LIVE Beneficiaries Act

Bill Summary

S. 678, the LIVE Beneficiaries Act, is a narrowly focused Medicaid program-integrity bill that would require every state (and the District of Columbia) to perform a quarterly data match against the federal Death Master File (DMF) to identify and promptly remove deceased individuals from Medicaid enrollment and to stop any further payments made on their behalf. The bill amends Title XIX of the Social Security Act (42 U.S.C. 1396a) by adding a new state-plan requirement—applicable only to the 50 states and DC—that becomes effective January 1, 2027. It standardizes, across states, the minimum frequency and evidentiary basis for disenrolling beneficiaries who have died, while preserving states’ ability to use additional electronic data sources that may detect deaths sooner.

Mechanically, the bill does three main things. First, it imposes a quarterly screening obligation: at least once every three months, states must review the DMF—an SSA-maintained database of reported deaths—to determine whether any current Medicaid enrollees are listed as deceased. Second, if a match indicates an enrollee has died, the state must treat that DMF information as sufficient “factual information” under an existing Medicaid regulation (42 C.F.R. 431.213(a)). That regulation allows state Medicaid agencies to take adverse action without advance notice when the agency has factual information confirming the beneficiary’s death. In practice, this means states would be explicitly authorized to terminate eligibility based on the DMF match without the typical prior-notice period, and must then disenroll the individual and cease payments under Title XIX for dates of service after the person’s death (payments for services furnished before death remain allowable). Third, the bill includes a corrective safeguard: if the state later determines the enrollee was misidentified as deceased—an acknowledged possibility given occasional DMF inaccuracies—the state must immediately reinstate the individual’s coverage retroactive to the date of disenrollment, thereby preventing coverage gaps for any services obtained in the interim.

The bill’s scope is intentionally limited. It does not alter who qualifies for Medicaid, change income thresholds, or redesign eligibility redetermination cycles more broadly. Instead, it targets a discrete subset of improper payments: capitation or fee-for-service payments made after a beneficiary’s death. The “rule of construction” clause allows states to continue, or adopt, complementary tools—such as vital statistics interfaces, commercial death data vendors, or Social Security Numident checks—to identify deaths faster or confirm ambiguous cases, as long as states still perform the DMF match at least quarterly and comply with all other Title XIX eligibility rules.

Several implementation details are implicit. States will need to ensure their Medicaid eligibility and enrollment systems can regularly ingest and match DMF records to their beneficiary files with adequate identity-resolution logic (e.g., SSN, name, date of birth), flag matches for action, generate required notices to estates or representatives where applicable, and coordinate with claims/payment systems to prevent post-death payments. Because the bill treats DMF data as dispositive for disenrollment, it could accelerate termination workflows compared to states that currently require additional verification. The 2027 start date provides time for system upgrades, contracting for DMF access if not already in place, and developing error-resolution protocols to handle false positives quickly. Notably, the provision expressly applies to the 50 states and DC and excludes U.S. territories, which could perpetuate uneven integrity standards across Medicaid programs.

Policy-wise, the measure responds to longstanding concerns about improper payments in Medicaid, where federal watchdogs have periodically identified payments made after death as a subset of waste, even if a relatively small slice compared with documentation or eligibility-determination errors. By creating a clear federal floor—quarterly DMF checks and immediate termination based on those results—Congress would be signaling a preference for uniformity and speed in removing deceased individuals from the rolls, potentially yielding budgetary savings at both federal and state levels. At the same time, because the bill anchors disenrollment to a single data source, it elevates the importance of DMF data quality and of robust reinstatement mechanisms when misidentifications occur. The explicit retroactive reinstatement requirement is intended to mitigate harm from erroneous terminations, but it does not address ancillary issues like provider billing complications or beneficiary confusion in the interim.

The bill contains no new funding or grants to offset state administrative or IT costs; nor does it prescribe detailed due-process steps beyond referencing the existing no-advance-notice regulation for death cases. Supporters will view the legislation as a common-sense, low-cost way to curb preventable improper payments and ensure Medicaid dollars support living beneficiaries. Critics may focus on the risk of wrongful disenrollment without prior notice, the administrative burden on states without dedicated funding, and the exclusion of territories. Overall, S. 678 is a targeted program-integrity measure that seeks to standardize and speed up Medicaid’s removal of deceased enrollees, with a built-in error-correction backstop but few other procedural guardrails.

