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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Payments to Health Maintenance Organizations for Medicaid Special Status Beneficiaries," (A-04-94-01089)

July 14, 1995

Complete Text of Report is available in PDF format (749 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The Health Care Financing Administration (HCFA) makes fixed monthly payments to health maintenance organizations (HMOs) for Medicare beneficiaries. The payment rate is increased for certain high-cost categories of beneficiaries. Medicare beneficiaries who are also eligible for Medicaid (Medicaid status) make up one of these high-cost categories. This final report points out that based on OIG's earlier work the HCFA has identified overpayments to HMOs nationwide totaling almost $70.5 million for beneficiaries who were not eligible for Medicaid. The overpayments occurred because an interface between HCFA computer systems did not recognize those beneficiaries initially classified as Medicaid-status, but who had subsequently lost their Medicaid eligibility. The HCFA concurred with our recommendation that HCFA take action to collect the overpayments.