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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Ineligible Medicare Payments to Skilled Nursing Facilities Under the Administrative Responsibility of Premera Blue Cross," (A-05-04-00032)

August 16, 2004

Complete Text of Report is available in PDF format (194 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine the extent of ineligible Medicare Skilled Nursing Facility (SNF) payments, attributable to Premera Blue Cross (Premera), contained in a database of payments made under the administrative responsibility of nine Medicare Fiscal Intermediaries (FIs).  We estimated that $786,442 of ineligible SNF payments were made under the administrative responsibility of Premera during calendar years 1997 through 2001.  The overpayments occurred due to the absence of an automated cross-check, within the Centers for Medicare and Medicaid Services Common Working File and the FI's claims processing systems, verifying that a three consecutive day inpatient hospital stay occurred prior to SNF admission.  Premera stated that they would not initiate recovery actions on the ineligible payments within our database due to the CMS memorandum that instructed all Medicare FIs not to seek recovery.