Hospital hit with $341k overpayment for flawed billing, coding practices

Sure, Medicare’s maze of billing and coding requirements are difficult to understand. And sometimes your software vendor doesn’t do a good job at helping you navigate all the twists and turns. But those excuses won’t float when it comes to sending inaccurate claims to Medicare, as Weymouth, Mass.-based South Shore Hospital recently learned.

The OIG slapped the 318‑bed acute care hospital with more than $314,000 in overpayments after an audit uncovered a troubling error rate among South Shore’s inpatient and outpatient claims.  

Among 87 sampled inpatient claims, the OIG found 35 (40 percent) with billing or coding errors, resulting in overpayments totaling $167,894. As one example, the OIG said the hospital incorrectly billed Medicare for same‑day readmissions that should have been combined with the initial hospital stays. This accounted for 22 errors totaling $103,085 in overpayments. Other errors were due to missing medical records, incomplete physician orders and incorrect DRGs.

Among 302 sampled outpatient claims, the OIG uncovered errors among 214 (71 percent), which resulted in overpayments totaling $173,139. The causes ranged from wrong HCPCS codes, consolidated billing errors related to SNF patients and inaccurate surgical units of service.

In written comments to the OIG, Tessa Lucey, South Shore's compliance officer explained that hospital's staff of credentialed coders misunderstood the Medicare coding requirements and that a software upgrade error dropped resulted in the surgical-code errors. s 

But ultimately, the hospital was on the hook. In its report, the OIG recommended that the hospital refund Medicare contractor a total of $341,033 for the errors and to take measures to strengthen its compliance with Medicare requirements. 

Lucey concurred with the OIG’s recommendations and said her organization has implemented stronger internal controls and will continue to monitor the audited areas. She added that the hospital has begun the process of refunding the overpayments to its Medicare contractor. 

For more information:
- Read the OIG's audit report

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