Ineligible Medicare Payments to Skilled Nursing Facilities Under the Administrative Responsibility of Noridian Mutual Insurance Company

The objective of this audit was to determine the extent of ineligible Medicare Skilled Nursing Facility (SNF) payments contained in our database of payments made under the administrative responsibility of Noridian Mutual Insurance Company (Noridian).  Our review of the database estimated that $2.4 million of ineligible SNF payments were made under the administrative responsibility of Noridian during calendar years 1997 through 2001.  The overpayments occurred because of the absence of an automated cross-check, within the Centers for Medicare and Medicaid Services (CMS) Common Working File and the Fiscal Intermediary's claims processing systems, verifying that a three consecutive day inpatient hospital stay occurred prior to SNF admission.  Noridian agreed with our findings.  However, per CMS instructions, Noridian will not initiate recovery action until further guidance is received from CMS.