Healthcare News & Insights

Payback time: OIG audits uncover overpayments at 3 hospitals

The last thing any hospital administrator wants is to be audited by the Office of the Inspector General (OIG). Especially now that the Centers for Medicare & Medicaid Services on June 1st will launch the next leg of its Recovery Audit Prepayment Reviews — an aggressive program to deter overpayments due to fraud and errors.

From October 2011 through December 2011, Recovery Audit Contractors (RACs) identified and collected the largest amount of improper payments ever recovered in one quarter — $397.8 million.

And the crackdown on Medicare overpayments continues as more and more hospitals every day are being accused of overbilling Medicare.

Three recent audits by the OIG found Thomas Jefferson University Hospital in Philadelphia, St. Vincent’s Medical Center in Bridgeport, CT, and Carolinas Medical Center in North Carolina, all received overpayments.

1. Thomas Jefferson University Hospitals

The OIG audit of Thomas Jefferson University Hospitals found that the facility incorrectly billed for inpatient same-day readmissions and received $43,000 in overpayments.

According to the OIG report, the facility didn’t always bill same-day readmissions in accordance with federal requirements. In four of the 133 same-day readmissions selected for review, Jefferson incorrectly billed the second admission as a separate inpatient stay instead of a continuous stay based on the initial admission.

The OIG blamed the incorrect billing and subsequent overpayments on Jefferson not having adequate training to review same-day readmissions.

2. St. Vincent’s Medical Center

According to the OIG report, St. Vincent’s didn’t fully comply with Medicare billing requirements for selected inpatient and outpatient claims. Fourty-one claims had billing errors that resulted in overpayments totaling $284,773 for calendar years 2009 and 2010, investigators said. The overpayments occurred primarily because the facility didn’t have adequate controls in place to prevent incorrect billing of Medicare claims and didn’t fully understand Medicare billing requirements.

3. Carolinas Medical Center

The OIG found that the Carolinas Medical Center had errors in eight of the 73 brachytherapy (Iridium-192) Medicare claims the agency reviewed and received nearly $6,000 in overpayments. The medical center said the reason for the overpayments was inadvertent keying errors by new coding staff, not a lack of training.

An overpayment, however, is just that — an overpayment. Whether it was intentional overbilling or an error, Medicare is due its money back. And an innocent misinterpretation of Medicare rules won’t get a facility out of a payback.

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