CRA investigates overpayment from a managed care payer

CRA was hired by the audit committee of a large regional healthcare system that needed assistance understanding the facts surrounding a large overpayment from a managed care payer. CRA professionals performed an independent investigation that included interviews with staff to understand the processes in place that led to the overpayment and why the overpayment remained undetected for so long. As part of our investigation, we reviewed documentation to test the controls and the accounting for the overpayment. Our work included the analysis of a variety of key industry performance indicators used by the provider including realization, payer mix, cash collections, and accounts receivable aging. Our work confirmed allegations that uncovered management’s use of the overpayment to meet certain financial benchmarks in order to increase the likelihood of staying independent.