Healthcare News & Insights

2 hospitals required by OIG to refund Medicare overpayments

The words “Medicare overpayment” can make any hospital executive cringe. Reason: They know they will either have to refund the overpayment, which is often a large sum of money, or they’re going to have to invest the time and effort it takes to go through the appeal process. Well, two hospital are facing that dilemma.

158532063Recently, Community Regional Medical Center, in Fresno, CA, and Boston Medical Center, in Massachusetts, were both cited with failure to fully comply with Medicare billing requirements. The Office of the Inspector General  (OIG) issued reports on both hospitals.

Community Regional Medical Center

In the report on Community Regional, the OIG said that while the hospital complied with Medicare billing requirements for 71 of the 301 inpatient and outpatient claims reviewed, it didn’t for the remaining 143 inpatient and 87 outpatient claims. According to the OIG, those claims contained billing errors that totaled $1.1 million in overpayments.

The OIG went on to report that the errors were a result of the hospital not having adequate controls in place to prevent billing mistakes on Medicare claims within the selected risk areas.

The OIG recommended that Community General refund $1,075,310 to the Medicare contractor and strengthen its controls to ensure 100% Medicare billing compliance.

In this case, the hospital mostly agreed with the OIG’s findings and offered up an action plan that addresses the billing issues.

Boston Medical Center

Boston Medical Center, on the other hand, didn’t see eye to eye with the OIG’s results.

According to the OIG’s report, 431 inpatient and outpatient claims were reviewed and Boston Medical Center complied with Medicare billing requirements for 105 of them. As for the other 326, the OIG said the facility didn’t fully comply and the resulting overpayments totaled $612,000.

Just like Community General, the OIG pointed to inadequate controls to prevent billing errors as the cause of Boston’s overpayments. However, the OIG added that the facility also didn’t fully understand Medicare billing requirements related to inpatient short stays and outpatient E/M services with cystoscopy procedures, which were also responsible for the billing errors.

The OIG recommended that Boston Medical Center:
  • refund to the Medicare contractor $612,063 ($593,169 for the incorrectly billed inpatient claims and $18,894 for the incorrectly billed outpatient claims), and
  • strengthen its controls to ensure full compliance with Medicare billing requirements.

Boston Medical agreed with the OIG’s  findings and recommendations for the incorrectly billed outpatient E/M services. It noted in a letter to the OIG that it refunded the full amount to the Medicare contractor and has improved controls and strengthened audit processes related to the services in question.

However, in regards to the inpatient claims, the facility noted it’s having a third-party vendor review them. After the review, the hospital will make its final decision on which claims it’ll refund to the Medicare contractor and which claims it’ll appeal. But the facility did re-educate the staff in regards to when E/M services may be billed on the same day as a cystoscopy procedure.

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