"Review of Quality Improvement Organization in Washington," (A-09-06-00039)
February 25, 2008
Complete Text of Report is available in PDF format (537 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.
EXECUTIVE SUMMARY:
The Senate Finance Committee requested that we assess the
fiscal integrity of the Medicare Quality Improvement Organizations with respect
to six specified fiscal integrity areas.
Of the $12.2 million of costs reviewed, $12.1 million appeared reasonable for
Federal reimbursement. The remaining $73,636 represented unallowable indirect
costs, which Qualis Health allocated to subcontracts in excess of the allowable
limit. In addition, Qualis Health overstated its (1) modified total direct
costs (MTDC) bases by $404,302 in total for fiscal years 2003 through 2005 by
including subcontract costs in excess of the allowable $25,000 per subcontract
and (2) indirect cost pool by $71,741 for fiscal year 2005 by including
unallowable organization costs.
We recommended that Qualis Health (1) refund the $73,636 of unallowable indirect
costs claimed on subcontracts and (2) reduce the MTDC allocation bases by
$404,302 in total for unallowable subcontract costs and the indirect cost pool
by $71,741 for unallowable organization costs when finalizing the indirect cost
rates with CMS. Qualis Health agreed with the finding related to unallowable
indirect costs but disagreed with the amount of the recommended refund. Based
on our evaluation of additional information concerning the finalization of
indirect cost rates, we revised our report to reflect a refund amount of
$73,636.