Review of Employees Health Care Fringe Benefit Costs Reported Under Medicare by the Former Humana Hospital San Antonio

This final audit report points out that Humana, Inc. corporate headquarters had improperly reported to the Medicare program a portion of the employee health care fringe benefit costs for all of its hospitals for the 3 fiscal years ended August 31, 1990. A fiscal intermediary for Humana, Inc. (AdminaStar) working with other Medicare FIs having responsibility for the approximately 80 Humana hospitals identified overcharges totaling about $92.9 million for employee benefits/group health insurance. AdminaStar also found that patient charges for this same period were overstated by approximately $90 million. The FIs are adjusting individual hospital's cost reports. We are recommending that the Health Care Financing Administration (HCFA) monitor the resolution of these adjustments to ensure that appropriate recoveries are made. We are also recommending that HCFA reemphasize the need for all FIs to carefully review whether hospitals or hospital chains are properly reporting employee health care benefit costs in situations where the services are directly rendered by the provider or a related organization. The HCFA concurred with our findings and recommendations.