Hospitals retrain staff on Medicare compliance after OIG audits

Two more reports from the Office of Inspector General last week reveal that hospitals not understanding billing requirements led to Medicare overpayments at Bay Medical Center in Panama City, Fla., and Kent County Hospital in Warwick, R.I.

Bay Medical Center, for instance, received more than a quarter of a million dollars in overpayments "because the hospital did not have adequate controls to prevent incorrect billing of Medicare claims, and its staff did not fully understand Medicare billing requirements," the OIG said in its report summary released Thursday.

Although the Florida hospital did comply with 149 of the 197 inpatient and outpatient claims the OIG reviewed, it missed the mark on 43 inpatient claims and 5 outpatient claims, which had billing errors, totaling about $271,000 and $18,000, respectively. The errors included incorrect billing of discharges with subsequent readmissions, incorrect diagnosis-related group codes, missing admission orders and incorrect reporting on medical device credits, among other reported mistakes.

Since the audit, Bay Medical provided additional education to accounts payable regarding warranty credits for explanted devices, for coders regarding DRG and HCPC codes, and for case management personnel on inpatient admission criteria and proper documentation of patient discharge status. The hospital also developed a procedure to manually review claims that include blood clotting factors, CEO Steven Johnson wrote in a letter to the inspector general.

"Bay constantly strives to eliminate billing errors," Johnson said. "While Bay would have preferred that no errors were identified, we note that our error rate is extremely low for these types of claims that otherwise have been universally identified by DHHS/OIG as suspected of having high error rates."

OIG also found billings errors associated with DRG codes, as well as inpatient short stays and outpatient observation services at Kent County Hospital.

Although the Rhode Island hospital complied with 155 of the 171 claims OIG reviewed, the hospital didn't comply in 16 of the remaining claims, resulting in $27,000 in overpayments, according to the report summary released Thursday.

Since the audit, Kent County Hospital implemented additional processes to ensure appropriate physician orders are present, retrained case managers on admission criteria and reeducated coders on the calculation of observation billable hours, Senior Vice President of Finance Paul Beaudoin wrote in a letter to the inspector general.

"Kent County Memorial Hospital takes the OIG findings and recommendations very seriously and will continually strive to ensure the appropriate safeguards are in place to demonstrate Medicare billing compliance," Beaudoin said.

For more information:
- read the OIG summary and the report (.pdf) on Bay Medical Center
- here's the OIG summary and the report (.pdf) Kent County Hospital

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