End Stage Renal Disease Special Status Beneficiaries at Humana, Inc.

EXECUTIVE SUMMARY:

In addition to a regular monthly capitation payment, health maintenance organizations receive an additional monthly payment for beneficiaries classified as end stage renal disease (ESRD) status. Our review disclosed that, from a total of 212 beneficiaries classified as ESRD status enrolled with Humana in September 1992, 25 beneficiaries were inappropriately classified. These 25 beneficiaries did not meet the Health Care Financing Administration's (HCFA) regulations for ESRD classification. As a result, Humana received overpayments of $1,644,547 between October 1, 990 and December 31, 1993 for the 25 beneficiaries. In addition to financial adjustments, we recommended that Humana monitor the monthly HCFA Special Status Beneficiary report and notify HCFA of beneficiary status changes where appropriate. Humana concurred with our recommendations and presented a plan of action to implement them.