CMS fails to collect $664M in outlier overpayments

The Office of the Inspector General recommends the Centers for Medicare & Medicaid Services reconcile hundreds of millions of dollars in outstanding, outlier payments and standardize a system for reconciling such payments moving forward, Bloomberg BNA reported.

Altogether, the OIG report concluded there are 292 outlier cost reports with providers that need to be settled, with 13 others that did not require a settlement. Each outstanding claim is worth a minimum of $400,000 and $664 million in total. The claims cover 2005 through 2010.

In 2001, CMS projected that outlier payments make up about 5.1 percent of all payments, but between fiscal 1998 and 2002, it overpaid about $9 billion more than its original projections, according to the report. The agency issued new regulations to address some hospitals gaming outlier payments in 2003 but did not have the capacity to perform the reconciliations itself and bid it out to contracting auditors.

"As of the end of our fieldwork, CMS had not developed and implemented an automated system to recalculate outlier claims," the OIG report states. The agency recommended doing so to reconcile the claims more quickly.

For more:
- read the Bloomberg BNA article
- here's the OIG report (.pdf)

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