OIG: Medicare Part B overpaid critical access hospitals and docs for same services

Medicare paid critical access hospitals and providers more than $1 million for duplicate claims in 2019, according to a federal watchdog that called for reforms to detect such errors.

The Department of Health and Human Services’ Office of Inspector General’s (OIG's) report, released Tuesday, called for the Centers for Medicare & Medicaid Services (CMS) to create post-payment reviews of claims.

“If CMS developed alternative means to detect duplicate professional service payments, CMS could recoup payments from providers, and beneficiaries would be reimbursed for any overcharges,” OIG said in the report. 

The watchdog audited 40,026 Medicare Part B claims, with half submitted by critical access hospitals and the rest submitted by healthcare practitioners for the same services provided to beneficiaries on the same dates of service. OIG studied claims from March 1, 2018, to Feb. 28, 2021. However, the audit found that only one of the claims complied with federal requirements.

Medicare administrator contractors—private insurers that process medical claims for a certain region—made $907,438 in overpayments to providers, and beneficiaries were “held responsible for $281,321 more than they should have been,” the report said. 

CMS didn’t have a system to edit claims that can help prevent and detect any duplicate claims, OIG added.

A critical access hospital cannot bill Part B for any outpatient services delivered by a healthcare practitioner unless that provider reassigns the claim to the facility, which then bills Part B. However, OIG’s audit found that providers billed and got reimbursed for services they did perform but reassigned their billing rights to the critical access hospital. 

The hospitals were overpaid $331,448 for 12,156 claims for outpatient services performed by practitioners that didn’t reassign their billing rights to the facilities. 

In addition, the audit found practitioners got $575,990 for 7,857 claims even though the billing rights were reassigned to the hospitals.

Beneficiaries were incorrectly held responsible for $281,321 for Medicare cost-sharing obligations.

OIG wants CMS to create a new claim system that can perform edits or another alternative means to “prevent and detect overpayments for professional service payments,” the report said. It also called for Medicare administrator contractors to better educate critical access hospitals on their billing responsibilities and what to do when a practitioner doesn’t reassign their billing rights. 

CMS agreed with most of OIG’s recommendations, but it demurred on the one to develop new systems to prevent and detect overpayments. 

“CMS stated that additional action may not be appropriate at this time due to the low dollar amount of the errors,” OIG said. 

The audit report comes as experts have called for greater scrutiny of Medicare spending amid continuing financial pressures on the program. The Medicare Payment Advisory Commission, which advises Congress on Medicare matters, has recommended changes to the risk adjustment process for Medicare Advantage plans in order to curb overpayments in the growing program.