Review of TriSpan Health Services's Payments to Community Mental Health Centers for Partial Hospitalization Services for the Period August 1, 2000, Through June 30, 2003

EXECUTIVE SUMMARY:

Our objective was to determine whether TriSpan Health Services (TriSpan) calculated Medicare outlier and per diem payments to CMHCs in accordance with Medicare reimbursement requirements. TriSpan did not always calculate Medicare outlier and per diem payments to CMHCs in accordance with Medicare reimbursement requirements. When TriSpan initially established CMHC payments under the outpatient prospective payment system, it: (1) used incorrect cost report information to compute some cost-to-charge ratios, (2) incorrectly entered one cost-to-charge ratio in the outpatient provider-specific file within the claim-processing system, and (3) assigned the wrong geographic wage index factor to certain CMHCs. In addition, TriSpan did not update some CMHCs' cost-to-charge ratios in accordance with CMS guidelines. 

We recommended that TriSpan: (1) recover $7,958,659 in improper outlier and per diem payments for services rendered between August 1, 2000, and June 30, 2003; (2) review claims with dates of service subsequent to our audit period and make any necessary financial adjustments; and (3) implement internal controls to ensure that future outlier and per diem payments are calculated with the correct cost-to-charge ratio, effective date, and wage index factor. TriSpan disagreed in part that it made errors when it initially established CMHC payments and disagreed with our first and last recommendations. However, TriSpan agreed that it had assigned the wrong geographic wage index factor and that it had not updated cost-to-charge ratios in accordance with CMS instructions. TriSpan did not fully address the second recommendation to review all claims subsequent to our audit period because TriSpan stated that it was limited to reviewing and adjusting the claims available on the system. TriSpan's comments did not provide any additional information that would lead us to change the findings, causes, or recommendations included in the draft report.