Department of Health and Human Services

Office of Inspector General -- AUDIT

"Medicare 2002 Financial Statement Activity at Noridian Mutual Insurance Company," (A-07-02-04001)

October 28, 2002

Complete Text of Report is available in PDF format (667 KB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine whether Medicare fee-for-service claims were: furnished by certified Medicare providers to eligible beneficiaries; reimbursed by Medicare contractors in accordance with Medicare laws and regulations; and medically necessary, accurately coded, and sufficiently documented in the beneficiariesí medical records.  The period of this audit was the quarter of January 2002 through March 2002.  Our review of 423 claims totaling $240,656 disclosed that 58 claims did not comply with Medicare laws and regulations.  These 58 claims had 80 line item errors representing $3,999 in improper payments.  An additional 21 line items were billed for less services or with a lower code than was supported by the medical records.  These 21 line items would have resulted in $2,689 in additional payments if the provider had billed the maximum supportable code or number of services supported by the medical records.  One other line item was underpaid $72 because it was manually priced incorrectly during the payment process.  The combination of the overpayments and underpayments resulted in a net overpayment to providers totaling $1,238.  When these claims were originally submitted to Noridian, they contained no visible errors.  In addition, we found that accounting controls over certain financial statement activities need to be improved in order to prevent misstatement of the CMS financial statements.