OIG: Medicare overpaid acute care hospitals $51.6M

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Acute care hospitals owe Medicare $51.6 million and patients $14.4 million due to inappropriate overpayments, according to a report from HHS' Office of Inspector General.

Acute care hospitals are not supposed to be paid by Medicare for outpatient services provided at another inpatient facility. Rather, outpatient services should be administered under an agreement determined by the two facilities. Medicare then should pay the inpatient facility for all services, as part of the facility's inpatient payment rate.  

However, from January 2013 through August 2016, OIG found Medicare paid acute care hospitals $56 million for outpatient services provided to beneficiaries who received care at inpatient facilities such as long-term care hospitals, inpatient rehabilitation facilities and critical access hospitals.

OIG found $51.6 million in outpatient claims from acute care hospitals overlapped with claims from the inpatient facilities during the audit period. They also unveiled beneficiaries paid $14.4 million in unnecessary deductibles and coinsurance to the acute care hospitals for outpatient services.

"Medicare overpaid the acute care hospitals because the system edits that should have prevented or detected the overpayments were not working properly," the report states. OIG estimates if the system edits had functioned correctly since 2006, $100 million in Medicare savings and $28.9 million in beneficiary savings could have been achieved.

OIG recommended CMS recover all overpayments and instruct the hospitals to refund beneficiaries the unnecessary expenses. In addition, OIG recommended CMS identify and recover any improper payments to acute care hospitals during the audit period and correct system edits.

CMS concurred with OIG's recommendations and outlined actions it implemented or plans to take to comply with the recommendations.  

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