Review of Medicare Payments for Beneficiaries with Institutional Status - Group Health Plan, Earth City, Missouri

The objective of this review was to determine if capitation payments to Group Health Plan (Contract H2663) were appropriate for beneficiaries reported as institutionalized.  We determined that Group Health Plan received Medicare overpayments totaling $11,089 for 13 beneficiaries incorrectly classified as institutionalized.   The 13 beneficiaries were part of a statistical sample of 100 Medicare beneficiaries, reported as institutionalized during the period January 1, 1998 through December 31, 1999.  Based on our sample results, we estimate that Group Health received Medicare overpayments of $98,689 for beneficiaries incorrectly reported as institutionalized.  The causes of the overpayments include difficulties with Group Health's verification and reporting process, incorrect information provided by nursing facilities, and an incorrect interpretation of institutional payment regulations.