Medicare Compliance & Reimbursement

Keeping up with the institutionalized status of Medicare beneficiaries enrolled in Medicare+ Choice plans has long been a compliance headache for managed care organizations - and persistent HHS Office of Inspector General scrutiny combined with nebulous requirements have only exacerbated the problem.

Medicare pays a higher monthly rate to MCOs for beneficiaries who are institutionalized, and the OIG has undertaken a series of audits to make sure plans aren't collecting excess reimbursement by misclassifying the institutionalized status of their members.

In its latest review of the issue - focusing on a Kansas City, MO plan - the watchdog agency identifies trouble spots that should be familiar to M+COs: beneficiaries incorrectly classified as institutionalized when they were in assisted living facilities, when they resided in non-approved facilities, or when they hadn't met the 30-consecutive-day minimum-stay requirement.

These purported errors happened despite extensive compliance measures the plan had put in place. Indeed, some of them resulted from inconsistencies between how providers classified patients to the plan and how they classified them to the OIG.

But the real point of controversy arose from alleged errors involving beneficiaries who didn't reside in "a certified bed, in the certified distinct part of the institution," as the OIG's report puts it. The plan argued that, in fact, there is no such notion as a "certified bed" in the Medicare+Choice regulatory structure. The OIG digs in its heels in the report, maintaining that health plans have an obligation to establish whether a "beneficiary's bed is in a Medicare or Medicaid certified facility or certified distinct part of the facility."

The OIG's report is titled "Review of Medicare Payments for Beneficiaries With Institutional Status at Coventry Healthcare of Kansas, Inc. for the Period January 1, 2000 Through May 31, 2002" (A-07-02-00148). To see it, go to http://oig.hhs.gov/oas/reports/region7/70200148.pdf.