Medicare Compliance Audit Finds Orlando Health Overbilled $1.45M
- In July 2014, the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) released the results of a Medicare compliance audit of Orlando Health. Conducted between January 1, 2011 and June 30, 2012, the report found that Orlando Health overbilled more than $1.45 million in Medicare claims during that time.
The organization in question is a 1,788-bed network of hospitals based in Orlando, Florida. During the audit period, the Centers for Medicare and Medicaid Services (CMS) paid out approximately $332 million for 34,676 inpatients and 166,694 outpatient claims for services provided to beneficiaries. The audit only examined a random selection of 218 inpatient claims that total payments of $2,075,152.
Of the 218 inpatient claims examined, 143 complied with Medicare billing requirements. The other 75 resulted in net overpayments of $462,142. Based on the sample, the report extrapolates that the Hospital received overpayments of at least $1,453,243.
The errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas. The most common error included mischaracterizing patients as inpatients when they did not meet Medicare requirements.
The company is contesting the amount of money it owes and believes it should be closer to $620,000. It questions the methodology and the statistical validity of the amount estimated and believes it does not take into account potential Medicare Part B reimbursement.
In an interview last week with the Orlando Sentinel, Tom Yoesle, Orlando Health’s chief operating officer for revenue management, spoke more in-depth about the audit and the areas where the organization fell short. He admits that it was an honest misinterpretation of requirements and complex rules.
However, Yoesle believes that there is a risk the final cost could end up being paid by the patients themselves in the form of new bills for services received up to four years ago on accounts already closed.
This would happen because of the process. As Yoesle describes, it is not as simple as mailing a check and moving on. First, Orlando Health will pay back the final sum. Then it could resubmit the claims properly and Medicare may reimburse the hospital a second time, but for the correct, smaller amount. The balance could then be sought by the hospital from the patients per Medicare regulations.
“These claims could have been ‘paid in full’ by First Coast [the hospital's Medicare financial intermediary] three years ago,” Yoesle said. “And if CMS reopens those claims and makes them active again, and we’re allowed to rebill them again as outpatients, these beneficiaries and their families will receive a [new] explanation of benefits from First Coast and CMS and Medicare for a stay in our facility that was potentially three years ago. Could that change the patients’, the beneficiaries’, financial responsibility? It could. It certainly could.”
Despite contesting the findings, the company is still examining and revamping its processes to ensure it meets current Medicare compliance and avoids the characterization errors that led to the overcharging.
