Duplicate Medicare Payments to Cost-Based Health Maintenance Organizations Plans for Dean Health Plan, Inc. for Fiscal Years 2000, Through 2003

EXECUTIVE SUMMARY:

The objective of the audit was to determine whether services performed by the Dean Health Plan, Inc.'s capitated provider were also being reimbursed under the Medicare fee-for-service payment system. We determined that Dean's capitated provider filed Medicare claims, for which they were paid on a fee-for-service basis, while under a capitation arrangement with Dean.  The capitation arrangement, which provides for a per member, per month payment to Dean's capitated provider, covered allowable service performed by the provider to Dean's enrollees.  Medicare reimbursed Dean for the capitation payments made to the provider via the Medicare cost reports; therefore, the fee-for-service claims paid directly to the provider by Medicare are considered overpayments.  During our audit period, inappropriate Medicare fee-for-service billings by Dean's capitated provider amounted to $91,710. 

We recommended that Dean recover the $91,710 in duplicate Medicare fee-for-service claims made to the capitated provider and that Dean develop an efficient and effective billing process system to preclude and detect duplicate payments from the capitated provider.  Dean Health Plan, Inc. agreed with our recommendations.