Ineligible Medicare Payments to Skilled Nursing Facilities Under the Administrative Responsibility of Blue Cross and Blue Shield of Montana, Inc.

EXECUTIVE SUMMARY:

The objective of this audit was to determine the extent of ineligible Medicare Skilled Nursing Facility (SNF) payments, attributable to Blue Cross and Blue Shield of Montana, Inc. (BCBS of Montana), contained in a database of payments made under the administrative responsibility of nine Medicare Fiscal Intermediaries (FIs).  Our review of the database estimated that $187,458 of ineligible SNF payments were made under the administrative responsibility of BCBS of Montana during calendar years 1997 through 2001.  The overpayments occurred due to the absence of an automated cross-check, within the Centers for Medicare & Medicaid Services Common Working File and the FI's claims processing systems, verifying that a three consecutive day inpatient hospital stay occurred prior to SNF admission.  BCBS of Montana agreed that overpayments occurred however; they will not initiate recovery actions on the ineligible payments within our database due to a CMS memorandum instructing all FIs not to seek recovery of overpayments identified by the OIG.