First Coast Service Options, Inc., President's Council on Integrity and Efficiency Debt Collection Initiative

EXECUTIVE SUMMARY:

The objectives of this audit were to: (1) determine the amount of non-tax delinquent debt owed to Medicare that existed at September 30, 2000; and (2) assess the collectibility of the delinquent debt at the contractor level for the same period. The accounts receivable balances First Coast Service Options, Inc., (FCSO) reported to the Centers for Medicare & Medicaid Services (CMS) for financial statement purposes for the period ending September 30, 2000 for Part A (non-Medicare Secondary Payor (MSP) and MSP) accounts receivable was $309,333,980 and the balance for Part B (non-MSP and MSP) was $129,570,480. Our reconciliation of the subsidiary accounts to the general account showed the Part B non-MSP was overstated over $9 million. Other audit tests we performed on statistical samples of Part A non-MSP and Part B non-MSP balances showed the vast majority of receivables were recorded, supported, complete, properly valued and existed at September 30, 2000. However, we did recommend that the contractor: (1) reduce four Part A balances totaling over $33 thousand and two Part B balances totaling over $144 thousand; (2) correct status codes on seven Part A and one Part B balances to show the accurate location of the balances; and (3) establish a system of internal control that will provide adequate and timely tracking of its collection activities. Contractor officials generally agreed with our findings and recommendations.