Health system sues OIG over alleged Medicaid overpayments

Three Utah hospitals have filed suit against the Medicaid Office of the Inspector General over a demand to repay overpaid emergency room claims, reported the Salt Lake City Tribune.

The hospitals, Davis Hospital & Medical Center, Salt Lake Regional Medical Center and Jordan Valley Medical Center, are part of the Iasis Healthcare system. They claim in their federal lawsuit that the Medicaid OIG has no authority to demand repayments, which stem from payments made for care delivered in 2008 and 2009 and total $2.7 million.

The OIG rejected some of the claims because the ER visit did not lead to a Medicaid-approved diagnosis, or the cause of the visit was not listed as the leading diagnosis on claims forms.

Iasis officials said the hospitals followed billing protocols created by the Utah Department of Health, which administers the state's Medicaid program. In 2009, the department actually refused repayments offered by Iasis because it had issued inconsistent coding regulations to hospitals.

Franklin, Tenn.-based Iasis operates 18 hospitals in seven states, including four in Utah.

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