OIG to start follow-up audit to determine if Medicare overpaid hospitals for outpatient services

HHS' Office of Inspector General will conduct a second audit to decide if acute care hospitals are being wrongly reimbursed for outpatient services provided at other inpatient facilities.

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, and Medicare 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 patients who received care at inpatient facilities such as long-term care hospitals, inpatient rehabilitation facilities and critical access hospitals.

In September, HHS' OIG discovered $51.6 million in outpatient claims from acute care hospitals overlapped with claims from the inpatient facilities during the audit period. 

The department also learned patients paid $14.4 million in unnecessary deductibles and coinsurance to the acute care hospitals for outpatient services and that Medicare overpaid acute care hospitals because the common working file edits that should have flagged overpayments were not working properly.

HHS's OIG announced its plans to conduct a follow-up audit in late December. The second audit will determine if CMS corrected the common working file edits and to verify the edits are working as they should.

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