the bulk of the erroneous payments: LaCare (now AmeriHealth Caritas Louisiana) ($599,000), Louisiana Healthcare Connections, Inc. ($527,000), Amerigroup Louisiana, Inc. ($441,000), and Magellan Health Services ($258,000).

The auditor and a top legislative leader suggested the Department of Health and Hospitals recoup the money from the insurance companies.

“They need to go back and use the full force of the law to recover those funds that belong to the taxpayers,” Republican state Senate President John Alario told the newspaper.

Louisiana's Medicaid director, Ruth Kennedy, downplayed the controversy, characterizing the funds paid for the care of deceased people as “overpayment,” and pointing out that it amounted to a fraction of Medicaid payments made during that period.

-Noel Brinkerhoff

To Learn More:

Louisiana Medicaid Paid Companies to Care for People Already Dead (by Julia O'Donoghue, New Orleans Times-Picayune)

Medicaid Participant Fees Paid for Deceased Individuals in the Louisiana Behavioral Health Partnership and Bayou Health Programs, Department of Health and Hospitals (Louisiana Legislative Auditor) (pdf)

USDA Paid $36 Million in Aid Money to Dead Farmers for Four Years (by Noel Brinkerhoff, AllGov)

Social Security Has Paid Millions of Dollars to 1,760 Dead People Since 2008 (by Noel Brinkerhoff and David Wallechinsky, AllGov)

Obama Orders Agencies to Stop Paying Dead People (by Noel Brinkerhoff, AllGov)