Review of CIGNA Government Services Durable Medical Equipment Regional Carrier Final Administrative Cost Proposals For Fiscal Years 2004 through 2006

摘要

itle XVIII ofthe Social Security Act established the Health Insurance for the Aged and Disabled (Medicare) program, which provides for a hospital insurance program (Part A) and a related supplementary medical insurance program (Part B). The Part B program includes certain medical equipment and related services, including durable medical equipment, and other medical services. The Centers for Medicare & Medicaid Services (CMS) administers the Medicare program by contracting with private organizations to process and pay claims for services provided to eligible beneficiaries. CIGNA is a holding company for Connecticut General Life Insurance Company, the legal entity that holds the Medicare contracts. CIGNA HealthCare, one of the main lines of business (also called operating divisions), administered the Medicare contracts via CIGN A Government Services, a wholly owned subsidiary of CIGNA. During the period October 1, 2003, through September 30, 2006, CMS contracted with CIGNA to serve as the Durable Medical Equipment Regional Carrier (DMERC) for Alaska, Arizona, California, Guam, Hawaii, Idaho, Iowa, Kansas, Missouri, Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, Northern Mariana Islands, and American Samoa. CIGNA's DMERC contract with CMS provided for reimbursement of allowable administrative costs incurred. Such administrative costs include the direct costs of administering the contract as well as allocations of certain indirect costs of services or assets used by Medicare and other entities. CIGNA claimed reimbursement of administrative costs through submission to CMS of a Final Administrative Cost Proposal (FACP). For October 1, 2003, through September 30,2006 (fiscal years (FY) 2004 through 2006), CIGNA claimed $75,434,990, including $124,660 in forward funding, in reimbursement for direct and indirect costs related to its DMERC contract. OBJECTIVE Our objective was to determine whether the administrative costs claimed on CIGNA's DMERC F ACPs for FY s 2004 through 2006 were reasonable, allocable, and allowable for Medicare reimbursement. Of the $75,310,330 in administrative costs reviewed, CIGNA appropriately claimed $75,110,913 on its FACPs for FYs 2004 through 2006. However, we identified $199,417 in indirect costs that CIGNA did not support as reasonable, allocable, or allowable for Medicare reimbursement because it did not comply with Federal requirements for maintaining adequate accounting records covering the use of funds.