OIG audit to determine if Medicare overpaid acute care hospitals

The Office of Inspector General (OIG) at the U.S. Department of Health and Human Services (HHS) recently announced that it will conduct another audit to determine if acute care hospitals are being overpaid by Medicare.

Results of previous audit

The second round of audits follows up on a September 2020 audit that found that Medicare overpaid acute care hospitals $51.6 million from 2013 to 2016 for outpatient services to beneficiaries who were inpatients at other facilities such as long-term care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities and critical-access hospitals.

The Detroit metro area has three acute care hospitals.

In a press statement, the OIG said: “that none of the $51.6 million we reviewed, representing 129,792 claims, should have been paid because the inpatient facilities were responsible for payments.” It added that Medicare beneficiaries also had to pay $14.3 million in “unnecessary deductibles and coinsurance” for the outpatient services.

The OIG also said the overpayments to acute care hospitals occurred because the common working file (CWF) edits that should’ve flagged overpayments weren’t working properly.

A news report stated that “acute care hospitals are not supposed to be paid by Medicare for outpatient services provided at another inpatient facility.”

OIG statement about regulations

The OIG says that “federal regulations state … Medicare does not pay any provider other than the inpatient hospital for services provided to the beneficiary while the beneficiary is an inpatient of the hospital.” It says that the inpatient hospital must furnish all covered services to the beneficiary directly, or under an agreement with the other facility and that Medicare will then reimburse the inpatient facility at its inpatient rates.

The new audit will also determine if the CWF edits have been fixed and are now working properly.