Social Security Data Errors and the Living Dead

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social-security-coupleA few months ago, when Dr. Thomas Lee logged in to his patients’ electronic medical records to renew a prescription, something unexpected happened. It was a notice that one of his patients had died.

Lee, a primary doctor at Brigham and Women’s Hospital in Boston, was scheduled to see the patient in three days.

“I was horrified,” he says. The patient had been in his 80’s, and his wife had died a few months before. “And everyone in medicine knows that when someone dies, there’s an increase in risk of death for their spouse over the next six months.”

He wanted to know what had happened, but he couldn’t find anything in the medical records or in a Web search. “I just felt really guilty that I had not pushed harder to get him in sooner,” says Lee. When he couldn’t find out anything, he decided to phone the man’s house to offer condolences — maybe even to apologize.

“So I called, and to my shock he answered,” says Lee. It was the patient, a retired professor living in Boston.

“I assume you’re calling about my death,” the man said.

“It gave me goose bumps,” says Lee. “I said, yes, I guess I am.  And then he explained to me what had happened.”

The professor explained that he had been dealing with his own death for the past two weeks. It all started when he went to the ATM, only to find that he no longer had access to his bank account. When he went to the pharmacy to pick up his medicine, he found he no longer had health insurance.

Soon after, he got a letter in the mail from the Social Security Administration offering condolences about his recent loss of life and informing him that his monthly payments would end and that payments made since his “death” a few months prior would be removed from his bank account.

Because of a clerical error, the Social Security Administration believed he had died in December 2015. That information had quickly spread to banks, pharmacies, and hospitals. His doctor appointments had been wiped out and other patients had taken his place. Essentially, he had been locked out of his life.

“It was a major nuisance, let’s put it that way,” he says. And to add insult to death, says the professor, “Social Security actually gave my date of death as the same date as my wife’s, which was really creepy. Not pleasant to see.”

He spent weeks on the phone trying to correct it all. In the process, the man learned that because he had supposedly died, all his information — his full name, Social Security number, birthday and supposed death date — had been released to the public in a document called the Death Master File.

The publication of the file is a measure taken to prevent fraud, such as someone taking out a credit card in a deceased person’s name. But for those who are still living, the file is a recipe for identity theft and why this article is not naming the man. 

“I’m keeping an eye out fairly carefully to see if anything goes awry,” he says. “But it’s also somewhat amusing to know that you really are alive when everybody thinks you’re dead.” He even got a hug from a surprised doctor who didn’t expect him to show up for his canceled appointment, let alone in relatively good health.

It took about two months to resurrect him in the federal system.

And as Lee wrote [August 2016] in the New England Journal of Medicine, what happened to the professor happens to thousands of people each year.

“When we called the information system people to bring him back to life, the response that we got was, ‘Oh no! Not another one,’  said Lee. There’s even a frequently asked question about it on the Social Security Administration’s website.

“And this is where I made the transition from thinking about this as something amusing to something very important,” said Lee. “We have a society where information travels quickly and there are many great things about it, but what if that information is wrong? There just is no process in most information systems for saying ‘Oops, we were wrong.’ “

In 2011, an audit found that about 1,000 people a month in the U.S. were marked deceased when they were very much alive. Rona Lawson, who works in the Office of the Inspector General at the Social Security Administration, says that number has gone down. It’s now around 500 people a month.

“But for those 500 people, it’s still a big impact on their lives, so we’d like to see the number even lower,” she says. Because most of the people are Social Security clients, she says, they tend to be retired and over the age of 60.

Lawson says 90 percent of the time, the cascade of misinformation starts with an input error by Social Security staff — a regular mistake on a regular office day that just happens to record a person as deceased, at least on paper.

And she says the professor’s case, where someone is given the death date of their spouse, is fairly common.

In 2011, Congress passed legislation to remove a few pieces of information from the Death Master File – the state, county and ZIP code where a person lives or lived. And in 2013, based on recommendations by Lawson and her colleagues, Congress passed another piece of legislation to keep a person’s information from becoming public until 3 years after their death date. The change will be effective in late November 2016.

“So, that’s an improvement — more time to get it right before it gets into the public domain and starts spreading to all the different websites and so forth,” says Lawson.

She says the information would still go to authorized users like banks and credit reporting agencies, so while the change might keep back identity thieves, it wouldn’t do much to prevent the headache that the retired professor went through.

“At least we can keep the information restricted to those who have a right to know it and not just everybody that has an Internet access,” says Lawson.

But wait a minute. Putting aside the headache of having to convince everyone you’re still alive just so you can withdraw cash from an ATM, or pick up your prescriptions, might a fake death be seen as an opportunity? Maybe to disappear to a tropical island and start a new life?

“I never thought of that,” says the professor. “But that might have been an interesting way to proceed.”

