Audit of Medicare Adjusted Community Rate Proposals Submitted by 55 Medicare+Choice Organizations for

Office of Inspector General DEPARTMENT OF HEALTH HUMAN SERVICES * JUL 152002 Memorandum Fr $7 Janet Rehnquist Inspector General SubiectAudit of Medicare Adjusted Community Rate Proposals Submitted by 55 Medicare+Choice Organizations for Contract Year 2000 (A-09-01-0005 1) To Thomas Scully Administrator Centers for Medicare & Medicaid Services Attached are two copies of our final report entitled, “Audit of Medicare Adjusted Community Rate Proposals Submitted by 55 Medicare+Choice Organizations for Contract Year 2000.” The objective of our review was to summarize for the Centers for Medicare & Medicaid Services (CMS) the results of our reviews (made at CMS’s request) of 186 adjusted community rate proposals (ACRP)’ submitted by 55 Medicare+Choice (M+C) organizations for the Contract Year (CY) 2000. In general, we found that: * 49 percent of the ACRPs reviewed were not prepared in accordance with CMS’s instructions. * 66 percent of the ACRPs reviewed contained errors that affected at least one of the three components of the adjusted community rate. * 36 percent of the ACRPs reviewed overstated the beneficiary premiudcost sharing amounts andor the M+C organization should have offered extra additional benefits had the amounts for direct medical care, administration, average payment rate, and copayment amounts been properly calculated. Our reviews found ACRPs that had calculation errors which affected, either positively or negatively, one ...