Medicare Compliance & Reimbursement
High Admin Costs Will Atrract Curious Auditors
Medicare says adequate cost control procedures can save providers from the kind of scrutiny one health care company faced.
In an audit of United HealthCare Insurance Company's (UHC) Final Administrative Cost Proposals, the HHS Office of Inspector General (OIG) found more than $12 million of noncompliant claims filed from 1997 to 2000, according to a March 25 press release.
The Centers for Medicare and Medicaid Services says it won't reimburse for these claims for Medicare Parts A and B, Railroad Retirement Board and the durable medical equipment Medicare provisions.
Example: UHC charged Medicare $7 million in data center costs with an unallowable 15 percent surcharge and $5.1 million for general administrative costs because of excessive overhead, CMS alleges.
Contesting the allegations, UHC says that the data center costs arose from data services purchases from IBM Global Services. Also, Medicare did not require UHC to apply its coordination-of-benefits credits to offset its direct Medicare-operations costs, UHC claims.
UHC conceded to only $785,335 worth of "unallowable" claims, which included duplicated claims and rental costs wrongly charged to Medicare.
To read the audit report and UHC's response, go to www.oig.hhs.gov/oas/reports/region1/10200509.pdf.
Lesson Learned: A provider's administrative costs could become the subject of an intense investigation if it doesn't keep an eye on what it bills to Medicare..
Medicare Compliance & Reimbursement
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