Audit of Medicare Cost Reports And Duplicate Payments For Welborn Health Plans For The Fiscal Years 1999

EXECUTIVE SUMMARY OBJECTIVES The audit objectives were to determine whether $35,378,132 in costs claimed by Welborn Health Plans, Inc. (Welborn) on its Medicare cost reports were reasonable, allowable and allocable; in accordance with Medicare provider reimbursement principles and guidelines; and whether payments for provider services claimed on Welborn’s cost reports were also reimbursed under the Medicare fee-for-service payment system. FINDINGS Based on our review, we consider all costs, except the $700 claimed for an unallowable and unallocable retirement party, to be reasonable, allowable, and allocable. We also determined that the Medicare program improperly paid $96,923 in fee-for-service claims submitted by two of Welborn’s providers that were already reimbursed for these services through capitated payments. Welborn claimed the capitated payments on its Medicare cost reports. We attribute the duplicate payments to Welborn’s failure to establish required internal controls to detect the Medicare fee-for service billings by their providers. RECOMMENDATIONS We recommend that Welborn: • Refund the $700 related to unallowable costs claimed on the FY 2000 cost report. • Refund the $96,923 of duplicate Medicare fee-for-service payments made to its providers. • Review its duplicate payment detection policies and assess the effectiveness of the Medicare compliance training provided to participating providers. AUDITEE’S RESPONSE In a written ...