Federal Reports

A medical loss ratio (MLR) is the percentage of premium dollars an insurer spends to provide medical services and healthcare quality improvement activities for its members compared to the premium dollars it uses to pay for administrative expenses. This report is part of a series of Office of Inspector General reviews conducted to determine whether the Medicaid program could achieve savings if States required Medicaid managed care organizations (MCOs) to meet a minimum MLR standard and pay remittances if the MLR standard was not met.

Florida's Agency for Health Care Administration (State agency) did not always stop making capitation payments after a beneficiary's death, despite its efforts to identify and recover any overpayments. Of the 124 capitation payments in our random sample selected from payments to beneficiaries whose dates of death (DODs) preceded the payment date, the State agency recovered 10 payments prior to the start of our audit and 1 was not recoverable. For the remaining 113 capitation payments, the State agency made overpayments totaling $192,000 ($112,000 Federal share). During the course of our audit, the State agency adjusted 34 of the 113 payments totaling $64,948. On the basis of our sample results, we estimated that the State agency made overpayments to managed care organizations (MCOs) totaling $26.2 million ($15.4 million Federal share) during our audit period. These overpayments amount to approximately 2 percent of the $1.3 billion that the State agency paid to MCOs from July 1, 2009, through November 5, 2014, on behalf of deceased Medicaid beneficiaries.

During this period, we completed 35 investigations involving fraud or corruption related to the Department’s programs and operations, securing more than $27 million in settlements, fines, recoveries, forfeitures, and savings. In addition, as a result of our investigative work, criminal actions were taken against a number of people, including school officials and service providers who cheated the students they were in positions to serve. We also issued 11 audit and other reports that contained recommendations to improve program operations.