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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Payments for Institutionalized Beneficiaries Made to Medica Health Maintenance Organization in Minneapolis, Minnesota," (A-05-94-00053)

May 30, 1995

Complete Text of Report is available in PDF format (1.4 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This audit is one of a series of reviews the Office of Inspector General is conducting under our "Strategic Plan for the Oversight of Managed Care". The findings from this review may result in a special managed care fraud alert. The final report points out that Medica, a health maintenance organization, received improper payments under its Medicare risk-based contract on behalf of beneficiaries who were improperly classified as institutionalized. We estimate the improper payments totaled at least $861,615 over a 5 year period. In addition to a financial adjustment, we recommended that Medica establish more prescriptive policies and procedures for monitoring and reporting their beneficiaries' institutional status. Medica officials generally agreed with our findings and recommendations.