Review of Quality Improvement Organization in Texas

Of the $6.5 million in costs incurred by TMF Health Quality Institute (TMF) for the period February 1, 2003, through January 31, 2006, $403,000 was unallowable and $49,000 was potentially unallowable.

The Senate Finance Committee requested that the Office of Inspector General assess the fiscal integrity of the Medicare Quality Improvement Organizations with respect to six specified fiscal integrity areas. This report is one of a series of nine reports on audits of QIOs nationwide.

We recommended that TMF (1) refund $17,000 for unallowable legal fees and consultant travel; (2) reduce the indirect cost pool by $386,000 for severance packages for executives, board member and executive travel, and conference costs; and (3) work with the CMS contracting officer to determine what portion of the $49,000 incurred for compensation during our audit period should be excluded from the indirect cost pool for purposes of determining final rates.  TMF disagreed with most of our findings and believes that only $35,200 was unallowable.