State Auditor Identified Over $65,000 in Potentially Improper DHHS Payments to Deceased

By Gordon Hopkins The Nebraska State Auditor’s Office has identified potentially over $65,000 in improper payments by the Nebraska Department of Health and Human Services (DHHS) to Managed Care Organizations (MCOs) on behalf of deceased individuals. On Thursday, August 21, Deputy Auditor Craig Kubicek, CPA, CFE, sent a letter to DHHS CEO Dr. Steve Corsi, advising him, “As you know, the Nebraska Auditor of Public Accounts (APA) recently conducted a detailed analysis of State employees and vendors within the State’s accounting system, EnterpriseOne, to identify not only potentially fictious (sic) employees or payments but also internal control deficiencies. Furthermore, the APA compared the employees and vendors paid to the death records maintained by the Office of Vital Records of the Nebraska Department of Health and Human Services (DHHS) to identify potentially improper payments to deceased individuals.” The auditor’s office has made no accusations of fraud. Instead, the cause has been identified as inadequate internal controls. Kubicek wrote in his letter, “DHHS provides various benefits for individuals, and those benefits are sometimes paid to providers or other organizations, such as Managed Care Organizations (MCOs), rather than directly to the individual. Because the State’s accounting system reflects such payments as being made to the provider or organization, there is a risk of those entities receiving improper benefit payments on behalf of an ineligible or deceased individual – an error that may not be discovered through DHHS’s current procedures.” How the Payments Were DiscoveredAPA obtained a listing of all Medicaid capitation payments, with the corresponding Medicaid recipient details, made to MCOs in March of 2025. Medicaid capitation payments are fixed disbursements made, usually monthly, to MCOs to cover healthcare services for Medicaid-eligible recipients. APA then compared the claims paid in March of 2025 to the Vital Statistics records, including death information, maintained by the Office of Vital Records, to determine whether any MCOs were receiving capitation payments for deceased individuals.APA identified four MCOs that received payments for deceased individuals: Nebraska Total Care, Molina Health Care of Nebraska, United Healthcare of the Midlands and MCNA Insurance Company. According to the letter, “Nebraska Total Care and MCNA Insurance Company received payments for services provided to the same deceased recipient.” How the Error OccurredDHHS utilizes the Nebraska Family Online Client User System (NFOCUS) with an interface to the Vital Statistics records that automatically sends a notice to an active recipient’s program case when the individual passes away. DHHS sends regular enrollment files with active members to MCOs. Once a member’s status is ineligible for any reason and that status is changed in NFOCUS, DHHS discontinues paying the capitation payments. However, the APA noted several MCOs that received payments for deceased Medicaid recipients after their dates of death.APA has made recommendations for corrective action to reduce the chances of something like this from happening again. DHHS responded to the investigation, “The Nebraska Department of Health and Human Services (DHHS) appreciates the Auditor of Public Accounts’ work to identify areas of opportunity for DHHS to strengthen internal controls and the integrity of the Nebraska Medicaid program.”DHHS has recouped or is in the process of recouping some of these payments.

Fairbury's "Fix It" Page Taken Down

Jefferson, Gage, Other Southeast Nebraska Counties Included in Governor’s Disaster Declaration

Related Articles

High Winds Fuel Multiple Wild Fires in SE Nebraska

Sen. Ricketts Makes the Case for War

City Offices Closed During Move

A Broken Wire Over Railroad Tracks Leaves City in the Dark