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The objective of our review was to determine whether high-dollar Medicare payments that Chisholm Administrative Services (Chisholm) made to providers for outpatient services were appropriate. All of the high-dollar Medicare outpatient payments were not appropriate. For calendar year 2003 and 2004 claims, Chisholm made 14 payments of $50,000 or more each for outpatient services. Our analysis indicated that, at the start of our fieldwork in February 2007, eight of the payments were incorrect, and the providers had refunded the $497,497 in overpayments, but six additional payments were incorrect and the provider had not refunded the $514,323 in overpayments. All overpayments that occurred during our review were due to incorrect, billing units. We recommended that Chisholm inform us of the status of the recovery of the $514,323 in overpayments that our audit identified and use the results of this audit in its provider education activities. Chisholm agreed with our findings and recommendations.