Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Payments for Beneficiaries Reported as Institutionalized by Aetna U.S. Healthcare for the Period January 1, 1996 to September 30, 1998," (A-03-99-00003)

July 7, 1999

Complete Text of Report is available in PDF format (572 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Aetna US Healthcare (AUSHC) contracts with the Federal Government to provide health benefits to Medicare beneficiaries.  The Federal Government pays AUSHC a per-member-per-month rate for each enrolled Medicare beneficiary.  AUSHC receives an enhanced rate for those beneficiaries who reside in facilities designated as institutions and who meet a qualifying 30-day residency period. Between January 1, 1996 and September 30, 1998, AUSHC incorrectly identified 12 beneficiaries in institutional status.  Six did not meet the 30-day residency requirement, while six resided in facilities that were not defined as institutions.  We recommended that AUHSC refund $113,993 in overpayments resulting from this misclassification.  This included $5,338 that represented overpayments received after September 30, 1998 for two beneficiaries that continued to be erroneously identified as institutionalized.  We also recommended that AUSHC strengthen their internal controls to prevent these errors from occurring.