WASHINGTON – An alarming revelation has emerged from the Department of Health and Human Services’ independent watchdog: Medicaid programs disbursed over $200 million in erroneous payments to healthcare providers from 2021 to 2022. The catch? These payments were made for individuals who were no longer alive.

The Office of Inspector General has suggested that a new mandate from the Republican-led “One Big Beautiful Bill” could potentially curb such fiscal missteps. This provision obligates states to audit their lists of Medicaid beneficiaries, aiming to mitigate future inaccuracies.

According to Aner Sanchez, the deputy regional inspector general in the Office of Audit Services, these improper payments are not isolated to a single state but are a widespread issue that persists across the nation. Sanchez, who has spent a decade delving into this challenge, shared insights with The Associated Press, highlighting the ongoing nature of the problem.

In a report published Tuesday, it was disclosed that over $207.5 million in managed care payments were mistakenly distributed on behalf of deceased enrollees during the period from July 2021 to July 2022. To address this issue, the watchdog recommends that the federal government enhance collaboration with state governments to recoup these funds. This could involve sharing data from the Social Security Administration’s Full Death Master File, a comprehensive database containing over 142 million records dating back to 1899.

However, sharing the Full Death Master File has been fraught with privacy concerns, as laws designed to prevent identity theft and fraud have tightly restricted access to this sensitive information.

The massive tax and spending bill that was signed into law by President Donald Trump this summer expands how the Full Death Master File can be used by mandating Medicaid agencies to quarterly audit their provider and beneficiary lists against the file, beginning in 2027. The intent is to stop payments to dead people and improve accuracy.

Tuesday’s report is the first nationwide look at improper Medicaid payments. Since 2016, HHS’ inspector general has conducted 18 audits on a selection of state programs and had identified that Medicaid agencies had improperly made managed care payments on behalf of deceased enrollees totaling approximately $289 million.

The government had some success using the Full Death Master File to prevent improper payments earlier this year. In January, the Treasury Department reported that it had clawed back more than $31 million in federal payments that improperly went to dead people as part of a five-month pilot program after Congress gave Treasury temporary access to the file for three years as part of the 2021 appropriations bill.

Meanwhile, the SSA has been making unusual updates to the file itself, adding and removing records, and complicating its use. For instance, the Trump administration in April moved to classify thousands of living immigrants as dead and cancel their Social Security numbers to crack down on immigrants who had been temporarily allowed to live in the U.S. under programs started during the Biden administration.