OIG audits: Poor hospital billing controls lead to $1M Medicare overpayments

Medicare overpaid Barnes-Jewish Hospital in St. Louis and Indiana University Health in Indianapolis more than a million dollars combined because the two healthcare organizations didn't have adequate controls to prevent billing errors, according to recent audits by the Office of Inspector General.

Although Barnes-Jewish Hospital did comply with billing requirements for 182 out of 240 claims that OIG reviewed, it didn't comply with 58 claims, resulting in $725,000 worth of Medicare overpayments from 2008 to 2011, OIG said in the report released yesterday. Twenty-four outpatient claims had billing errors regarding manufacturer credits for medical devices and excess charges, which cost Medicare $392,829. Thirty-four inpatient claims also had billing errors regarding excess charges and medical devices, as well as short stays and high-severity DRG codes, totaling $332,356 in overpayments. OIG said the hospital didn't have adequate controls to prevent the inaccurate billing.

The hospital president, Richard Liekweg, told the regional inspector general that Barnes-Jewish Hospital refunded the Medicare contract the money owed and that it strengthened internal controls. The hospital modified existing information systems to address admission orders that require physician signatures, acquired new coding software, developed coding education for staff and increased how often it conducts internal audits, Liekweg said.

In its review of Indiana University Health, OIG found the hospital generally complied with Medicare requirements in its review of 198 claims. However, the hospital didn't comply with 35 claims, leading to overpayments totaling $280,000 from October 2008 through September 2010. Fifteen inpatient claims regarding manufacturer credits for replaced medical devices and high-severity DRG codes resulted in $109,198 in overpayments. Twenty outpatient claims had billing errors regarding medical devices and surgeries, resulting in $170,795 in overpayments, according to the report.

Indiana University Health has since implemented additional quality checks for targeted internal reviews of error-prone codes, according to Kimberly Carter, revenue cycle system manager of quality and compliance.

The OIG audits are part of its hospital compliance initiative in which the agency reviews selected inpatient and outpatient claims to review the individual hospitals.

To learn more:
- see the OIG summary and report (.pdf) on Barnes-Jewish Hospital
- here's the OIG summary and report (.pdf) on Indiana University Health

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