CA hospitals overbilled Medicare by $367M

Auditors miffed about claims hiatus in SGR patch bill
Tools

California's hospitals received nearly $367 million in Medicare overpayments in 2012, primarily for inpatient services, the San Francisco Business Times reported.

The overpayments in California were part of $2.4 billion in alleged mispayments involving hospitals from two years ago, according to data supplied by the Centers for Medicare & Medicaid Services (CMS).

Overall, CMS believes the hospitals received $2.3 billion in overpayments and about $109 million in underpayments. California, which had the nation's highest total of excess payments, represents about 10 percent of the U.S. population but about 15 percent of the overpayments. Its total was more than double that of New York and nearly triple that of Florida.

Although the numbers reported by recovery audit contractors are large, the Business Times noted that the 18-month hiatus on claims audits that was included in the recent patch to the sustainable growth rate (SGR) formula complicates ongoing follow-up. Congress lumped in the auditing hiatus, along with a delay in the implementation of ICD-10, in its annual SGR patch bill when a permanent fix to SGR collapsed over objections to the insertion in legislation of a delay for the individual mandate to purchase health insurance. However, CMS did expand the overall authority of auditors to deny claims.

Nevertheless, the hiatus also has the auditor community riled up--and conflicted.

"Our members vehemently oppose this oversight holiday," said Becky Reeves, a spokeswoman for the American Coalition for Healthcare Claims Integrity (ACHCI), which represents recovery audit contractors, Medicare audit contracts and zone program integrity contractors. However, individual auditing organizations can't comment on the hiatus due to contracts they signed with CMS to provide services, according to the Business Times.

The hiatus could potentially keep ongoing waste in the Medicare program from going unchecked, the ACHCI suggested in a statement.

However, David Sayen, California's regional CMS administrator, told the Business Times that the hiatus is a sign that the agency's auditing program actually works.

To learn more:
- read the San Francisco Business Times article
- here's the CMS report (.pdf)
- check out the ACHCI statement

Related Articles:
House approves temporary SGR fix
CMS expands contractors' claims denial authority
Medicare RACs recoup $2.4B in overpayments in nine months
Congress demands RAC reform
OIG blasts Medicare, RACs for weak oversight
CMS to suspend RAC requests