New Medicare Law for a Patient Loophole

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Long-Term CareLast November, after a bad fall, 85-year old Elizabeth Cannon was taken to a hospital near Philadelphia for seven days of observation, followed by nearly five months in a nursing home for rehabilitation and skilled nursing care. The cost: more than $40,000.  

The hospital insisted that Elizabeth had never been formally admitted there as an inpatient, so under federal rules, Medicare would not pay for her nursing home stay. The money would have to come from her pocket.

The experience of Elizabeth and thousands like her inspired a new Medicare law — in force as of Saturday, August 6, 2016 — that requires hospitals to notify patients they may incur huge out-of-pocket costs if they stay more than 24 hours in the hospital without being formally admitted. Because of the Notice Act, passed by Congress last year [2015] with broad bipartisan support, patients can expect to start receiving the notice in January [2017].

“It was extremely distressful to my mother, who was frugal her whole life,” said Cynthia Morgan, Elizabeth’s daughter. Elizabeth had questioned why Medicare would not pay for her care after she paid into Medicare for so many years. Elizabeth died in April 2016.

Hospitals have been keeping patients like Elizabeth in limbo due to fear of being penalized by Medicare for inappropriate admissions. While under observation, patients can be liable for substantial hospital bills, and Medicare will not pay for subsequent nursing home care unless a person has spent three consecutive days in the hospital as an inpatient.

Time spent under observation does not count toward the three days, even though the patient may spend five or six nights in a hospital bed and receive extensive hospital services, including tests, treatment and medications ordered by a doctor.

Under the new law, the notice must be provided to “each individual who receives observation services as an outpatient” at a hospital for more than 24 hours. Medicare officials estimate that hospitals will have to issue 1.4 million notices a year.

“The financial consequences of observation stays can be devastating for seniors,” said Senator Susan Collins, Republican of Maine and the chairwoman of the Senate Special Committee on Aging.

Senator Benjamin Cardin, Democrat of Maryland, the chief sponsor of the Senate version of the legislation, said it would “save seniors from the sticker shock that comes after they are discharged from the hospital and realize that Medicare will not cover the cost of care in a skilled nursing facility.”

The median cost for a private room in a nursing home is roughly $92,000 a year, according to a survey by Genworth Financial. Medicare covers up to 100 days of skilled nursing home care at a time.

The text of the standard “Medicare outpatient observation notice” is subject to approval by the White House Office of Management and Budget. In its current form, the notice to beneficiaries says: “You are a hospital outpatient receiving observation services. You are not an inpatient.” And it explains that Medicare will cover care in a skilled nursing home only if the beneficiary has had an inpatient hospital stay of at least three days.

Patients can then consult their doctors and may ask to be reclassified as inpatients.

Hospitals have found themselves in a dilemma. They increased their use of “observation status” in response to close scrutiny of their billing practices by Medicare auditors — private companies hired by the government to review claims. In many cases, these companies challenged decisions by doctors to admit patients to a hospital, saying the services should have been provided on an outpatient basis. The auditors then tried to recover what they described as improper payments.

Doctors and hospitals said the auditors were like bounty hunters because they were allowed to keep a percentage of the funds they recovered.

But patients will now, at least, be better informed. The Senate Finance Committee explained the reason for the law this way:

“The number of Medicare beneficiaries receiving outpatient observation care over the last several years has been steadily increasing. Some beneficiaries are surprised to learn that although having received treatment overnight in a hospital bed, the beneficiary was never formally admitted as an inpatient but was instead a hospital outpatient.”

Federal officials acknowledged that Medicare beneficiaries sometimes had to pay more as outpatients under observation than they would have paid if they had been formally admitted to the hospital and received the same services as inpatients.

The administration issued rules to carry out the new law. The purpose, it said, is “to inform beneficiaries of costs they might not otherwise be aware.”

“Even if staying in a hospital overnight, the status might still be considered outpatient,” the administration said in a publication for beneficiaries.

Consumer advocates and nursing homes support the new requirement.

“Medicare beneficiaries are spending more and more time in the hospital without being formally admitted,” said Joyce Rogers, a senior vice president of AARP, the lobby for older Americans, adding that this “can expose beneficiaries to unexpectedly high out-of-pocket costs amounting to thousands of dollars.”

Mark Parkinson, the president and chief executive of the American Health Care Association, a trade group for nursing homes, said, “Patients often have no idea what their status is in a hospital and observation stays impose a significant financial burden on seniors increasing the likelihood of turning to Medicaid.”  

“The new law is an important first step, but Congress and the administration need to do more to protect beneficiaries,” said Judith Stein, the executive director of the nonprofit Center for Medicare Advocacy.

Under the law, hospitals can still keep Medicare patients in observation status, and some of the patients will be responsible for nursing home costs. Twenty-four senators and more than 120 House members are supporting bipartisan legislation to address that concern. Under that bill, time in a hospital under observation would count toward the three-day inpatient stay required for Medicare coverage of nursing home care.

