Gov't audit insider 1/13/04: Termination and severance costs
Healthcare Auditing Weekly, January 13, 2004
The OIG's objective for this review was to determine whether the termination and severance costs related to Medicare contract termination claimed by United HealthCare, based in Meriden, CT, were allowable, allocable, and reasonable in accordance with Medicare contract provisions and instructions, federal regulations, and company policies. The OIG used the following steps:
1. Examined the nine termination vouchers and the four severance vouchers totaling $10,806,497 in costs claimed for reimbursement by United HealthCare for the period October 1, 2000, through June 30, 2002. These costs included $8,554,948 for termination costs and $2,251,549 for severance costs.
2. Examined applicable Medicare contract provisions and instructions, federal regulations, and United HealthCare company policies to determine whether the amounts claimed met reimbursement requirements.
3. While examining the termination and severance vouchers, the OIG obtained supporting expense reports, payroll reports, and personnel records to do the following:
4. Interviewed United HealthCare officials to determine the methods used in calculating some claimed costs that, according to the OIG's analysis, did not meet reimbursement requirements.
5. Discussed the objectives of the review with Centers for Medicare and Medicaid Services (CMS) headquarters and regional office officials to identify requirements CMS placed on carriers and intermediaries to ensure costs claimed by United HealthCare were allowable, allocable, and reasonable in accordance with Medicare contract provisions and instructions.
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