News: OIG audit finds Kansas hospital owes millions in overpayments

According to an audit from the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG), a 253-bed hospital in Topeka, Kansas, received millions in overpayments because of incorrectly billing Medicare.

The OIG audit report states that Saint Francis Health Center complied with Medicare billing requirements for 49 of the 100 inpatient claims reviewed, however it did not fully comply for the remaining 51 claims. It is estimated this resulted in overpayments of $707,118 for calendar years 2015 and 2016. Based on the sample results, the OIG estimates Saint Francis received overpayments of “at least $5.5 million” for the audit period.

The OIG recommends the hospital refund the $5.5 million of the estimated overpayments to the Medicare contractor for the claims incorrectly billed within the Medicare reopening period. For the remaining portion of the estimated overpayment for claims outside of the Medicare reopening period, the OIG recommends “exercise[ing] reasonable diligence to identify and return overpayments, in accordance with the 60-day rule, and identify any returned overpayments as having been made in accordance with this recommendation.”

The OIG recommends that the hospital to exercise reasonable diligence to identify and return any additional similar payments outside of the audit period.

Saint Francis agreed that four of the nine inpatient claims found to be in error were incorrectly coded, however disagreed with the remainder of OIG findings, including the “extrapolated overpayment and [their] recommendations.” Many other organizations have cited concerns over audit extrapolation as well, saying that the small sample sizes used are not representative of the whole. According to the audit, the hospital stated that the OIG’s independent medical review contractor committed numerous errors when making these determinations.

The OIG asked its contractor to review Saint Francis’ comments and supplemental documentation provided. Based on the results of this additional review, the OIG revised its determinations adjusting the total number of reportable error claims in the audit period from 53 to 51. The OIG maintains that the remaining findings and recommendations are valid.

Editor’s note: The full HHS report can be found here. To read more about audit activity and recent cases, click here.