Review of Medicare Payments for Beneficiaries with Institutional Status, Health Net of Arizona, Inc., Phoenix, Arizona

This final report provides the results of our audit made to determine whether Medicare payments to Health Net (Contract H0351) were appropriate for beneficiaries reported as institutionalized.  We determined that Health Net received Medicare overpayments totaling $21,233 for 53 beneficiaries incorrectly reported as institutionalized during the period January 1, 1998 through December 31, 2000.  The majority of the beneficiaries were residents of domiciliary type facilities that do not qualify a beneficiary for institutional status.  Health Net should not have received payment at the enhanced institutional rate.