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

Policy & Regulation News

Hospital Claims $173,000 in Medicare Overpayments

By Stephanie Reardon

Hospital did not fully comply with Medicare requirements for billing inpatient and outpatient services.

- The Department of Health and Human Service (HHS) Office of Inspector General (OIG) released the results of its audit on Utah Valley Regional Medical Center (the Hospital). The audit was completed to determine if the Hospital complied with Medicare requirements for billing inpatient and outpatient services. During this audit, it was discovered that the Hospital did not fully comply with requirements for billing inpatient and outpatient services which resulted in approximately $173,000 in Medicare overpayments.

“We focused our review on the risk areas that we had identified as a result of previous OIG reviews at other hospitals,” the audit states. “We evaluated compliance with selected billing requirements but did not subject claims to focused medical review to determine whether the services were medically necessary.”

The Centers for Medicare & Medicaid Services (CMS) pays inpatient hospital costs at specific rates for patient discharges. The rates vary based on the severity of the patient’s diagnosis and the diagnosis-related group (DRG). The payment is intended to cover all inpatient costs for the beneficiary’s stay.

CMS implemented an outpatient prospective payment system (OPPS), which is effective for services provided on or after August 1, 2000, for outpatient services. Under this, CMS pays for hospital outpatient services on a rate-per-service basis that varies according to the assigned ambulatory payment classification.

The Hospital is an acute care facility which is located in Provo, Utah. It holds approximately 367 beds. During calendar years (CYs) 2010 and 2011, Medicare paid approximately $101 million for 7,559 inpatient and 44,602 outpatient claims.

However, it was discovered that out of 232 claims 183 complied with Medicare billing requirements, but 49 did not. The 49 non-compliant Medicare resulted in $173,132 in overpayments for CYs 2010 and 2011, and CYs 2009 and 2012.

Billing errors were found in 37 inpatient claims which resulted in $117,665 worth of overpayments. Billing errors were also found in 12 outpatient claims which resulted in $55,467 worth of overpayments.

“These errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors,” the audit states.

The OIG recommends that the Hospital refund Medicare $173,132 in overpayments and strengthen compliance controls to ensure full compliance with Medicare requirements.

In written comments the Hospital agreed with the OIG’s recommendations. The Hospital indicated in written comments that it had already refunded Medicare the $173,132 in overpayments.
“Utah Valley Regional Medical Center takes the OIG audit findings and recommendations seriously as we continue to strive to be compliant in all coding and billing requirements,” the Hospital writes. “We continue to develop our internal controls, which includes providing additional education to coding and billing staff and creating additional edits as part of our own internal corrective plan.”



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