Poor oversight of Medicare billing, coding costs hospital $341,000

Sure, Medicare’s maze of billing and coding requirements is difficult to understand. And sometimes your software vendor doesn’t quite keep up with all the twists and turns. But those excuses won’t float when it comes to sending inaccurate claims to CMS, as Weymouth, Mass.-based South Shore Hospital recently learned. 

The OIG recently slapped the 318‑bed acute care hospital with $314,000 in overpayments after an audit uncovered a troubling error rate among South Shore’s inpatient and outpatient claims.   

Of 87 sampled inpatient claims, the OIG found 35 (40 percent) with billing or coding errors, which resulted in overpayments totaling $167,894. 

As one example, the OIG said the hospital incorrectly billed Medicare for same‑day readmissions that should have been combined with the initial hospital stays. This accounted for 22 errors totaling $103,085 in overpayments. Other errors were due to missing medical records,  incomplete physician orders, and using the wrong DRGs. 

Among 302 sampled outpatient claims, the OIG uncovered errors in 214 (71 percent), which resulted in overpayments totaling $173,139. Reasons for the errors ranged from using the wrong HCPCS codes, consolidated billing errors related to SNF patients and using incorrect numbers of surgical units of service. 

South Shore execs explained to the OIG that its staff of credentialed coders “misunderstood the Medicare coding requirements” and said the “a billing software upgrade had removed a computerized edit for surgical codes billed with multiple service units,” the OIG said. 

But ultimately, the hospital is the one on the hook. In its report, the OIG recommended that the hospital refund Medicare contractor a total of $341,033 for the errors and to take measures to strengthen its compliance with Medicare requirements. 

In written comments to the draft report, South Shore’s compliance officer, Tessa Lucey, concurred with the OIG’s recommendations, and said it has implemented stronger internal controls and will continue to monitor the audited areas. It also stated that it has begun the process of refunding the overpayments to the Medicare contractor.

 - see the OIG audit report (.pdf)