Deeper Than the Headlines: OIG Medicare Compliance Reviews

For many years now the OIG has been performing Medicare Compliance reviews of hospitals.

The most recent of such reviews was on November 16, 2017 and was a compliance review the OIG performed on Rush University Medical Center (Rush).

Medicare payments to hospitals is big business. In 2015, for example, Medicare paid hospitals $163 Billion which represents 46% of all fee-for-service payments for the year. In performing these compliance reviews, the OIG uses computer matching, data mining, and data analysis techniques to identify hospital claims that are at risk for noncompliance with Medicare billing requirements.

In the Rush compliance review, they reviewed a stratified random sample of 120 inpatient and outpatient claims with payments totaling $1.7 million for the chosen audit period.

They concluded the hospital complied with Medicare billing requirements for 63 of the 120 inpatient and outpatient claims reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 57 claims, resulting in overpayments of $814,150 for calendar years 2014 and 2015. Specifically, 51 inpatient claims had billing errors, resulting in overpayments of $812,744, and 6 outpatient claims had billing errors, resulting in overpayments of $1,406. According to the OIG, these errors occurred primarily because the hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.

On the basis of their sample results, OIG estimated that the Rush received overpayments of approximately $10.2 million for the audit period and they are recommending the hospital refund the $10.2 million.

Beyond this, the OIG is recommending that Rush identify and return any additional similar overpayments received outside of this particular audit period, in accordance with the 60-day rule, which requires a review of the last 6 years.

The largest portion (97%) of the repayment amount was related to inpatient rehabilitation services or IRF benefits. The OIG contends the Hospital incorrectly billed Medicare Part A for beneficiary stays that did not meet Medicare criteria for the higher acute inpatient rehabilitation level of care.

Their report states what this ‘higher acute inpatient rehabilitation level of care’ is. Specifically: “the IRF benefit is designed to provide intensive rehabilitation therapy in a resource intensive inpatient hospital environment for patients who, due to the complexity of their nursing, medical management, and rehabilitation needs, require and can reasonably be expected to benefit from an inpatient stay and an interdisciplinary team approach to the delivery of rehabilitation care (Pub. No. 100-02, chapter 1, § 110-110.1).

In addition, the Medicare Benefit Policy Manual states that for IRF care to be considered reasonable and necessary, the documentation in the patient’s IRF medical record must demonstrate a reasonable expectation that at the time of admission to the IRF the patient

1. required the active and ongoing therapeutic intervention of multiple therapy disciplines;
2. generally required an intensive rehabilitation therapy program;
3. actively participated in, and benefited significantly from, the intensive rehabilitation therapy program;
4. required physician supervision by a rehabilitation physician; and
5. required an intensive and coordinated interdisciplinary approach to providing rehabilitation (Pub. No. 100-02, chapter 1, § 110.2).

Furthermore, the Medicare Benefit Policy Manual states that a primary distinction between the IRF environment and other rehabilitation settings is the intensity of rehabilitation therapy services provided in an IRF. For this reason, the information in the patient’s IRF medical record must document a reasonable expectation that at the time of admission to the IRF the patient generally required the intensive rehabilitation therapy services that are uniquely provided in IRFs (Pub. No. 100-02, chapter 1, § 110.2.2).”

The full OIG report can be found here.