Duplicate Medicare Payments to Cost-Based Health Maintenance Plan Excellus Health Plan for the Fiscal Years 2002, Through 2004

EXECUTIVE SUMMARY:

Our objective was to determine whether medical services provided for Excellus Health Plan's (Excellus's) enrollees by its capitated provided were reimbursed under Excellus's Medicare cost report and also through the Medicare fee-for-service payment system. We determined that Excellus's capitated provider filed Medicare claims, for which they were paid on a fee-for-service basis, while under a capitation arrangement with Excellus. The capitation arrangement, which provides for a per-member, per-month payment to Excellus's capitated provider, covered allowable service performed by the provider to Excellus's enrollees. Medicare reimbursed Excellus for the capitation payments made to the provider via the Medicare cost reports; therefore, the fee-for-service claims paid directly to the provider by Medicare are considered overpayments since Medicare has, in effect, paid twice for the same service. During our audit period, in appropriate Medicare fee-for-service billings by Excellus's capitated provider amounted to $539,138. We recommended that Excellus recover the $539,138 in duplicate Medicare fee-for-service claims and that Excellus develop an efficient and effective billing process system to preclude and detect duplicate payments.

While Excellus concurred that there were instances of duplicate payments, they did not believe that they have the necessary information to form an opinion on the total overpayment amount.