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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 Blue Cross and Blue Shield of Kansas, Inc.," (A-05-04-00033)

June 28, 2004

Complete Text of Report is available in PDF format (157 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 Blue Cross and Blue Shield of Kansas, Inc. (BCBS of Kansas), contained in a database of payments made under the administrative responsibility of nine Medicare Fiscal Intermediaries (FI’s).  Our review of the database estimated that $559,282 of ineligible SNF payments were made under the administrative responsibility of BCBS of Kansas 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 (CMS) Common Working File and the Fiscal Intermediary’s (FI) claims processing systems, verifying that a three consecutive day inpatient hospital stay occurred prior to SNF admission.  BCBS of Kansas concurred with our recommendation to recoup the overpayments however, CMS issued a memorandum instructing all FIs not to initiate any recovery actions.