California Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries’ Deaths

The California Department of Health Care Services (California) pays managed care organizations (MCOs) to provide covered health care services in return for a monthly fixed payment for each enrolled beneficiary (capitation payments). The California Medicaid Program (Medi-Cal) is the largest Medicaid program in the Nation. Medi-Cal provides health coverage to almost one-third of California’s more than 39 million residents. Approximately 80 percent of Medi-Cal’s population is enrolled in managed care. Previous Office of Inspector General reviews found that State Medicaid agencies had improperly made capitation payments on behalf of deceased beneficiaries. We conducted this review of California, which administers Medi-Cal, to determine whether the issue we identified in other States also exists in California.