Review of Medicare Payments Made to PacifiCare of Texas Incorporated, a Health Maintenance Organization in San Antonio, Texas

This audit is one of a series of reviews the Office of Inspector General is conducting under our "Strategic Plan for the Oversight of Managed Care". The final report points out that PacifiCare (a risk-based health maintenance organization) received overpayments totaling $617,577 on behalf of Medicare beneficiaries who were erroneously classified as; (1) eligible for Medicaid (dual eligible), (2) an end-stage renal disease (ESRD) beneficiary, or who no longer resided in PacifiCare's service area (out-of-area). In addition to a financial adjustment, we recommended actions PacifiCare can take to preclude erroneous classification of Medicare beneficiaries in the above categories. Officials of PacifiCare concurred in all our findings and recommendations.