Follow-up Audit of the Review of Accounts Receivable Amounts Reported by Associated Hospital Service of Maine (Anthem) at March 31, 1999

EXECUTIVE SUMMARY:

In a prior report (A-01-99-00512), Anthem Health Plans of Maine (Anthem) overstated accounts receivable by $17.5 million in unsupported receivables for the period ended March 31, 1999.  We performed a follow-up review to determine whether (1) recommended actions in our prior report have been implemented or are in process, and (2) such actions have led or will lead to the resolution of the prior findings.  We found that Anthem had adequately made most of the recommended adjustments and adequately strengthened its financial reporting system.  However, Anthem still carried $10.2 million in unsupported Medicare secondary payer (MSP) balances on its financial statements at December 31, 2001.  We recommended that Anthem adjust the MSP receivable balance downward by $10.2 million.  Anthem agreed with our recommendation and made the adjustment accordingly.

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