Automatically Enrolled? Some Seniors Surprised

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Couple worried at computerOnly days after Judy Moore came home from the hospital after surgery last year, her doctor’s office called with distressing news. Her records showed that instead of original Medicare, Judy had a private Medicare Advantage plan. Her doctor and hospital were not in the plan’s network.

Neither the plan nor Medicare would now cover her medical costs. She owed $16,622.

“I was panicking,” said Judy [who lived in Carlsbad, New Mexico at the time]. After more than five hours of making phone calls, she learned that because she previously had individual coverage through Blue Cross Blue Shield when she became eligible for Medicare, Blue Cross Blue Shield automatically enrolled her into its own Medicare Advantage plan after notifying her in a letter. Judy said she ignored all mail from insurers because she had chosen traditional Medicare.

“I felt like I had insured myself properly with Medicare,” she said. “So I quit paying attention to the mail.”

With Medicare’s specific approval, a health insurance company can enroll a member of its marketplace or other commercial plan into its Medicare Advantage coverage when that individual becomes eligible for Medicare. Called “seamless conversion,” the process requires the insurer to send a letter explaining the new coverage, which takes effect unless the member opts out within 60 days.

Medicare officials have refused to name the companies that have sought or received such approval or even to say how long the Centers for Medicare & Medicaid Services has allowed the practice. Numerous insurers, including Cigna, Anthem and other Blue Cross Blue Shield subsidiaries, also declined to discuss whether they are automatically enrolling beneficiaries when they turn 65.

And other insurers say they are moving ahead.

Aetna will begin the process soon for its marketplace members in 17 Florida counties. The effort will kick off with individuals who qualify for Medicare in November 2016, spokesman Matthew Clyburn said. Beneficiaries turning 65 will receive a 90-day advance notice instead of the required 60 days and a postcard they can mail back to Aetna. Then, the company will follow up by phone to make sure they understand the change.

In November 2016, United Healthcare will begin to automatically enroll members of its Medicaid plans in Tennessee and Arizona into its Medicare Advantage plans.

Humana, the nation’s second largest Medicare Advantage provider, has asked for federal permission to also do auto-enrollment. 

Medicare officials are developing a procedure for reviewing seamless conversion requests as well as a system to monitor implementation. A company given approval must automatically enroll all Medicare-eligible beneficiaries. But because federal law prohibits marketplace insurers from dropping a member who qualifies for Medicare, both marketplace and Medicare Advantage coverage continue until the person cancels the marketplace plan.

Sally Thompsen, who lives outside Chicago and had an individual health policy from Blue Cross Blue Shield last year, was more than surprised when she received her member card for a Medicare Advantage plan shortly before turning 65. Printed on the card was the name of her new primary care physician, someone she did not know.

“I almost hit the ceiling,” said Sally, who had already enrolled in traditional Medicare.

She demanded that Blue Cross cancel her Medicare Advantage enrollment and reported the situation to Erin Weir, health care access manager at the local advocacy group AgeOptions. Erin heard a similar story from another local woman, who had received a letter from her insurer saying a Medicare Advantage plan was “selected for you because it is similar to your current plan and unless you contact us, you will be automatically enrolled.”

After learning about the problem both from constituents and health care advocates, Rep. Jan Schakowsky (D-Ill.) wants stronger consumer protections. “I am exploring the option of requiring an ‘opt-in’ so that Medicare beneficiaries are adequately informed and able to make the choices that work best for them,” said Schakowsky, whose district includes the Chicago area.

The Lovelace Medicare Advantage plan, in which Judy Moore found herself enrolled, is run by Health Care Service Corporation, which administers Blue Cross Blue Shield plans covering 15 million beneficiaries in Illinois, Montana, New Mexico, Oklahoma and Texas. A Health Care Service spokeswoman said it “offers seamless conversion enrollment on a limited basis.” She would not provide details.

Judy Moore finally solved her dilemma with help from a Medicare counselor at New Mexico’s Aging and Disability Resource Center, who contacted David Lipschutz, a senior attorney at the Center for Medicare Advocacy in Washington. He advised the counselor to tell Medicare officials that the retiree was enrolled in Medicare Advantage without her knowledge even though enrollment must be voluntary.

Eventually, officials disenrolled Judy from her unwanted plan, restored her traditional Medicare coverage and agreed to cover her medical bills.

Lipschutz said giving beneficiaries the chance to opt out does not adequately safeguard consumers. An insurer’s notification letter can easily be mistaken or overlooked in the deluge of marketing materials seniors receive when turning 65.

“The right to opt out does not exist if a Medicare beneficiary does not receive a notice or if they do receive a notice but do not understand the contents,” he said.