Review of the Accounts Receivable Balances for the Hospital Insurance and Supplementary Medical Insurance Trust Funds at September 30, 1991

EXECUTIVE SUMMARY:

This final audit report points out that the Health Care Financing Administration (HCFA) and Medicare contractors had not maintained fully integrated accounts receivable systems containing attributes such as full accrual accounting, aging of accounts, proper cut-off procedures, and adequate audit trails. As a result, HCFA's accounts receivable balances for the Medicare trust funds at September 30, 1991 were underreported. The HCFA estimated that there was about $1.23 billion in Medicare secondary payer overpayments which were not reported as accounts receivable balances at yearend. We recommended improvements to HCFA's financial management systems and related accounting and administrative controls.

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