Corporate Compliance

GOV’T AUDIT INSIDER: Improper Medicare payments blamed on automation problems

Healthcare Auditing Weekly, October 19, 2004

Medicare improperly paid approximately $187,458 from January 1, 1997, to December 31,2001 to skilled nursing facilities (SNF), attributable to Blue Cross and Blue Shield (BCBS) of Montana, Inc., according to an Office of Inspector General (OIG) audit report. The audit, conducted during May and June, showed that the improper payments were not attributable to inappropriate actions by BCBS. Rather, an absence of automated cross-checking within the Centers for Medicare & Medicaid Services' Common Working File (CWF), and BCBS of Montana's claims-processing system was to blame. The OIG recommends that BCBS of Montana initiate recovery actions of $187,458 or support the eligibility of the individual stays included in the database, and initiate SNF provider education. During the audit, the OIG did the following:

  • Selected a statistical sample of 200 SNF stays from a database

  • Compared the SNF admission information to inpatient information on the CWF system

  • Reviewed the inpatient listing claims screen for each of the 200 selected SNF stays

  • Projected the amount of SNF payments eligible for Medicare reimbursement

  • Measured the number of eligible Medicare reimbursements that were inadvertently included in the database

  • Adjusted the database of ineligible SNF payments and calculated the upper and lower limits at the 90% confidence level

  • Estimated the lower limit of the 90th percentile

  • Computed BCBS of Montana's percentage of the estimate and applied it to the overall sample projection

    Click here to read the audit report, "Ineligible Medicare Payments to Skilled Nursing Facilities Under the Administrative Responsibility of Blue Cross and Blue Shield of Montana, Inc.," (A-05-04-00060), issued September 3.

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