EXECUTIVE SUMMARY:
This report provides the results of our "Review of Group Health Incorporated Demand Payment Recovery Procedures Under the 1989 Omnibus Budget Reconciliation Act Data Match Project." The objective of our audit was to determine if Group Health Incorporated (GHI) had an adequate system to track, adjudicate and collect potential Medicare secondary payer (MSP) claims identified through the 1989 Omnibus Budget Reconciliation Act (OBRA) Data Match Project (DMP). Our audit covered management controls implemented by GHI during the period July 1992 through September 1994.
To accomplish our audit objective, we evaluated management controls implemented by GHI to reasonably assure compliance with the DMP demand payment recovery guidelines established by the Health Care Financing Administration (HCFA) for Medicare Part B carriers. As part of this evaluation, we reviewed a representative sample of 40 finalized and pending DMP recovery cases (potential mistaken payments of $186,148) recorded on HCFA's Mistaken Payments Recovery Tracking System (MPaRTS) as of July 14, 1994. As of this date, MPaRTS identified a total of 2,103 finalized GHI cases ($3.8 million) and 89,387 pending GHI cases ($83.9 million).
We found that GHl's management controls were not fully effective in assuring compliance with HCFA DMP recovery procedures with respect to: case file documentation, timeliness of the demand and recovery process, timeliness in updating of MPaRTS.
As a result, there was no assurance that DMP demand payments were being tracked, adjudicated and recovered in the most effective and timely fashion. We attribute these conditions primarily to a misunderstanding of HCFA guidelines and instructions, the use of an ineffective manual system of flagging, aging and prioritizing DMP recovery cases, and the need for specific procedures to assure the timely update of MPaRTS data.
We are recommending that GHI: (1) establish procedures to implement the use of the HCFA accountability worksheet or equivalent audit trail documentation needed to reconcile and document the differences between the original potential mistaken payment amounts identified and the actual amount recovered and credited to the Medicare program; (2) establish a computerized tracking system to flag, age and prioritize DMP cases to assure that recoveries to the Medicare trust fund are made in a timely fashion; and (3) establish procedures to assure timely updates of MPaRTS data by contractor staff.
The GHI responded to a draft of this audit report on March 13, 1996. In its response, the carrier generally agreed with our findings, but contended that corrective actions had already been taken at the time of our on-site review in 1994, thus negating our recommendations. The GHI comments to our draft report have been summarized after the recommendations section of this report and have been included as an appendix to this report.