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OPPS outlier reconciliation and recoupment starts in 2009

Medicare Weekly Update, December 9, 2008

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Editor's Note: Kimberly Anderwood Hoy, director of Medicare and compliance for HCPro, is the author of this week's "Note from the Instructor."

This week, the OIG published the fiscal year 2007 annual report for the Health Care Fraud and Abuse Control Program. It reported $1.8 billion dollars in judgments and settlements for the year, with $797 million returned to the Medicare Trust Fund. The largest settlement for a hospital was related to outliers. A New Jersey hospital paid $7.5 million and signed a corporate integrity agreement for purposely inflating charges for inpatient and outpatient care between 1998 and 2003 to make the cases appear more costly and receive outlier payments to which it was not otherwise entitled. 

This highlights one of the changes to the OPPS this year. Outpatient outliers will be reconciled in the same manner that inpatient outliers are reconciled. CMS implemented the reconciliation as a way to eliminate vulnerability to the outlier system similar to that shown in the case above. 

For outpatients, CMS finalized a policy in the OPPS final rule of reconciliation for outlier payment on or after January 1, 2009. Reconciliation will apply if there is a 10% variance in the hospital’s final cost-to-charge ratio from the one used to calculate the outlier payments. Reconciliation only applies if the hospital received more than $200,000 in total outlier payment for the cost report year. This threshold is significantly lower than the $500,000 threshold for inpatient outlier reconciliation.

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