Federal Reports

The Office of the Inspector General (OIG) conducted an inspection of GPO’s Electronic Waste (e-waste) Processes and Procedures to evaluate and e-waste accounting, sanitization, and disposal. We found that GPO has sufficient e-waste accounting policies. However, GPO can improve its oversight of e-waste disposal and accounting once assets are transferred to the contractor. In addition GPO can clarify e-waste related directives and procedures to alleviate confusion over sanitization procedures. Management provided comments and concurred with the finding and recommendations.

GHI, a subsidiary of EmblemHealth Services Company, LLC, administered Medicare operations under Coordination of Benefits (COB) contracts with CMS. During our audit period, GHI also performed Medicare work on the Medicare Secondary Payer Recovery and Benefit Coordination and Recovery (MSPRC) contracts. GHI also performed work as a subcontractor on the Retiree Drug Subsidy (RDS) contract. GHI participates in the EmblemHealth Services Health and Welfare Benefits Plan. The purpose of this plan is to provide medical and life coverage to eligible retirees and their eligible family members. Medicare Reimbursement of Postretirement Benefit Plan CostsCMS reimburses a portion of its contractors’ PRB costs. In claiming PRB costs, contractors must follow cost reimbursement principles contained in the FAR and applicable CAS as required by the Medicare contracts. To be allowable for Medicare reimbursement, pay-as-you-go PRB costs must be assigned to the period in which the benefits are actually provided, or when the costs are paid to an insurer, provider, or other recipient for current-year benefits or premiums. Incurred Cost Proposal AuditsAt CMS’s request, Figliozzi & Company, P.C. (Figliozzi), Kearney & Company, P.C. (Kearney), and Davis Farr, LLP (Farr), performed audits of the ICPs that GHI submitted for CYs 2009 through 2016. The objectives of the Figliozzi, Kearney, and Farr ICP audits were to determine whether costs were allowable in accordance with the FAR, the U.S. Department of Health and Human Services Acquisition Regulation, and the CAS. For our current audit, we relied on the Figliozzi, Kearney, and Farr ICP audit findings and recommendations when computing the allowable PRB costs discussed in this report. We incorporated the results of the Figliozzi, Kearney, and Farr ICP audits into our computations of the audited indirect cost rates, and ultimately the PRB costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable PRB costs, as well as the Figliozzi, Kearney, and Farr ICP audit reports, to determine the final indirect cost rates and the total allowable contract costs for GHI for CYs 2009 through 2016.

GHI, a subsidiary of EmblemHealth Services Company, LLC, administered Medicare operations under a Coordination of Benefits (COB) contract with CMS. During our audit period, GHI also performed Medicare work on the Medicare Secondary Payer Recovery and Benefit Coordination and Recovery (MSPRC) contracts. GHI also performed work as a subcontractor on the Retiree Drug Subsidy (RDS) contract. During our audit period, GHI had three defined-benefit pension plans: the GHI Local 153 Pension Plan; the GHI Cash Balance Pension Plan; and the EmblemHealth Services Company, LLC, Employees’ Retirement Plan. Medicare segment employees of GHI participated in all three of these pension plans. This report addresses the allowable pension costs claimed by GHI under the provisions of its MAC contracts and CAS- and FAR-covered contracts. The disclosure statement that GHI submits to CMS states that GHI uses pooled cost accounting. Medicare contractors use pooled cost accounting to calculate the indirect cost rates (whose computations include pension, PRB, and Supplemental Executive Retirement Plan costs) that they submit on their ICPs. Medicare contractors use the indirect cost rates to calculate the contract costs that they report on their ICPs. In turn, CMS uses these indirect cost rates in determining the final indirect cost rates for each contract. CMS reimburses a portion of the annual contributions that contractors make to their pension plans. The pension costs are included in the computation of the indirect cost rates reported on the ICPs. In turn, CMS uses indirect cost rates in reimbursing costs under cost-reimbursement contracts. To be allowable for Medicare reimbursement, pension costs must be (1) measured, assigned, and allocated in accordance with CAS 412 and 413 and (2) funded as specified by part 31 of the FAR. In claiming costs, contractors must follow cost reimbursement principles contained in the FAR, the CAS, and the Medicare contracts. At CMS’s request, Figliozzi & Company, P.C. (Figliozzi), Kearney & Company, P.C. (Kearney), and Davis Farr, LLP (Farr), performed audits of the ICPs that GHI submitted for CYs 2009 through 2016. The objectives of the Figliozzi, Kearney, and Farr audits were to determine whether costs were allowable in accordance with the FAR, the U.S. Department of Health and Human Services Acquisition Regulation, and the CAS. For our current audit, we relied on the Figliozzi, Kearney, and Farr audit findings and recommendations when computing the allowable pension costs discussed in this report. We incorporated the results of the Figliozzi, Kearney, and Farr audits into our computations of the audited indirect cost rates, and ultimately the pension costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable pension costs, as well as the Figliozzi, Kearney, and Farr audit reports, to determine the final indirect cost rates and the total allowable contract costs for GHI for CYs 2009 through 2016. The cognizant Contracting Officer will perform a final settlement with the contractor to determine the final indirect cost rates. These rates ultimately determine the final costs of each contract.

