Corporate Compliance

OIG finds overpayments in Indiana Medicaid agency

Healthcare Auditing Weekly, March 3, 2009

The Office of Medicaid Policy and Planning in Indiana made more than half a million dollars in overpayments to facilities for inpatient hospital claims for beneficiaries who transferred hospitals on the same day, according to an audit report from the OIG. 

The overpayments, totaling $622,351 ($388,695 federal share), occurred between October 2003 and September 2006. According to the OIG report, the state agency made the overpayments because the hospitals incorrectly coded the claims as discharges instead of transfers. The state agency’s claim processing system did not identify the claims for beneficiaries who transferred from one hospital to another on the same day. Pursuant to the Indiana Health Coverage Programs Provider Manual, the state agency should pay the transferring hospital a prorated DRG payment, not a full DRG payment.

The OIG is recommending the state agency:
  • Refund the federal government $388,695 for the overpayments
  • Use the results of this audit in its provider education activities related to proper coding of claims for beneficiaries transferring from one hospital to another
  • Implement controls to detect and review claims for beneficiaries transferred from one hospital to another on the same day

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