WASHINGTON – A recent report from the Department of Health and Human Services’ independent watchdog has uncovered that Medicaid programs disbursed over $200 million in erroneous payments to healthcare providers between 2021 and 2022 for individuals who were deceased.

The Office of Inspector General within the department anticipates that a new provision in the Republicans’ One Big Beautiful Bill, which mandates states to audit their Medicaid beneficiary lists, could potentially curtail such improper payments in the future.

According to Aner Sanchez, the deputy regional inspector general in the Office of Audit Services, these incorrect payments are a widespread issue and not confined to a single state. Sanchez, who has been investigating this problem for a decade, emphasized its persistence in remarks to The Associated Press.

The watchdog’s report, released on Tuesday, highlighted that over $207.5 million in managed care payments were made on behalf of deceased enrollees from July 2021 to July 2022. The report recommends enhanced information sharing between the federal and state governments to reclaim these funds, specifically through accessing the Social Security database known as the Full Death Master File, which holds over 142 million records dating back to 1899.

However, access to the Full Death Master File has been heavily restricted due to privacy concerns, primarily to prevent identity theft and fraud.

In a significant development, the tax and spending bill signed into law by President Donald Trump this summer broadens the use of the Full Death Master File. Starting in 2027, Medicaid agencies are required to conduct quarterly audits of their provider and beneficiary lists against this file, aiming to halt payments made to deceased individuals and enhance the accuracy of the Medicaid system.

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.