GHI, a subsidiary of EmblemHealth Services Company, LLC, administered Medicare operations under Coordination of Benefits (COB) contracts with CMS. During our audit period, GHI also performed Medicare work on the Medicare Secondary Payer Recovery and Benefit Coordination and Recovery (MSPRC) contracts. GHI also performed work as a subcontractor on the Retiree Drug Subsidy (RDS) contract. The disclosure statement that GHI submits to CMS states that GHI uses pooled cost accounting. Medicare contractors use pooled cost accounting to calculate the indirect cost rates (whose computations include pension, PRB, and SERP costs) that they submit on their ICPs. Medicare contractors use the indirect cost rates to calculate the contract costs that they report on their ICPs. In turn, CMS uses these indirect cost rates in determining the final indirect cost rates for each contract. Group Health Incorporated Supplemental Executive Retirement Plan CostsGHI sponsors two SERPs: the Supplemental Executive Retirement Plan for EmblemHealth Services Company, LLC (SERP I), and the Supplemental Executive Retirement Plan II for EmblemHealth Services Company, LLC (SERP II). Both the SERP I and SERP II plans’ purpose is to provide a competitive level of benefits in order to attract and retain well-qualified senior executives of EmblemHealth Services Company, LLC. GHI’s SERPs are thus designed to restore benefits to participants who lost benefits under the GHI Local 153 Pension Plan, GHI Cash Balance Pension Plan, and EmblemHealth Services Company, LLC, Employees’ Retirement Plan because of the Internal Revenue Code, sections 401(a) and 415, limits. , This report addresses both the SERP I and SERP II plan costs that GHI claimed under the provisions of its MAC-related contracts. Accounting MethodologiesThe Medicare contracts require GHI to calculate SERP costs in accordance with the FAR and CAS 412 and 413. The FAR and the CAS require that the costs for nonqualified defined-benefit plans be measured under either the accrual method or the pay-as-you-go method. Under the accrual method, allowable costs are based on the annual contributions that the employer deposits into its trust fund. For nonqualified defined-benefit plans that are not funded through the use of a funding agency, costs are to be accounted for under the pay-as-you-go method. This method is based on the actual benefits paid to participants, which are comprised of lump-sum payments and annuity payments. Incurred Cost Proposal Audits At CMS’s request, Figliozzi & Company, P.C. (Figliozzi), Kearney & Company, P.C. (Kearney), and Davis Farr, LLP (Farr), performed audits of the ICPs that GHI submitted for CYs 2009 through 2016. The objectives of the Figliozzi, Kearney, and Farr ICP audits were to determine whether costs were allowable in accordance with the FAR, the U.S. Department of Health and Human Services Acquisition Regulation, and the CAS. For this audit, we relied on the Figliozzi, Kearney, and Farr ICP audit findings and recommendations when computing the allowable SERP costs discussed in this report. We incorporated the results of the Figliozzi, Kearney, and Farr ICP audits into our computations of the audited indirect cost rates, and ultimately the SERP costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable SERP costs, as well as the Figliozzi, Kearney, and Farr ICP audit reports, to determine the final indirect cost rates and the total allowable contract costs for GHI for CYs 2009 through 2016. The cognizant Contracting Officer will perform a final settlement with the contractor to determine the final indirect cost rates. These rates ultimately determine the final costs of each contract.

