OIG hospital audits reveal $2.26M in Medicare overpayments

Southcoast Hospitals Group received $1,106,581 in Medicare overpayments in 2010 and 2011 because the three-hospital system in Massachusetts lacked adequate controls to prevent incorrect billings, according to an Office of Inspector General audit report released yesterday.

As a result, the Southcoast failed to comply with Medicare billing requirements for 240 of the 338 claims reviewed--with 165 incorrect inpatient claims and 75 incorrectly billed outpatient claims.

In response, Southcoast added more case management staff, offered additional education and hired a consultant to help determine inpatient versus outpatient status. While the system agreed with most of the audit findings, it maintained 41 inpatient short stay claims met the medical necessity requirements for inpatient admission and plans to fully appeal the claims, according to the audit.

Similarly, another OIG audit showed that because of inadequate controls, 310-bed St. Joseph Regional Health Center in Texas failed to comply with Medicare billing requirements for 117 inpatient claims and 15 outpatient claims of the 242 reviewed claims, leading to $638,960 in overpayments for 2009 and 2010.

St. Joseph disagreed with OIG findings that 79 inpatient short stay claims should have been billed as outpatient, stating "the physician determination and criteria for admission are fully supported by the medical record and that there is a demonstrated medical necessity for each claim submission."

And yesterday, a Tulane Medical Center's OIG audit revealed the 354-bed New Orleans hospital received $523,928 in Medicare overpayments in 2010 and 2011. With inadequate controls, the hospital improperly billed 61 claims of the 125 claims reviewed.

However, Tulane disagreed with 20 short stay inpatient claims the OIG said should have billed as outpatient as well as with 26 outpatient claims for Lupron injections that OIG said were billed using an incorrect Healthcare Common Procedure Coding System code.

Despite "fundamentally" disagreeing with two-thirds of the OIG findings, the New Orleans hospital said it takes all potential errors seriously and will enhance its improvement efforts, especially around patient status.

For more:
- read the Southcoast report (.pdf)
- check out the St. Joseph report (.pdf)
- read the Tulane report (.pdf)