OIG: Medical center received nearly $1.7 million in Medicare overpayments

A recent OIG audit and report revealed that Medicare incorrectly paid approximately $1.7 million to Carolinas Medical Center in Charlotte, North Carolina, as a result of incorrect billing on the part of the medical center.

The OIG reviewed 240 inpatient claims for Carolinas Medical Center and found that the facility failed to comply with Medicare billing requirements for 83 claims. The billing errors resulted in $331,831 in overpayments from January 1, 2014, through December 31, 2015. Based on the selection of claims included in the audit, the OIG estimated the medical center actually received $1.7 million in overpayments during the audit period.

The OIG attributed the Carolinas Medical Center claim errors to inadequate controls for preventing incorrect billing. More specifically, the OIG attributed the claim errors to the following:

• Incorrect DRG codes (50 of the 240 audited claims): The facility disagreed with OIG about some DRG errors, but since the audit has adopted additional controls and training to prevent such errors on future claims.
• Billing for discharges when the facility should have billed for transfers to home health (29 claims): These errors occurred because of the discharge status being set to home rather than home health. In some instances, the facility received the full DRG payment for services related to the hospital stay rather than per-diem rates it would have received if the discharge status was correctly entered.
• Incorrectly billing same-day readmissions that should have been billed as part of the initial hospital stay when the reason for readmission was related to the initial stay: These claims could have been billed as a continuous stay. Some of the readmissions were attributed to the patient leaving against medical advice and later returning to the hospital. Others were related to billing staff failing to combine claims because they were unaware that patients treated in the detox unit were inpatients.
• Incorrectly billing Part A for a patient who did not have an inpatient order: The hospital attributed this mistake to a bill processing error and stated that it did not follow the correct processes for rebilling the claim as outpatient.

Carolinas Medical Center disagreed with several of the OIG findings. However, the OIG stands by its findings and recommends that the facility refund nearly $1.7 million in overpayments.