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EXECUTIVE SUMMARY:
Our audit objective was to determine whether care plan oversight (CPO) claims for which National Heritage Insurance Company (NHIC) paid more than $150 were billed and paid in accordance with Medicare requirements. For calendar years 2001 through 2003, CPO claims for which NHIC paid more than $150 were not billed or paid in accordance with Medicare requirements. As a result, 14 California physicians were overpaid $14,800. These overpayments occurred because physicians or physician billing contractors misunderstood the Medicare billing requirements for CPO services or incorrectly billed due to computer software and clerical errors, and NHIC did not have controls to detect CPO claims billed with more than 1 unit of service. We recommended that NHIC recover the $14,800 in overpayments for CPO services, identify and recover Medicare overpayments for CPO claims billed with more than 1 unit of service provided subsequent to our audit period, remind physicians of the Medicare billing requirements for CPO services, and implement controls to detect CPO claims billed with more than 1 unit of service. NHIC concurred with our findings and recommendations.