Pros

Targets a narrow, widely acknowledged source of improper payments—post-death payments—without altering broader Medicaid eligibility or benefits.
Codifies a uniform, minimum standard across states, which can help even out disparities in program integrity practices and reduce federal improper payment rates.
Includes an explicit retroactive reinstatement requirement to correct erroneous disenrollments, limiting harm to individuals misidentified as deceased.
Allows states to use additional electronic data sources beyond the DMF, potentially improving accuracy and timeliness.
Begins in 2027, giving states time to upgrade systems, build error-resolution protocols, and train staff to reduce adverse impacts.
May free up resources that can be redirected to services for living beneficiaries, supporting fiscal stewardship without cutting coverage categories.
Aligns with existing Medicaid regulations for handling death cases, offering legal clarity rather than creating a wholly new process.
Could reduce capitation overpayments to managed care plans after a member’s death, which is a concrete integrity improvement Democrats often support.

Advances Medicaid program integrity by preventing payments to or on behalf of deceased individuals—a straightforward misuse of taxpayer funds.
Establishes a clear, uniform quarterly DMF match standard, reducing variation among states and closing known loopholes.
Provides legal clarity that DMF data counts as factual confirmation of death, enabling faster disenrollment and quicker cessation of improper payments.
Includes a remedy for false positives—immediate, retroactive reinstatement—balancing integrity with fairness.
Respects state flexibility to use other data sources to improve timeliness and accuracy while maintaining a federal baseline.
Likely produces budgetary savings with minimal policy disruption, avoiding changes to eligibility thresholds or benefits.
Implementation timeline (2027) allows states to adapt systems and processes, limiting compliance shocks.
Targets a politically popular, low-controversy goal: preventing waste, fraud, and abuse without reducing legitimate coverage.

Cons

Treating DMF data as dispositive for disenrollment, combined with the no-advance-notice rule, risks wrongful terminations and care disruptions if the DMF contains errors or mismatches.
The bill provides no funding to help states improve IT systems, staff capacity, beneficiary communications, or appeals processes—an unfunded administrative mandate.
Quarterly batch terminations triggered by data matches could create spikes in erroneous disenrollments and provider billing confusion, even with retroactive reinstatement.
Does not add new due-process safeguards (e.g., post-termination notice requirements, easy reinstatement pathways, or beneficiary outreach) beyond the existing regulation.
Excludes U.S. territories, reinforcing inequities in Medicaid oversight standards and potentially leaving federal dollars there more vulnerable to similar errors.
Focuses on a relatively small slice of improper payments, arguably diverting attention from larger systemic drivers of Medicaid errors (documentation, income verification processes, managed care payment accuracy).
Retroactive reinstatement helps beneficiaries but does not prevent potential short-term loss of access to medications or appointments if coverage appears terminated in real time.
Increased reliance on data matching raises privacy and data-security concerns if states expand use of third-party vendors or link additional datasets.

Imposes a new federal mandate on states without accompanying funding, which some Republicans may view as an unfunded mandate and federal overreach.
Quarterly checks may be seen as insufficiently aggressive by those favoring monthly or real-time matches to further minimize improper payments.
By excluding territories, the bill leaves a gap in program integrity and could be criticized as incomplete.
The reinstatement provision, while fair, could be seen as inviting administrative churn and potential gaming if not tightly controlled.
States with already strong integrity systems may view the requirement as duplicative, adding compliance documentation without meaningful gains.
The bill focuses solely on death-based improper payments rather than tackling broader eligibility verification reforms some Republicans favor (e.g., more frequent income or residency checks).

This bill was introduced on February 20, 2025 in the Senate.

View on Congress.gov:
https://www.congress.gov/bill/119th-congress/senate-bill/678

Feb 20, 2025

Read twice and referred to the Committee on Finance.
Feb 20, 2025

Introduced in Senate

10000

This bill has not yet been enacted into law.

Bill Summary

Pros

Cons

Introduction

History

Read twice and referred to the Committee on Finance.

Introduced in Senate

Laws Enacted

Related Bills