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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Duplicate Medicare Payments to Cost-Based Health Maintenance Organizations Plans for Arnett Health Plan, Inc. for the Fiscal Years 2000, Through 2003," (A-05-05-00044)

September 9, 2005

Complete Text of Report is available in PDF format (203 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of the audit was to determine whether services performed by the Arnett Health Plan Inc.ís capitated provider were also being reimbursed under the Medicare fee-for-service payment system.  We determined that Arnett's capitated provider filed Medicare claims, for which they were paid on a fee-for-service basis, while under a capitation arrangement with Arnett.  The capitation arrangement, which provides for a per member, per month payment to Arnett's capitated provider, covered allowable service performed by the provider to Arnett's enrollees.  Medicare reimbursed Arnett for the capitation payments made to the provider by Medicare are considered overpayments.  During our audit period, inappropriate Medicare fee-for service billings by Arnett's capitated provider amounted to $111,862. 

We recommended that Arnett recover the $111,862 in duplicate Medicare fee-for-service claims made to the capitated provider and that Arnett develop an efficient and effective system to preclude and detect duplicate payments from the capitated provider.  Arnett Health Plan, Inc. refunded $24,042 to Medicare and that the remaining $87,820 will be refunded.  Arnett has taken action to enhance their duplicate payments policies and procedures.