The Centers for Medicare & Medicaid Services (CMS) hasn’t done enough to recoup Medicare overpayments to hospitals and wants the agency to follow key recommendations, a federal watchdog found.
The Department of Health and Human Services’ Office of Inspector General (OIG) did an update on its previous 12 hospital compliance audits. The watchdog's report, released Thursday, couldn’t verify that the agency had fully recouped Medicare overpayments.
“CMS has said that it does not have enough resources or staff available to centrally track every issue or error identified in our reports,” the report said. “If CMS used our provider-specific audit reports, it could improve Medicare program oversight by focusing on services at high risk for improper payment.”
The watchdog reviewed prior audits of 12 hospitals from 2016 through 2018 that identified 387 improperly paid Medicare claims totaling $82 million in overpayments.
Of the 387 claims, 333 were related to inpatient services and 54 were outpatient claims. Hospitals disagreed with the findings, appealing 223 out of the 333 inpatient overpayment claims and 6 of the 54 outpatient ones.
The most common type of overpayment was linked to incorrectly billed inpatient rehabilitation facilities, with 60% of errors. Hospitals also incorrectly billed Medicare Part A for 71 stays that didn’t meet Medicare’s criteria.
OIG recommended to CMS that the 12 hospitals repay the funds; however, since the last audit, CMS has “provided us with insufficient information; therefore, we could not identify the actions CMS had taken to ensure our recommendations were implemented,” the report said.
The agency, for instance, did not provide information on the status of appeals hospitals levied against OIG’s overpayment findings. CMS didn’t provide information on the reason for the appeal or status of the action.
“CMS stated that, beyond checking the status in its system of record, further communication from CMS to an appellant during the appeals process would have been inappropriate,” OIG wrote. “CMS further indicated that any actions that take place after the appeals process has concluded would be handled as part of debt collection and oversight.”
OIG also recommended that the hospitals follow CMS’ 60-day rule, which requires facilities to repay any overpayments 60 days after they are identified.
CMS requested hospitals attest that no claims were submitted in error “or that they identified and were returning applicable overpayments to the [Medicare Administrative Contractor] and provide supporting documentation,” the report said.
OIG called on the agency to improve its internal controls and require MACs to report more when hospital appeals are pending.
If the agency doesn’t fully follow the recommendations, it risks “not capturing all overpayments identified by the hospitals in response to our 60-day rule recommendation,” the watchdog added.
Ten of the 12 hospitals agreed to strengthen their internal controls to avoid payment errors, and the remaining two have delayed responding to OIG’s recommendations until the appeals process is completed.
CMS concurred with some of OIG’s newest recommendations to improve tracking and responding to the status of overpayment claims but did not concur with a recommendation to consider the results of this audit in future risk assessment processes. The reason is the agency relies on a “larger picture of provider activity” when considering any policy changes.
The agency did not immediately return a request for comment.