By Joe Biesk
The Associated Press

FRANKFORT - The state's Medicaid program has paid out $1.8 million in benefits since 1996 for people who were dead, according to an audit released Thursday.

Last fiscal year alone, the study found, the state paid $363,243 for participants who were dead. That figure included 7,601 payments to 361 providers, according to the audit.

Passport Health Plan received the largest portion of that money, $285,150, for 364 former recipients who were deceased. The 360 other providers in the state received an average of $216.93 each for deceased patients.

"The sort of attention to detail that is lacking in the services that our audit studied can make the difference between whether Medicaid does what we want it to or not," State Auditor Ed Hatchett said.

Auditors reviewed more than 30 million transactions, totaling more than $3 billion, in Medicaid payments for the fiscal year 2002 - from July 2001 to June 2002. A separate audit, conducted by the Department for Medicaid Services, found the department paid out $1.5 million between 1996 and 2001 for Medicaid recipients after they died.

According to the audit, Medicaid officials corrected 349 of the 364 cases during fiscal year 2002. Still, there were 15 cases not yet corrected.

The state intends to review the payments made for the deceased Medicaid recipients and collect the money from HMOs and other health care providers.

Auditors found two instances where the department paid Passport, which opened in 1997, for people who had died years before the company was even created. One of the Medicaid recipients died in 1993, and the other in 1995, for a combined total of $13,086.

Passport spokeswoman Jill Bell said the company relies on state Medicaid officials to provide them with information about eligible Medicaid recipients.