Corporate Compliance

Gov't audit insider 12/30/03: Review of cost data documentation

Healthcare Auditing Weekly, December 30, 2003

The Office of Inspector General's (OIG) objective for this audit was to determine whether documentation available to Highmark, Inc. for fiscal years 1998 through 2001 was sufficient to support the payments to subcontractors in accordance with appropriate regulatory guidance.

The OIG used the following methodology:

1. Reviewed the "Report of Examination of Administrative Costs incurred under the Health Insurance for the Aged and Disabled (Medicare) Part A & B, Highmark Inc., for the period October 1, 1997 through September 30, 2001," prepared by Carmichael Brasher Tuvell & Company. The audit report stated that they were unable to render an opinion on $5,287,739 for the amounts paid to Highmark's two subcontractors.

2. Verified the annual reimbursement rates for all 12 categories of workload for each of the four fiscal years reviewed that were included in the purchase service agreement and updated annually.

3. Obtained workload information from the subcontractors' Medicare Monthly Workload Report (308 Report), the same report used by Highmark to obtain reimbursement for its Medicare workload. That report included workload information for five workload categories-bills paid, written inquiries, walk-in inquiries, beneficiary inquiries, and provider inquiries.

4. Reviewed a consolidated spreadsheet prepared by Highmark financial personnel that identified reimbursement rates, the number of units performed, and the total dollar value of the services for all 12 workload categories. Financial personnel compiled that workload information from various source documents, including the existing 308 Report and from facsimile, email correspondence, telephone call documentation that no longer exist.

Click here to read the audit report "Review of Selected Cost Data Documentation of Highmark, Incorporated."

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