OIG Specific Medicare Audit Report: Compliance with Inpatient and Outpatient Claims

Another Office of Inspector General (OIG) Medicare audit report was released in early May 2021 titled, “Medicare Hospital Provider Compliance Audit: Virtua Our Lady of Lourdes Hospital”, this hospital is located in New Jersey. These ongoing OIG Medicare audit reports are important to review, internally discuss and determine if any additional or specific steps should be taken at your hospital or within your hospital organization compliance audit plan/program.

In this particular Medicare audit the OIG looked at both inpatient and outpatient claims from January 1, 2016 through December 31, 2017. There is a long list of risk areas identified by that OIG and these were focused on for this audit and included the following:

  • IRF claims
  • inpatient claims billed with Comprehensive Error Rate Testing (CERT) high-error rate DRG codes
  • inpatient claims billed with high-severity- level DRG codes
  • inpatient mechanical ventilation claims
  • inpatient claims paid in excess of charges
  • outpatient claims paid in excess of $25,000
  • outpatient claims paid in excess of charges
  • outpatient bypass modifier claims
  • outpatient surgeries billed with units greater than one
  • outpatient skilled nursing facility (SNF) consolidated billing.

This list of risk areas across a variety of settings should be used to develop your hospital internal and external audit plan in order to be proactive rather than reactive. Keep in mind that when it comes to DRG errors, the Centers for Medicare, and Medicaid Services (CMS) calculates the Medicare Fee-for-Service improper payment rate through the Comprehensive Error Report Testing (CERT) program. Annually, the CERT evaluates a statistically valid stratified random sample of claims to determine whether they were paid properly under Medicare coverage, coding, and billing rules. Based on the OIG analysis of CERT data, they have identified 10 DRGs that are most at risk for billing errors: 149, 312, 313, 518, 519, 520, 742, 743, 947, and 948.

The OIG found 40 out of 100 claims with error, which resulted in $666,021 in overpayments for the audit period. For the 40 claims, 37 inpatient claims and 3 outpatient claims had billing errors according of the OIG report. The OIG report summary states that Virtua Our Lady Hospital should:

  • “refund to the Medicare contractor the portion of the $4,765,305 in estimated overpayments for the audit period for claims that it incorrectly billed that are within the 4-year reopening period;
  • based on the results of this audit, 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 control.”

To access this full OIG report and read over the details go to: Medicare Hospital Provider Compliance Audit: Virtua Our Lady of Lourdes Hospital, A-02-18-01018 (hhs.gov)

My healthcare experience has shown that these OIG audit reports are extremely valuable. Now is the time to look at your next coding audit and the areas that are being focused on. Compare your audit plan to the risk areas that the OIG has identified. Talk to your external consulting vendor also about the risks and focused areas. Now is a good time to conduct an internal and an external coding audit and follow that with education.

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