Quality Health Plan
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Scenario
Quality Health Plan (QHP) is a health insurance company operating in the Northeastern United States. A team of investigators was tasked to analyze claims submitted by health care providers to the insurance company and report unusual patterns or incidence of fraud. The investigators found many instances in which policy holders listed their married children under their insurance policy. The policy stated that policy holders could list only unmarried children under age 18 or between ages 18 and 22 if they are in college. Additionally, investigators found that heart monitoring tests performed by a particular lab cost QHP an average of $2,000 more than those of other labs. There have been reports that employees were sharing passwords and were heard discussing confidential patient information. In other findings, $500,000 worth of claims relating to male medical procedures was submitted on behalf of females. Further, the investigators discovered many claims submitted on behalf of patients who were not members of the plan. A whistle-blower had hinted that the head of the internal control department owned part of a major lab in the area. QHP did not follow up. QHP had already settled all the invalid claims in compliance with the 90-day payment agreement.
Write a memo to the CEO of QHP, Jim Hester, explaining the actual and possible losses to the health plan. What internal control measures will you recommend to QHP?
Include the following:
Control policies
Control activities
Control procedures
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Solution Summary
This solution assists in writing a memo about control policies, activities, and procedures.
Solution Preview
:
MEMORANDUM
TO: CEO OF QHP, JIM HESTER
FROM: YOU
RE: QUALITY HEALTH PLAN
DATE: JUNE 13, 2011
Mr. Hester: I am writing you in reference to some concerns that I have regarding the actual and possible losses to the Quality Health Plan due to the recent investigations. I recommend the following:
a. Implement a confidentiality clause in employee contracts. Include in said contract that if any employee discusses confidential patient information that they will be subject to immediate termination.
b. Implement a policy that any health member who includes a child on their policy must provide proof of birth. Further, if between the age of 18 and 22 must show proof of residency, proof of college admission. Further, any policy holder found to be violating the policy would be terminated effective immediately.
c. Implement a policy that all employee passwords be confidential. The only employees allowed to access employee passwords are the employee and one member of ...
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