Review of Resident Data Reported in the Intern and Resident Information System for Medicare Cost Reports Submitted to Highmark Medicare Services, Inc., and National Government Services, Inc.

Hospitals in Medicare Administrative Contractor (MAC) Jurisdiction 12 did not always claim Medicare graduate medical education (GME) reimbursement for residents in accordance with Federal requirements. Medicare makes two types of payments to teaching hospitals to support GME programs for physicians and other practitioners. Direct GME payments are Medicare's share of the direct costs of training interns and residents. Indirect GME payments cover the additional operating costs that teaching hospitals incur in treating inpatients.

We found that 36 hospitals overstated direct and/or indirect full-time equivalent (FTE) counts on cost reports covering fiscal years (FY) 2006 and 2007 for residents who were also included in the FTE counts on cost reports submitted by hospitals in MAC Jurisdiction 12. As a result, 29 of these 36 hospitals received excess Medicare GME reimbursement totaling $222,000 for residents who were also claimed by hospitals in MAC Jurisdiction 13 for the same period and counted in the Intern and Resident Information System (IRIS) as more than 1 FTE. For the remaining seven hospitals, the FTE overstatements did not have an effect on the hospitals' Medicare GME reimbursement..

The overstated FTE counts and excess reimbursement occurred because there was no Federal requirement for Highmark to compare IRIS data submitted by hospitals in its jurisdiction to IRIS data submitted by hospitals in other MAC jurisdictions to detect whether a resident had overlapping rotational assignments. As a result, Highmark did not have procedures to ensure that residents working at hospitals in all other MAC jurisdictions were not counted as more than one FTE in the calculation of Medicare GME payments.

We recommended that Highmark (1) recover $222,000 in excess Medicare GME reimbursement paid to 29 hospitals in MAC Jurisdiction 12, (2) adjust the direct and indirect FTE counts claimed on the Medicare cost reports covering FYs 2006 and 2007 for each of the hospitals that did not did always claim Medicare GME reimbursement in accordance with Federal requirements, (3) consider developing procedures to ensure that no resident working at hospitals in different MAC jurisdictions is counted as more than one FTE in the calculation of Medicare GME payments, and (4) consider working with National Government Services to identify and recover any additional overpayments made to hospitals in MAC Jurisdiction 12 for residents also claimed by hospitals in MAC Jurisdiction 13 and for whom the FTE count exceeded one on Medicare cost reports submitted after FY 2007. Highmark did not concur with our recommendations.