WV Medicaid Paid $31.7M in Fees for Incarcerated Enrollees
Summary
A West Virginia legislative audit found the state's three Medicaid managed-care plans kept collecting monthly per-person fees for 94,214 enrollee-cases tied to people who were incarcerated and 15,346 cases tied to people who were already dead, from fiscal 2019 through fiscal 2022 -- about $32.4 million combined, net of the state's own corrections. West Virginia's own cleanup work has recovered roughly $2.37 million of it so far.
A fee paid whether or not the person can use it
BMS runs West Virginia Medicaid's managed-care arm, Mountain Health Trust, which covers about 87% of the state's Medicaid population through three contracted insurers -- Aetna, The Health Plan, and Unicare. Each plan draws a fixed capitation payment⧉ for every enrollee on its rolls each month, regardless of whether that person used any care at all that month. The federal Medicaid Inmate Exclusion Policy bars federal funds from covering incarcerated people except for inpatient hospital stays of 24 hours or longer -- BMS is supposed to manually suspend coverage the moment someone is jailed or dies, which is exactly the step auditors found breaking down at scale.
View data as table
| Aetna | 10,873,464.1 | 32,063 individuals |
|---|---|---|
| The Health Plan | 9,808,051.6 | 29,134 individuals |
| Unicare | 10,987,042.4 | 33,017 individuals |
Four data sets before the count could be trusted
The audit itself took two years, from December 2022 to November 2024, because BMS's own data kept failing quality checks⧉. The first two capitation-payment extracts the agency handed over relied on what its own staff later called a flawed query that pulled cases from outside the FY2019-2022 audit window; auditors had to request a third, then a fourth data set before either side would call the numbers reliable. West Virginia opened this audit specifically because Louisiana's legislative auditor had found the identical problem -- the same insurer, Aetna, being paid for incarcerated and dead enrollees -- in its own Medicaid program.
View data as table
| Aetna | 241,276.5 | 7,811 individuals |
|---|---|---|
| The Health Plan | 231,416.6 | 3,565 individuals |
| Unicare | 297,322.6 | 3,970 individuals |
What's actually been recovered
BMS did not sit still while the audit ran. In June 2022, the agency's Office of Program Integrity clawed back $1,788,996.32⧉ in payments made for 425 members beyond their date of death; a second cleanup pass recovered another $583,943.92 across 213 individuals -- about $2.37 million combined. BMS also told auditors it now pulls updated parole lists from the Division of Corrections monthly and runs a quarterly report on any claims paid after a member's recorded date of death. The audit doesn't specify whether that $2.37 million already sits inside the $32.4 million 'uncorrected' figure or predates it; both numbers are BMS's own, reported separately.
- $32.4 million in Medicaid capitation payments went to West Virginia's three managed-care plans for enrollees who were incarcerated or dead, FY2019-2022 -- $31.7 million of it tied to 94,214 incarcerated-enrollee cases, $770,000 to 15,346 deceased-enrollee cases, both net of the state's own corrections at the time of the final data pull.
- The audit exists because Louisiana found the same problem first, in the same insurer (Aetna); West Virginia's own data took four attempts and two years to become reliable enough to analyze, a delay the report attributes to flawed agency queries rather than auditor error.
- BMS has recovered about $2.37 million on its own through two internal cleanup projects and says it now checks incarceration and death records more often -- but the Legislative Auditor stopped short of quantifying how much of the $32.4 million remains outstanding today, calling its own total 'a snapshot in time' rather than a current balance.
All figures in this piece come from the West Virginia Legislature's Post Audit Division report on BMS capitation payments for ineligible incarcerated or deceased individuals, presented October 7, 2025. The report itself repeatedly cautions that its $32.4 million total is 'a snapshot in time' likely already reduced by BMS's ongoing data cleanup, and that the identified individuals per MCO 'may not represent unique individuals' since some people moved between plans across the four-year window -- this piece uses the word 'potential' or 'cases' throughout for that reason, not 'confirmed fraud' or 'unique people.' The Legislative Auditor deliberately stopped short of further quantification, judging that continued audit testing would duplicate BMS's own corrective work; a follow-up audit, if the Post Audits Subcommittee orders one, would need to happen after BMS finishes its procedural changes to produce a more current figure. This piece covers the report's single audit issue in full; it does not cover Appendix C, BMS's scanned written response letter, which was not machine-readable text in the published PDF.
Sources(1) ▾
- West Virginia Legislature, Office of the Legislative Auditor, Post Audit Division (Justin Robinson, Legislative Auditor/Director), WV Bureau for Medical Services -- Capitation Payments for Ineligible Incarcerated or Deceased Individuals (2025-10-07) — The Legislative Auditor's statutorily authorized (W. Va. Code Ch. 4, Art. 2, Sec. 5) performance audit of the Bureau for Medical Services' (BMS) capitation payments to its three Medicaid managed-care organizations for individuals who were incarcerated or deceased, FY2019-2022 -- the sole evidentiary basis for this piece's figures. Source for the Report Brief's headline totals (p. 1), the Executive Summary's restatement of those totals (p. 2), the Mountain Health Trust program background (p. 3), the federal Medicaid Inmate Exclusion Policy criteria and BMS's two internal recovery projects (p. 6), Table 1's per-MCO incarcerated-overpayment breakdown (p. 7), Table 2's per-MCO deceased-overpayment breakdown (p. 9), and the report's own 'snapshot in time' caveat and decision to end further audit testing (pp. 9-10). wvlegislature.gov · original document
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West Virginia's three Medicaid managed-care organizations kept receiving fixed monthly fees for enrollees who were incarcerated or already dead, according to a performance audit by the West Virginia Legislature's Post Audit Division⧉, presented October 7, 2025. Comparing four years of capitation-payment data against state prison and vital-statistics records, auditors found $31.7 million in payments tied to 94,214 incarcerated-enrollee cases and $770,000 tied to 15,346 deceased-enrollee cases -- about $32.4 million combined, net of the corrections the Bureau for Medical Services (BMS) had already made by the time the final data set was pulled.