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093541 1 (1974-03-22)

handle is hein.gao/gaobacxfj0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D C 20548 MANPOWER AND WELFARE DIVISION March 22, 1974 Mr. James B. Cardwell Commissioner of Social Security Department of Health, Education, and Welfare Dear Mr. Cardwell, The General Accounting Office has reviewed the methods used to reimburse the Southern California region of the Kaiser Foundation Health Plan, Inc under part B of the Medicare program. Kaiser is a Group Practice Prepayment Plan (GPPP) which has elected to deal directly with SSA These direct dealing GPPPs are required to submit year-end cost reports showing the cost of services furnished to Medicare patients based on either reasonable costs or reasonable charges The Kaiser Health Plan elected the reasonable charge option and was therefore eligible to receive reimbursement for financial requirements in excess of allowable costs if such charges were equally shared by other non-Medicare GPPP members This additional payment was called the equalization factor. In February 1973, we provided SSA and the Kaiser Health Plan for their advance comments, copies of a draft report to the Secre- tary of HEW entitled Impact of Organizational Relationships in Payments to Health Maintenance Organizations. After considering Kaiser's comments of March 16, 1973, and SSA's comments of May 7, 1973, we have decided not to issue the proposed report to the Secretary. The purpose of this report is to advise you of certain payments to the Southern California region of the Kaiser Health Plan which appeared to us inconsistent with the SSA reimbursement instructions (GPPP Manual) for direct dealing GPPPs and which had not been ques- tioned in prior HEW or subcontracted audits These questionable payments--which totaled about $35,000 of the $4.3 million in Medicare reimbursement to the Health Plan in calendar year 1970--have been discussed with SSA and Kaiser officials. Our findings and the related pertinent comments are summarized below.

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