News: Ohio hospital system received $4.4 million in overpayments, OIG audit finds
A Medicare hospital provider compliance audit performed by the Office of Inspector General (OIG) found that the Lake Hospital System in Ohio did not fully comply with Medicare billing requirements for 51 of 100 inpatient and outpatient claims in the review. This failure to comply resulted in overpayments of $862,429 for those claims during the years 2017 and 2018. Based on the sample results, the OIG estimates that the hospital system received a total of approximately $4.4 million in overpayments for the audit period.
The audit found that four of the 90 selected inpatient claims, Lake Hospital system submitted claims to Medicare that were incorrectly coded. Specifically, certain procedure or diagnosis codes were not supported by the medical records. Three of the four claims resulted in overpayments; the remaining claim resulted in an underpayment. The hospital did not provide a cause for the errors, according to the OIG audit, because “officials generally contended that these claims met Medicare requirements.” Due to these errors, the hospital received net overpayments of $2,373.
Secondly, the audit found that for nine of the 90 inpatient claims, the hospital incorrectly billed Medicare Part A for beneficiary stays that did not meet Medicare criteria for inpatient status and should have been billed as outpatient or outpatient with observation services. The OIG notes that the medical records did not support the necessity for inpatient hospital services. Again, the hospital did not provide a cause for the errors because officials generally contented that these claims met Medicare requirements. As a result of this error, Lake Hospital System received overpayments of $61,523.
Finally, for 38 of the 90 selected inpatient claims, Lake Hospital System incorrectly billed for inpatient rehabilitation facility services. Due to these errors, the hospital received overpayments of $798, 533.
The OIG recommends that Lake Hospital System refund the portion of the $4.4 million in overpayments for the audit period for claims that are incorrectly billed that are within the reopening period. The OIG also recommends the hospital exercise reasonable diligence to identify, report, and return any additional similar overpayments received outside of the audit period, as well as strengthen controls to ensure full compliance with Medicare requirements.
The hospital disagreed with the “vast majority” of the OIG findings and did not concur with the recommendation to refund the estimated overpayments. Lake Hospital System did, however, agree to voluntarily refund the overpayment of 14 of the claims with which it did agree.