GHI, a subsidiary of EmblemHealth Services Company, LLC, administered Medicare operations under a Coordination of Benefits contract with CMS. During our audit period, GHI also performed Medicare work on the Medicare Secondary Payer Recovery and Benefit Coordination and Recovery contracts. GHI also performed work as a subcontractor on the Retiree Drug Subsidy contract. During our audit period, GHI had two defined-benefit pension plans: the GHI Local 153Pension Plan and the EHS Retirement Plan. This report addresses the Medicare segment pension assets for the EHS Retirement Plan for the period of January 1, 2015, through December 31, 2015. We are addressing the Medicare segment pension assets for the GHI Local 153 Pension Plan in a separate audit. Upon the curtailment of its pension plan, GHI identified Medicare’s share of the EHS Retirement Plan Medicare segment excess pension liabilities to be $778,811 as of December 31, 2015. We performed a prior pension segmentation audit of GHI (A-07-19-00561, July 25, 2019), which brought the EHS Retirement Plan Medicare segment pension assets to January 1, 2015. We recommended that GHI recognize $5,633,345 as the EHS Retirement Plan Medicare segment pension assets as of January 1, 2015.

GHI, a subsidiary of EmblemHealth Services Company, LLC, administered Medicare operations under a Coordination of Benefits contract with CMS. During our audit period, GHI also performed Medicare work on the Medicare Secondary Payer Recovery and Benefit Coordination and Recovery contracts. GHI also performed work as a subcontractor on the Retiree Drug Subsidy contract. During our audit period, GHI had two defined benefit pension plans: the Local 153 Plan and the EmblemHealth Services Company, LLC, Employees’ Retirement Plan. This report addresses the Medicare segment pension assets for the Local 153 Plan for the period of January 1, 2015, through August 31, 2016. We are addressing the Medicare segment pension assets for the EmblemHealth Services Company, LLC, Employees’ Retirement Plan in a separate audit. Upon the curtailment of its pension plan, GHI identified Medicare’s share of the Local 153 Plan Medicare segment excess pension liabilities to be $6,131,699 as of August 31, 2016. We performed a prior pension segmentation audit of GHI (A-07-19-00562, July 25, 2019), which brought the Local 153 Plan Medicare segment pension assets to January 1, 2015. We recommended that GHI recognize $31,821,914 as the Local 153 Plan Medicare segment pension assets as of January 1, 2015.

Medicare Parts A and B cover eligible home health services under a prospective payment system (PPS). The PPS covers part-time or intermittent skilled nursing care and home health aide visits, therapy (physical, occupational, and speech-language pathology), medical social services, and medical supplies. Under the home health PPS, CMS pays HHAs for each 60-day episode of care that a beneficiary receives.In prior years, our audits at other HHAs identified findings in the following areas:• beneficiaries did not always meet the definition of “confined to the home,”• beneficiaries were not always in need of skilled services,• HHAs did not always submit OASIS data in a timely fashion, and• services were not always adequately documented.For the purposes of this report, we refer to these areas of incorrect billing as “risk areas.”Our objective was to determine whether Mercy complied with Medicare requirements for billing home health services on selected types of claims.

The objective of our audit was to determine whether the University of North Georgia (North Georgia) had controls to ensure that it reported complete and accurate campus crime statistics under the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act (Clery Act). North Georgia did not have effective controls to ensure that it reported complete and accurate Clery Act crime statistics. North Georgia had processes for activities related to crime reporting under the Clery Act, including identifying its Clery Act geography, requesting crime statistics from local law enforcement agencies, identifying campus security authorities (CSAs) and collecting crime reports from CSAs, processing and compiling the crime information, and reporting the annual Clery Act crime statistics by the reporting deadline. However, these processes did not provide reasonable assurance that the reported crime statistics would be complete and accurate. Additionally, NorthGeorgia did not follow all applicable Clery Act requirements and guidance, which, if followed, would help support the completeness and accuracy of the reported crime statistics. For example, North Georgia did not properly identify its CSAs or follow all applicable requirements for identifying its Clery Act geography3 and requesting crime. statistics from local law enforcement.