Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Medicare Payments for Beneficiaries With Institutional Status at Coventry Healthcare of Kansas, Inc. for the Period January 1, 2000 Through May 31, 2002," (A-07-02-00148)

April 11, 2003

Complete Text of Report is available in PDF format (897 Kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this review was to determine if capitalization payments to Coventry were appropriate for beneficiaries reported as institutionalized during the audit period.  Medicare generally pays a higher monthly capitation rate for enrolled beneficiaries who are residents of a Medicare or Medicaid certified institution (or the distinct part of the institution).  We determined that Coventry received Medicare overpayments totaling $132,000 for 61 beneficiaries incorrectly classified as institutionalized during the audit period.  Of these, a total of 37 beneficiaries were incorrectly classified because they were residing in assisted living facilities (19); or were residing in non-approved facilities (7); or had not met the 30 consecutive day minimum time requirement to qualify as institutionalized (11).  In addition, Coventry incorrectly classified 24 beneficiaries as institutional who were residing in the non-certified portion of the institution.  We recommend that Coventry refund overpayments of approximately $132,000, ensure adherence to policies and procedures for verifying institutional care, and develop more effective internal control procedures for verification of each beneficiary's institutional status.