Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

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Billing Errors Lead to $1.7 Million in Medicare Overpayments

By Ryan Mcaskill

Hackensack University Medical Center received overpayments in a sampling of 62 claims during an 18-month period.

- The Department of Health and Human Services Office of Inspector General (OIG), released its Medicare compliance review of Hackensack University Medical Center. The review was conducted between April 1, 2011 and September 30, 2012. During this time it was discovered that the center received overpayments of at least $1.7 million over that time frame.

The review is part of a series of hospital compliance reviews for organizations that have had claims flagged. Using computer matching, data mining and other data analysis, the OIG identified claims that were considered at risk for noncompliance with Medicare billing requirements. During the calendar year of 2012, Medicare paid hospitals $148 billion, which means proper oversight is needed.

The Hackensack University Medical Center is a 775-bed acute care teaching hospital located in New Jersey. During the audit period, Medicare paid approximately $376 million for 22,385 inpatient and 159,420 outpatient claims for services provided to beneficiaries. The audit covered $7,570,827 in Medicare payments for 1,553 claims that were potentially at risk. A random selection of 200 of these claims (45 inpatient and 155 outpatient) with payments totaling $1,498,349, were examined.

It was discovered that the hospital complied with 138 of the 200 claims that were reviewed, but the remaining 62 claims had flaws that resulted in $351,580 in overpayments. More specifically, 26 inpatient claims contained billing errors for $248,179 in overpayments and 36 outpatient claims has billing errors, resulting in overpayments of $103,401. These errors are chalked up to inadequate controls to prevent incorrect billing of medicare claims. Extrapolating the information, it is estimated that the Hospital received overpayments of $1,719,632.

The OIG recommends that the hospital refund the $1,719,632 in estimated overpayments and work to strengthen controls to ensure full compliance with Medicare requirements.

The hospital responded to the report and generally concurred with the findings but did disagree with the determinations for 4 of the 62 sampled items that were not in compliance. Specifically, the Hospital indicated that three inpatient claims met the medical necessity for inpatient admission and the one disputed outpatient claim did not require a physician’s order for observation services to be provided.

“The Hospital also stated that the error rate of our sample of inpatient short stays is not representative of the Hospital’s overall compliance for these stays,” the report reads. “In addition, the Hospital disagreed with the statement in our draft report that it did not have a case worker onsite to oversee final patient discharge procedures, and stated that the lack of oversight was specific to the Hospital’s operating room and post anesthesia care unit.”

The OIG reviewed the comments from the hospital officials and is unmoved in its findings.

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