Review of Medicare Payments to Health Maintenance Organizations for Medicaid Special Status Beneficiaries

EXECUTIVE SUMMARY:

The Health Care Financing Administration (HCFA) makes fixed monthly payments to health maintenance organizations (HMOs) for Medicare beneficiaries. The payment rate is increased for certain high-cost categories of beneficiaries. Medicare beneficiaries who are also eligible for Medicaid (Medicaid status) make up one of these high-cost categories. This final report points out that based on OIG's earlier work the HCFA has identified overpayments to HMOs nationwide totaling almost $70.5 million for beneficiaries who were not eligible for Medicaid. The overpayments occurred because an interface between HCFA computer systems did not recognize those beneficiaries initially classified as Medicaid-status, but who had subsequently lost their Medicaid eligibility. The HCFA concurred with our recommendation that HCFA take action to collect the overpayments.