The investigation found that CMS has several safeguards to prevent this type of fraud, but claims still slipped through and were paid. For Parts A and B, the report said, "CMS implemented a process in April 2011 to prevent improper payments for services and items billed after beneficiaries' deaths. For Parts C and D, CMS automatically disenrolls an individual from a Medicare Advantage plan or prescription drug plan upon his or her death.
"These safeguards, however, did not prevent all improper payments."
In the agency's defense, the report said, that CMS actually paid $610 million to Medicare Advantage companies and prescription drug plan sponsors (Parts C and D) on behalf of deceased beneficiaries, and recovered all but 3% ($21 million.)
Of interest is that about $1 million in improper Medicare payments on behalf of deceased beneficiaries were made to 398 prescription drug plan sponsors, and 12 of them accounted for 70%. And, the report said, one sponsor collected $162,880 on behalf of 465 beneficiaries who had already died. Another sponsor received $140,505 for drugs reportedly provided to 758 beneficiaries whose death certificates listed earlier dates of demise.