OIG: Saint Thomas Hospital owes Medicare $1.09M in improper payments

Saint Thomas Hospital in Nashville, Tenn., improperly billed the Medicare program by $1.09 million, according to a report from the Office of Inspector General.

The OIG reviewed a sample size of 250 inpatient and outpatient claims the 541-bed facility billed to Medicare in 2009 and 2010. Of those claims, the regulatory agency found 44 were in error, resulting in overpayments of $293,359. Based on the sample results, the OIG estimates the hospital received overpayments of at least $1.09 million for the audit period.

The agency said in its report that the errors occurred because the hospital did not have adequate internal controls to prevent incorrect billing of Medicare claims within the selected risk areas.

Saint Thomas Hospital officials disagreed that it should refund all the money. They argued that some of the claims that it billed as inpatient should have been outpatient and the hospital should therefore be able to keep the difference between the inpatient and outpatient amounts. But the OIG stated in the report that it did not have enough information to calculate the difference in payment and called for the hospital to pay back the full amount.

Meanwhile, the OIG also found Rapid City (S.D.) Regional Hospital, a 368-bed regional health facility, overbilled the government for $256,789 in Medicare funds.

The agency reviewed 251 outpatient and inpatient claims submitted by Rapid City Regional Hospital to Medicare in 2010 and 2011. It found 66 outpatient billing errors, totaling overpayments of $187,984 and eight inpatient claim billing errors that resulted in overpayments of $68,805.

The OIG said the outpatient overpayments were made due to a combination of errors: The hospital's computerized pharmacy and charge systems were not programmed correctly for a drug; it did not have adequate controls related to the reporting of manufacturer credits for replaced medical devices, and human error.

The hospital agreed to repay the overpayments and told the agency it has taken steps to strengthen controls to ensure full compliance with Medicare billing requirements.

To learn more:
- read the OIG report concerning Saint Thomas Hospital (PDF)
- check out the OIG report on Rapid City Regional Hospital (PDF)

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