The Nebraska State Office Building on Tuesday, Jan. 18, 2022, in Lincoln. (Rebecca S. Gratz for the Nebraska Examiner)
LINCOLN — The Nebraska State Auditor’s Office saw dead people in Nebraska’s Medicaid payments to managed care organizations as part of an audit, so it dug deeper and found 13.
The Auditor’s Office reviewed all regular monthly payments made in March to managed care groups by Nebraska’s Medicaid program under the Nebraska Department of Health and Human Services.
It identified 83 payments worth a combined $65,554 that were made on behalf of 13 Nebraska recipients of Medicaid after they had died, according to a letter from Auditor Mike Foley’s office.
The state systems that HHS oversees are supposed to flag the Medicaid program when HHS’ own Office of Vital Records notifies its eligibility system and its payment system of a person’s death so the payments stop.
In at least two and possibly three of the 13 people’s cases, Vital Records, which handles birth and death certificates, failed to flag the system automatically about the deaths.
One Medicaid recipient’s managed care organization received payments for more than two years after the patient’s death — 783 days, the state auditor’s letter says.
But in seven cases, the payments continued after the Medicaid payment system had been automatically flagged about their deaths. For five people, the state listed them as ineligible rather than dead. The other two had delayed processing.
The auditor’s deeper review of the payments followed its letter in late June to HHS raising questions about the program and its ability to verify proper payments and patient deaths.
“The procedures utilized by DHHS appear to have failed to check for deceased individuals against other systems or records used by the same agency,” the Auditor’s team wrote.
Foley’s office recommended that HHS button up its processes to more quickly stop payments after a Medicaid recipient’s death and that it work more quickly to seek and collect overpayments.
HHS, in a brief response included in the letter, acknowledged that its existing processes failed to properly stop some of the payments and pledged to review its internal controls.
“While DHHS has had processes in place that have largely been effective to identify, take eligibility action and recoup payments made after the date of death for Medicaid recipients, this review highlights opportunities to strengthen established controls,” the agency wrote.
SA25-08212025-August_21_2025_Payments_to_Managed_Care_Organizations_for_Deceased_Individuals_Letter
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