OIG Asks Hospital for $23.6M Back After Medicare Billing Errors

The Office of the Inspector General has identified $23.6 million in overpayments reimbursed to a Nevada-based hospital, resulting from years of Medicare billing errors.

In a report released on April 1st, the HHS watchdog reported that the Sunrise Hospital & Medical Center did not fully comply with Medicare billing requirements for 54 out of 100 inpatient and outpatient claims reviewed.

The non-compliant claims—50 of which were inpatient claims and four of which were outpatient claims—resulted in net overpayments of nearly $1 million for the audit period from Jan. 1, 2017, through Dec. 31, 2018.

On the basis of the sample results, OIG extrapolated that Sunrise Hospital & Medical Center received tens of millions of dollars in overpayments from Medicare during the audit period because the hospital “did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.”

In particular, the hospital incorrectly billed Medicare Part A for inpatient rehabilitation facility (IRF) claims. OIG determined that 36 of the 85 selected inpatient claims contained Medicare billing errors during the audit period.

The Medicare billing errors identified included unreasonable and unnecessary IRF services because beneficiaries did not require active and ongoing therapeutic intervention of multiple therapy disciplines; beneficiaries generally did not require and could not reasonably be expected to actively participate in, and benefit from, intensive rehabilitation therapy; beneficiaries were not sufficiently stable at the time of admission to the IRF to be able to actively participate in the intensive rehabilitation program; or they did not require supervision by a rehabilitation physician.

These errors, specifically, resulted in $932,782 in overpayments to the hospital during the audit period.

The remaining non-compliant claims included claims incorrectly billed as inpatient, incorrect outlier payments, incorrectly billed outpatient modifiers, and incorrectly billed Healthcare Common Procedure Coding System (HCPCS) codes.

OIG stated that officials at Sunrise Hospital & Medical Center did not provide a cause for the identified Medicare billing errors because they generally contended the claims were compliant with billing requirements.

In a separate statement on the hospital’s website, Todd P. Sklamberg, CEO of Sunrise Hospital & Medical Center, also said, “We strongly disagree with the OIG’s audit findings related to our IRF and because we believe the care we provided to our patients was necessary and effective, we will appeal those findings in due course.”

“We think it unfortunate that the OIG audit process did not take into account the overwhelmingly positive outcomes and the feedback of our patients and their families, all of whom benefited from our IRF services,” added Sklamberg.

OIG has recommended that Sunrise Hospital & Medical Center refund the Medicare contractor the total of overpayments, less the $8,914 the hospital had already repaid for previous Medicare billing errors on some inpatient claims during the audit period.

However, some of the incorrectly billed claims identified as part of the audit are now beyond Medicare’s four-year reopening period, OIG acknowledged in the report. Therefore, it recommended that the hospital only refund the estimated overpayments for the incorrectly billed claims within the reopening period.

The watchdog also advised the hospital to “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” and strengthen controls.

Recommended controls included ensuring all IRF beneficiaries meet Medicare criteria for acute inpatient rehabilitation and have required documentation in medical records.

IRF claims are one of the most high-risk areas for Medicare billing errors, according to OIG.

IRF claims are considered reasonable and necessary per federal regulations if, at the time of admission, the patient requires active and ongoing therapeutic intervention of multiple therapy disciplines and can reasonably be expected to actively participate in, and benefit from, an intensive rehabilitation therapy program.

Patients must also be sufficiently stable at the time of admission to the IRF to be able to actively participate in the intensive rehabilitation program and IRF services must be supervised by a rehabilitation physician.

OIG audits IRF claims from hospitals as part of a series of hospital compliance audits.