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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of the Health Care Financing Administration's Regional Office Accounts Receivable in Region IV," (A-04-99-03015)

March 28, 2000


Complete Text of Report is available in PDF format (1.84 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

Medicare accounts receivable represent funds owed to the Health Care Financing Administration (HCFA) by: (1) Medicare providers that HCFA's contractors overpaid for a variety of reasons; and (2) other entities who should have paid the claims as primary insurer when Medicare was the secondary payer.

The Medicare contractors are responsible for managing, including reporting and collecting, the majority of the accounts receivable balances. The HCFA's Central Office (CO) and Regional Offices (RO) are responsible for managing the remaining balances. For financial reporting purposes, HCFA's non-contractor accounts receivable balances are taken from the: (1) Provider Overpayment Reporting (POR) system; (2) Physician/Supplier Overpayment Reporting (PSOR) system; and (3) Regional Office Status of Accounts Receivable Reports (HCFA Forms R751A and R751B).

We reviewed non-contractor and non-central office accounts receivable. The HCFA RO IV POR at September 30, 1998 totaled $89,620,513 in accounts receivable. At March 31, 1999, the accounts receivable increased to $183,775,666.

The HCFA RO IV PSOR at September 30, 1998 totaled $106,327,967 in accounts receivable. At March 31, 1999, the balance increased to $121,504,854.

Our objectives for this review were to:

We concluded that HCFA's accounts receivable balances in Region IV were overstated at September 30, 1998 and March 31, 1999 for various reasons. The HCFA RO IV staff adjusted some of the overstatements as a result of their write-off decisions. However, in our opinion, additional adjustments are necessary to fairly present the accounts receivable balances.

To improve its procedures to account for its accounts receivable activity, we recommended that RO IV:

The HCFA RO IV staff generally, but not always, agreed with our conclusions regarding the accounts receivables and our recommendations. In their response, they stated the HCFA CO is developing a new system for tracking accounts receivable.