Cedars-Sinai must pay back $2.24M in Medicare overpayments

Cedars-Sinai Medical Center in Los Angeles overbilled Medicare by more than $2.24 million over a three-and-a-half period, according to a U.S. Department of Health & Human Services Office of Inspector General report.

The OIG reviewed 490 inpatient and outpatient claims the Centers for Medicare & Medicaid Services paid to Cedars-Sinai between Jan. 1, 2008, and June 30, 2011--a sample size of only 0.07 percent of claims CMS actually paid to Cedars-Sinai during that period, according to Becker's Hospital Review. Most of the errors came on the inpatient side, totaling $1.87 million of the Medicare overpayments, the article noted.

"These errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors," the OIG said.

In its report, the OIG recommended and the hospital agreed to:

• refund to the Medicare contractor $2,244,649, consisting of $1,869,455 in overpayments for the incorrectly billed inpatient claims and $375,194 in overpayments for the incorrectly billed outpatient claims

• strengthen controls to ensure full compliance with Medicare requirements

The findings come in the wake of news that during the first six months of fiscal 2013, Medicare recovery auditors (RAC) collected $1.37 billion in overpayments and returned $65.4 million in underpayments, according to new data from CMS.

So far, RACs already recouped more than half of the total $2.29 billion in Medicare overpayments collected last year. In the first half of 2013, the recovery auditors have given back more than half of last year's $1.09 billion in total underpayments.

The Cedars-Sinai evaluation is one of a series of hospital compliance reviews. The OIG report said  for calendar year 2011, Medicare paid hospitals $151 billion, which represented 45 percent of all fee-for-service payments; therefore, the OIG plans to continue to provide oversight of Medicare payments to hospitals.

To learn more:
- check out the OIG report (.pdf)
- read the article