OIG: Medicare overpays $2.8M to two hospitals and Wisconsin

The Office of Inspector General released three new reports this week that show two hospitals failed to fully comply with Medicare billing requirements and Wisconsin claimed Medicaid reimbursement for unallowable high-dollar inpatient services.

In the first report, the OIG says Community Regional Medical Center in Fresno, Calif., received $1.1 million in overpayments for 230 inpatient and outpatient claims with dates of service from 2008 to 2012.

Investigators conclude the overpayments occurred because the hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk area that contained errors. The hospital has agreed to refund to the Medicare contractor $1,075,310, consisting of $919,033 in overpayments for the incorrectly billed inpatient claims and $156,277 in overpayments for the incorrectly billed outpatient claims. In addition, it has submitted the steps it has taken to ensure full compliance with Medicare requirements.

The second report states Boston Medical Center, a 496-bed academic medical center located in the South End of Boston, owes $612,000 in overpayments for 326 inpatient and outpatient claims for calendar years 2009-2011. Investigators blame the errors on failure to have adequate controls in place to prevent the incorrect billing of Medicare claims and not understanding Medicare billing requirements within the selected risk areas that contained errors.

The OIG conducted the investigation as a follow up to a previous review, which revealed incorrectly billed claims for Medicare Part A inpatient short stays and part B outpatient evaluation and management services billed with cystoscopy procedures for 2009 and 2010. The most recent review focused on 60 inpatient short-stay claims and expanded the review of outpatient E.M services.

Boston Medical refunded to Medicare the $18,894 in overpayments for 272 incorrectly billed outpatient claims and has improved its controls and audit processes. But the hospital has hired a third-party vendor to review the OIG's claims of $593,160 in overpayments for 54 incorrectly billed inpatient claims. The hospital will rely on the vendor to determine whether it can appeal any claims before refunding money. Meanwhile Boston Medical has made improvements to comply with Medicare.

In its third report, the OIG states the Wisconsin Department of Health Services claimed approximately $1.1 million in federal reimbursement for unallowable high-dollar payments it made to hospitals for inpatient services for 84 claims with dates of service from Jan. 1, 2006 through Dec. 31, 2009. Inspectors say the overpayments occurred because hospitals reported incorrect charges. But hospital officials attributed the incorrect charges to data entry errors.

The state agency will recover the overpayments by reducing future claim payments to the providers that received overpayments. It will also use the report results to provide education activities regarding proper data entry to improve claim accuracy.

To learn more:
- see the summary and full report (.pdf) for Community Regional Center
- read the summary and full report (.pdf) for Boston Medical
- here's the summary and full report (.pdf) for the Wisconsin Department of Health Services

Related Articles:
Medicare RAC activity heats up
RACs reclaim $1.37B in overpayments as criticism mounts
CMS lowers RAC medical record request limits
RAC denials a threat to hospitals and patients
CMS should drop belated attempts to collect overpayments