Review of Medicare Payments for Beneficiaries with Institutional Status - Kaiser Foundation Health Plan, Cleveland, Ohio

EXECUTIVE SUMMARY:

The objective of this review was to determine if capitation payments to Kaiser Foundation Health Plan were appropriate for beneficiaries reported as institutionalized.  We determined that Kaiser received Medicare overpayments totaling $11,214 for 15 beneficiaries incorrectly classified as institutionalized.  The 15 beneficiaries were part of a statistical sample of 100 Medicare beneficiaries reported as institutionalized during the period January 1, 1996 through December 31, 1998.  Based on our sample results, we estimate that Kaiser received Medicare overpayments of at least $49,963 for beneficiaries incorrectly classified as institutionalized.  The majority of the overpayments occurred because, prior to 1997, Kaiser staff did not consistently verify the institutional residency of beneficiaries.