Indiana hospital overbilled Medicare by $22M, OIG says

Community Hospital in Munster, Ind., a 458-bed nonprofit hospital, failed to comply with Medicare billing requirements for 86 inpatient claims of 170 inpatient and outpatient claims reviewed by HHS' Office of Inspector General, according to an OIG report.

The 86 claims that did not comply with Medicare billing requirements resulted in the hospital receiving $1.3 million in combined overpayments during the audit period of Jan. 1, 2015, through Dec. 31, 2016, according to the OIG.

Extrapolating from the sample results, the OIG estimated Community Hospital received at least $22 million in overpayments from Medicare during the audit period.

Based on its findings, the OIG recommended the hospital refund Medicare $22 million, exercise reasonable diligence to identify and return any additional overpayments received outside of the audit period, and strengthen controls to ensure full compliance with Medicare requirements.

In written comments on the draft report, Community Hospital disagreed with most of the OIG's findings and recommendations, calling the audit "fundamentally flawed." The hospital said it correctly billed inpatient rehabilitation claims that the OIG identified as not fully complying with Medicare billing requirements.

"OIG relied primarily upon the Medicare Benefit Policy Manual, which is non-binding guidance," the hospital stated. "Federal courts and the Attorney General have both concluded that guidance does not have the force of law. OIG therefore erred when denying IRF claims that allegedly did not meet standards in the MBPM that are not also clearly stated in regulations."

The hospital also argued the OIG's sampling methodology was flawed and its use of extrapolation was inappropriate and premature.

After reviewing the hospital's written comments on the draft report, the OIG maintained its findings and recommendations.

Community Hospital will have the opportunity to appeal the results of the audit.

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