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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Mutual of Omaha’s Oversight of Medicare Inpatient Acute Care Providers Receiving Periodic Interim Payments," (A-07-01-02616)

August 13, 2001

Complete Text of Report is available in PDF format (529 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final report points out that Mutual of Omaha did not always properly quantify periodic interim payments (PIP) to hospital providers in final cost report settlements. As a result, Mutual of Omaha overpaid five of the eight hospitals included in our review a total of $636,867. The overpayments resulted from the omission of certain payments (outlier payments) from the worksheet used to determine final payments due a provider. As a result of our work Mutual performed a comprehensive review of settled cost reports for other PIP providers and found that total overpayments were about $10.8 million. Further, this may be occurring at other fiscal intermediaries involving about 1000 hospitals nationwide that receive periodic interim payments. In addition to financial adjustments, we recommended that the Centers for Medicare and Medicaid Services (CMS) direct Mutual of Omaha to implement procedures to ensure that future cost report settlements include the proper calculation of interim payments. We also recommended that CMS work with the Office of Inspector General to determine whether interim payments made to hospitals at other fiscal intermediaries were calculated correctly at final settlement. The CMS concurred with our recommendations and is monitoring Mutual’s collection of the overpayments.