Medicaid paid more than $200 million to dead people, and Trump is rewriting privacy laws to fix it

But the department’s Office of Inspector General said it expects that a new provision in one big, beautiful Republican bill requiring states to review their lists of Medicaid beneficiaries may help reduce these improper payments in the future.

These types of improper payments “are not limited to one country, and the problem continues,” Anier Sanchez, regional assistant inspector general for the Office of Audit Services, told The Associated Press. Sanchez has been researching this issue for a decade.

The watchdog report released Tuesday said more than $207.5 million in managed care payments were made on behalf of deceased enrollees between July 2021 and July 2022. The office recommends the federal government share more information with state governments to recover incorrect payments — including a Social Security database known as the Complete Death Master File, which contains more than 142 million records dating back to 1899.

Sharing of full death master file data has been strictly restricted due to privacy laws that protect against identity theft and fraud.

The massive tax and spending bill, which President Donald Trump signed into law this summer, expands how the complete death master file is used by mandating that Medicaid agencies conduct a quarterly audit of lists of providers and beneficiaries against the file, starting in 2027. The intent is to stop payments to the dead and improve accuracy.

Tuesday’s report is the first national look at inappropriate Medicaid payments. Since 2016, the Department of Health and Human Services’ Inspector General has conducted 18 audits of select state programs and determined that Medicaid agencies 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 recovered more than $31 million in federal payments that improperly went to dead people as part of a five-month pilot program after congress granted the Treasury Department temporary access to the file for three years as part of the 2021 appropriations bill.

At the same time, the Social Security Administration (SSA) was making unusual updates to the file itself, adding and removing records, and complicating its use. For example, the Trump administration moved in April to classify thousands of living immigrants as dead and revoke their Social Security numbers to crack down on immigrants who had been temporarily allowed to live in the United States under programs begun during the Biden administration.