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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Duplicate Medicare Payments to Cost-Based Health Maintenance Plan Capital Health Plan, Inc. for Fiscal Years 2002 Through 2004," (A-05-06-00029)

September 22, 2006

PDF File Complete Text of Report is available in PDF format (190 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Our objective was to determine whether medical services provided for Capital health Plans, Inc.'s (Capital) enrollees by providers were reimbursed under Capital's Medicare capitation agreement and also through the Medicare fee-for-service payment system. We determined that Capital’s capitated providers filed Medicare claims, for which they were paid on a fee-for-service basis, while under a capitation arrangement with Capital. The capitation arrangement, which provides for a per-member, per-month payment to Capital's capitated provider, covered allowable service performed by the provider to Capital’s enrollees. Medicare reimbursed Capital for the capitation payments made to the provider via the Medicare cost reports; therefore, the fee-for-service claims paid directly to the provider by Medicare are considered overpayments since Medicare has, in effect, paid twice for the same service. During our audit period, inappropriate Medicare fee-for-service billings by Capital's capitated provider amounted to $132,075.

We recommended that Capital recover the $132,075 in duplicate Medicare fee-for-service claims and that Capital develop an efficient and effective billing process system to preclude and detect duplicate payments. Capital agreed with our findings and is taking corrective actions to enhance their ability to identify and detect potential duplicate payments. Capital states that the effectiveness of their corrective action is contingent upon their having access to automated physician information that they have previously requested from CMS and its carriers.