Corporate Compliance

OIG delivers clean audit to California healthcare network

Compliance Monitor, December 14, 2005

Health Net of Woodland Hills, CA has received a clean audit from the OIG.

The OIG's objective in the audit was to determine whether the Medicare Advantage organization (MAO) contractor correctly used its Medicare Prescription Drug, Improvement, and Modernization Act (MMA) payment increase.

Under Part C of the Medicare program, MAOs are responsible for providing all Medicare-covered services, except hospice care, in return for a predetermined capitated payment. The MMA provided increased capitation payments to MAOs effective March 1, 2004.

The OIG found that Health Net's use of its MMA payment increase of $5.6 million was allowable and adequately supported under the MMA. Specifically, Health Net used the increased MMA payments to reduce beneficiary cost sharing, enhance benefits, and stabilize beneficiary access to providers.

The OIG made no recommendations.

To perform the audit, the OIG

  • reviewed applicable federal laws, regulations, and guidance

  • reviewed the cover letter that Health Net submitted with its revised proposal, in which it stated how it would use the MMA payment increase

  • compared the initial proposal with the revised proposal to determine the modifications

  • reviewed the supporting documentation for the proposed use and actual use of the MMA payment increase

  • interviewed Health Net officials

      Click here to read the audit report, "Review of Health Net of California's Modifications to Its 2004 Adjusted Community Rate Proposal Under the Medicare Prescription Drug, Improvement, and Modernization Act," (A-09-05-00056) issued November 16, 2005.

    • Most Popular