OIG: Provider-based facilities vulnerable to improper medical billing

CMS is making efforts to improve its oversight of billing at provider-based facilities; however, vulnerabilities continue to limit its ability to make sure all provider-based facilities bill appropriately, according to a recent report from HHS' Office of Inspector General.

The OIG said it surveyed a projectable random sample of 333 hospitals to determine the number of provider-based facilities they owned. Then, the agency said it looked at supporting documentation from a purposive sample of 50 hospitals that reported owning off-campus provider-based facilities "but had not voluntarily attested that the facilities met requirements." The OIG said it also received information from CMS to determine the extent to which CMS has systems and procedures to oversee provider-based billing and had conducted analysis to determine the benefits of the provider-based designation. Finally, the OIG collected information from CMS about its attestation reviews and challenges associated with its review process.

The OIG found that CMS is taking steps to improve its monitoring of provider-based billing; however, there are still vulnerabilities associated with provider-based billing. For example, CMS cannot identify all on- and off-campus provider-based billing in its aggregate claims data, which is critical to ensuring appropriate payments, the OIG said. CMS may also be challenged implementing recent legislative changes because it is unable to separate all provider-based billing from other claims data, according to the OIG.

Overall, the OIG found more than three-quarters of the 50 hospitals it reviewed had not voluntarily attested for all of their off-campus provider-based facilities that did not meet at least one requirement to receive higher provider-based payment.

"CMS' efforts to gather information on the volume of the services provided by off-campus provider-based facilities are positive steps to improve oversight. However, CMS has no independent way to determine the amount of overpayments for on-campus provider-based facilities or multiple off-campus facilities owned by the same hospital in one building or campus, when the physician claim does not specify the exact location of the service," the OIG concluded. "Further, CMS reported that it often has difficulty obtaining the hospital documentation needed to support its attestation reviews."

Based on its findings, the OIG continues to support previous OIG and Medicare Payment Advisory Commission recommendations to either eliminate the provider-based designation or equalize payment for the same physician services provided in different settings. If CMS decides not to seek authority to implement these measures, the OIG recommended that it implement systems and methods to monitor billing by all provider-based facilities; require hospitals to submit attestations for all their provider-based facilities; ensure that regional offices and Medicare Administrative Contractors apply provider-based requirements appropriately when conducting attestation reviews; and take appropriate action against hospitals and their off-campus provider-based facilities that the OIG identified as not meeting requirements.

CMS partially concurred with the OIG's first new recommendation, did not concur with the second, and concurred with the third and fourth.

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