OIG Findings on Overpayments at Critical Access Hospitals

The U.S. Health and Human Services Office of Inspector General (OIG) recently issued a report concluding that Medicare and patients combined overpaid more than a million dollars for the same professional services provided at critical access hospitals (CAH).

Who Bills for Professional Services?

CAH: CAHs are paid for professional services when the physician reassigns their rights to bill for professional services to the CAH. In this case, the CAH bills for the professional service and not the physician.

Physician: When physicians do not reassign their billing rights, the physicians should bill for their services, not the CAH.

Medicare patients have cost-sharing responsibilities to pay, as well as copayments and coinsurance. But, for any given professional service provided to a patient, only the physician or the CAH should bill for it (depending on the circumstances).    Under no circumstances should both the CAH and the physician bill for professional services. This is double billing and both Medicare and the patient would be paying twice for the same service.

OIG performed a review to identify situations when both the CAH and the physician billed for the same service when only one or the other should have billed. The number of overpayments includes Medicare payments, as well as copayments or coinsurance amounts paid by the patients.

Let's Take a Look at the Data

The OIG’s audit covered 40,026 Medicare Part B claims, including 20,013 claims submitted by CAHs and 20,013 claims submitted by health care practitioners, for the same professional services provided to the same beneficiaries on the same dates of service.

Across those 40,026 claims:

  • Medicare Part B paid CAHs $1,021,450 and paid healthcare practitioners $872,858
  • Beneficiaries were responsible for cost-sharing $245,148 for claims billed by CAHs and $293,876 for claims billed by healthcare practitioners

OIG used computer matching, data mining, and other data analysis techniques to identify overpayments for professional services billing by both the CAH and the health care practitioner.

OIG Audit Results

Here's what they found – not all the payments made to CAHs for professional services and payments made to health care practitioners complied with Federal requirements.

For the 40,026 audited claims, CAHs and healthcare practitioners each submitted an equal number of claims. However, for each date of service, only one of the claims complied with Federal requirements. As a result, Medicare overpaid providers by $907,438 and beneficiaries overpaid by $281,321.

These amounts can be further divided into what Medicare specifically overpaid to each entity. They paid:

  • CAHs: $331,448 for 12,156 claims associated with services provided by healthcare practitioners who had not reassigned their billing rights to the CAHs
  • Healthcare Practitioners: $575,990 for 7,857 claims, even though the practitioners had reassigned their billing rights to CAHs

In addition, beneficiaries were incorrectly held responsible for $281,321 in Medicare cost-sharing.

Some of the service types related to these errors include:

  • Electrocardiograms
  • Critical Care
  • Fracture and/or Dislocation Procedures on the Leg (Tibia and Fibula) and Ankle
  • Cystourethroscopy, With Fulguration and/or Resection
  • Intraocular Lens Procedure
  • Established Patient Office or Other Outpatient Services
  • Repair Initial Inguinal Hernia

OIG Recommendations

Based on their findings, the OIG made many recommendations, which included:

  • Recovering all the Medicare overpayments received by both the CAHs and professional providers
  • Ensuring CAHs and professional providers refund beneficiaries their cost-sharing payments
  • Requesting that relevant providers exercise reasonable diligence to identify, report, and return any overpayments in accordance with the 60-day rule and identify any of those returned overpayments as having been made in accordance with this recommendation
  • Developing and implementing claim system edits or alternative means to prevent

If your compliance program involves CAHs or professionals (such as physicians) who perform professional services at CAHs, it would be prudent to assess this risk and potentially review or audit for similar overpayments.


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