Review of Costs Claimed by American Health Care Services

EXECUTIVE SUMMARY:

This final report points out that 24 percent of the claims made by American Health Care Services (American) during the Fiscal Year (FY) ended December 31, 1993 did not meet Medicare reimbursement guidelines. Eleven percent were for visits which in the opinion of medical experts were not reasonable or necessary, 4 percent were for services not provided, and 9 percent were for services which physicians either denied authorizing or authorized improperly. Of the $8.5 million claimed by American for the FY, we estimate at least $1.2 million did not meet the reimbursement guidelines. We recommended that the Health Care Financing Administration (HCFA) require the fiscal intermediary (FI) to instruct American on its responsibilities to properly monitor its subcontractors for compliance with Medicare regulations and HCFA guidelines, monitor the FI and American to ensure that corrective actions are effectively implemented, recover all overpayments, and direct the FI to investigate all cases of possible fraud and refer them as necessary to the Office of Inspector General's Office of Investigations