From the Report:
The Centers for Medicare & Medicaid Services (CMS) pays inpatient hospital costs at predetermined rates for patient discharges. The rates vary according to the diagnosis-related group (DRG) to which a beneficiary's stay is assigned and the severity level of the patient's diagnosis. The DRG payment is, with certain exceptions, intended to be payment in full to the hospital for all inpatient costs associated with the beneficiary's stay. CMS pays for hospital outpatient services on a rate-per-service basis that varies according to the assigned ambulatory payment classification.
The Hospital, which is part of the Greenville Health System, is a 746-bed hospital located in Greenville, South Carolina. According to CMS's National Claims History data, Medicare paid the Hospital approximately $370 million for 21,476 inpatient and 223,623 outpatient claims paid from January 2013 through September 2014 (audit period).
Our audit covered $17,264,798 in Medicare payments to the Hospital for 1,998 claims that were potentially at risk for billing errors. We selected for review a stratified random sample of 281 paid claims with payments totaling $3,562,100. These claims consisted of 125 inpatient and 156 outpatient claims with claims paid dates during the audit period.
WHAT WE FOUND
The Hospital complied with Medicare billing requirements for 257 ofthe 281 inpatient and outpatient claims that we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 24 claims, resulting in overpayments of $83,217 for the audit period. Specifically, 4 inpatient claims had billing errors resulting in overpayments of $24,171, and 20 outpatient claims had billing errors resulting in overpayments of$59,046.
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.
WHAT WE RECOMMEND
We recommend that the Hospital:
• refund to the Medicare program $83,217 consisting of $24,171 in overpayments for incorrectly billed inpatient claims and $59,046 in overpayments for incorrectly billed outpatient claims for the audit period, and
• strengthen controls to ensure full compliance with Medicare requirements.