CMS changes successfully reduced outpatient overpayments, OIG audit finds

Oversight changes CMS made in its system to identify patients in inpatient services successfully reduced overpayments made for outpatient services these beneficiaries received, the HHS Office of Inspector General said in an audit. 

From 2016 to 2021, the OIG said, Medicare inappropriately paid $39.3 million to post-acute hospitals for beneficiaries who were inpatients of other facilities. These types of facilities must provide all care during an inpatient stay themselves or arrange for outpatient care and include these services in its billing to Medicare. 

A previous audit from 2013 to 2016 found the system edits CMS uses to identify these payments were not working properly. After the agency corrected this, 

Medicare only spent $3.9 million in overpayments from 2019 to 2021, a small fraction of the total overpayments paid from 2016 to 2019. 

The OIG recommended that CMS direct Medicare contractors to recover as much of the $39.3 million dollars overpaid as possible within the four-year claim reopening period. 

Read the full audit here.

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