Audit of Medicare Payments to Pacificare for Beneficiaries Classified as Institutionalized in States Other Than California in January 1998

Medicare pays a higher capitation rate for Medicare beneficiaries who are institutionalized.  This final report shows that PacifiCare plans outside California did not implement a policy letter issued by the Centers for Medicare & Medicaid Services in a timely manner.  PacifiCare claimed the higher rate for some beneficiaries who were not institutionalized in December 1997, resulting in overpayments for January 1998. We estimated these overpayments to be in excess of $700,000.