When fraud is perpetrated against the government, sometimes we wonder whether someone is asleep at the switch.  When governments lose money due to bad policy, no one fell asleep at the switch – there isn’t even a switch.  In those instances, action must be taken to correct the bad policy.

Consider the recent example reported by The Examiner.  Between January 1, 2008 and March 10, 2011, the state of Maryland spent as much as $7.5 million on Medicaid expenses for 532 individuals – and that’s after they were deceased.  Citing the results of a state audit report, the article notes one instance in which the state paid $147,000 to cover a resident’s Medicaid expenses, starting payments 11 months after that person died.  In this case, although the person died in October 2007, the state began paying a nursing home on his behalf in September 2008, and the payments continued until December 2010 “when the payments stopped without any explanation,” the report from the Office of Legislative Audits says.

The report states that most of the errors occur because the state doesn’t know the person receiving payments has died.  (T he Social Security Administration (SSA) Public Master Death File will usually show a deceased individual, but Maryland must start checking it BEFORE paying the bill.)  The state’s Department of Human Resources and Department of Health and Mental Hygiene does perform a check to determine whether the benefit recipient is still alive.  Unfortunately, they check a Maryland database, which doesn’t reach beyond state boundaries; therefore, it doesn’t track residents who die out of state.  (This is why there is a NATIONAL Public Master Death File published by the SSA.  )

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