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Gov't audit insider: Learn from one intermediary's mistakes

Healthcare Auditing Weekly, May 11, 2004

Anthem Health Plans of Maine racked up almost $2.8 million in unallowable costs for various claims to Medicare, the Office of Inspector General (OIG) said in an audit of the Fiscal Intermediary's (FI) books, April 5. The OIG could use the same approach to scrutinize your organization's accounts.

To determine whether Anthem had effective controls over its administrative costs accounting and reporting, the OIG did the following:

• Reviewed applicable Medicare contract provisions, laws, and fiscal intermediary (FI) company policies to confirm reimbursable costs
• Tested various cost categories using expense reports, payroll journals, and personnel records
• Investigated the FI's basic internal controls in both of Anthem's accounting systems, and analyzed the differences between the disparate systems
• Reconciled records with costs the FI claimed for the three-year period leading up to September 30, 2001

The audit uncovered a slew of unallowable costs, all for diverse reasons, the OIG says in its report. Check out the following breakdown of Anthem's unacceptable claims:

• $1.9 million in incentive and bonus payments that were for goals that were "too easily attainable"
• $555,579 in salaries for two departments that didn't show actual work in their time records
• $260,500 in unallowable acquisition and lobbying costs
• $60,000 in legal fees improperly allocated to Medicare

Click here to read the Anthem audit.

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