OIG: Acute care hospitals owe Medicare $51.6M, CMS agrees to provider clawbacks

money
Medicare overpaid acute care hospitals by $51.6 million, according to an OIG audit.

A new government report finds that Medicare improperly paid acute care hospitals for outpatient services they provided to patients who were inpatients at other facilities. And now Medicare wants the money back.

The Centers for Medicare and Medicaid Services has agreed to claw back the $51.6 million and require hospitals to refund patient copays and deductibles.

The Department of Health and Human Services Office of Inspector General audited (PDF) Medicare payments made between Jan. 1, 2013, and Aug. 31, 2016, and found that in that window CMS made $51.6 million in improper payments to hospitals for outpatient services provided to patients who were inpatients at long-term care facilities, critical access hospitals, inpatient rehabilitation facilities and inpatient psychiatric facilities. 

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

Medicare typically would not pay an acute care hospital for outpatient treatments for a patient who is an inpatient at a different facility, according to the OIG, and instead the services should be rendered through an agreement between the two facilities, with payments going to the inpatient provider.  

RELATED: Abuse in nursing homes often goes unreported to police, despite federal law, OIG audit finds 

In addition, Medicare beneficiaries were responsible for $14.4 million in coinsurance and unnecessary deductibles paid to the acute care hospitals, the OIG found. 

"Medicare overpaid the acute care hospitals because the system edits that should have prevented or detected the overpayments were not working properly," the OIG concluded

"If the system edits had been working properly since 2006, Medicare could have saved almost $100 million, and beneficiaries could have saved $28.9 million in deductibles and coinsurance that may have been incorrectly collected from them or someone on their behalf." 

RELATED: Mount Sinai overbilled Medicare by nearly $42M, according to OIG audit 

OIG made three recommendations to CMS to resolve this issue: 

  1. Recover the $51.6 million in inappropriate payments.
  2. Have the acute care hospitals refund the patients' $14.4 million in coinsurance and deductibles.
  3. Identify improper payments outside of the audit window, and recover those as well.

CMS has agreed to these recommendations, OIG said. 

OIG conducted the audit as previous investigations showed Medicare made inappropriate payments for outpatient services for people who were inpatients at acute care hospitals, and the organization wanted to see whether the trend extended to other types of facilities. 

Suggested Articles

An estimated 73 million Americans with commercial health insurance face limited choices, according to a new American Medical Association study.

Absent adequate reimbursement for time spent on complex patient care, specialists are finding it harder to sustain their practices.

More than a year after Jonathan Bush stepped down as CEO of Athenahealth, he has landed a new gig as executive chairman of Firefly Health.