U.S. flag

An official website of the United States government

Dot gov

The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.


The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Medicare Adjusted Community Rate Proposals Submitted by 55 Medicare+Choice Organizations for Contract Year 2000," (A-09-01-00051)

July 15, 2002

Complete Text of Report is available in PDF format (633 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final report summarizes the results of our reviews, made at the request of the Centers for Medicare & Medicaid Services (CMS), of 186 adjusted community rate proposals (ACRPs) submitted by 55 Medicare+Choice (M+C) organizations for Contract Year 2000. In general, we found that: 49 percent of the ACRPs were not prepared in accordance with CMS’ instructions; 66 percent contained errors that affected at least one of the three components of the adjusted community rate (direct medical care, administration, or additional revenues); and 36 percent overstated the beneficiary premium/cost sharing amounts and/or did not provide additional benefits. We were unable to determine an overall dollar effect of the miscalculated ACRPs, however, there could have been a significant impact on (1) payments made by the M+C organizations to their providers, (2) out-of-pocket expenses of the beneficiaries, and (3) amount of profit earned by the M+C organizations. Among other things, we recommended that CMS (1) reiterate to M+C organizations the importance of following CMS’ instructions in preparing the ACRPs, (2) work with the M+C organizations to have them develop corrective actions to address the deficiencies noted in our audits to ensure that future ACRP submissions are correct, and (3) perform follow-up evaluations of such actions. The CMS generally concurred with our recommendations.