Review of TriSpan Health Services's Payments to Synergy Behavioral Health for Partial Hospitalization Services for the Period August 1, 2000, Through June 20, 2003

EXECUTIVE SUMMARY:

Our objective was to determine whether TriSpan Health Services (TriSpan) calculated Medicare outlier and per diem payments to Synergy Behavioral Health (Synergy) in accordance with Medicare reimbursement requirements. 

TriSpan did not calculate Medicare outlier and per diem payments to Synergy in accordance with Medicare reimbursement requirements. In calculating outlier payments, TriSpan (1) used incorrect cost report information to compute Synergy's cost-to-charge ratio, and (2) incorrectly entered the ratio in the outpatient provider-specific file within the claim-processing system. In calculating per diem payments, TriSpan assigned the wrong geographic wage index factor to Synergy.

We recommended that TriSpan: (1) recover from Synergy improper outlier and per diem payments totaling $8,193,433; (2) review claims with dates of service subsequent to our audit period to ensure that they were paid in accordance with Medicare reimbursement requirements 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. In its comments on our draft report, TriSpan did not agree with most of the findings, the cause, or the first and last recommendations. However, TriSpan agreed that by using the Medicare charges on a particular cost report worksheet, it computed a higher cost-to-charge ratio that resulted in larger outlier payments. TriSpan also agree that it had assigned the wrong geographic wage index factor to Synergy.