Corporate Compliance

Gov't audit insider 1/27/04: Audit of Lenox Hospital's MSP processes

Healthcare Auditing Weekly, January 27, 2004

Would your Medicare Secondary Payer (MSP) processes meet the Office of Inspector General's (OIG) approval? The OIG recently took a look at the processes Lenox Hospital in New York uses to identify patient insurers, file claims, record accounts receivable and cash receipts, and track and record credit balances. The audit specifically targeted processes and controls affected by the MSP provision.

To meet its objective, the OIG:

  • Examined the hospital's MSP procedures, processes, and controls in light of the applicable laws, regulations, and guidelines

  • Reviewed the credit balance reports for each quarter of the audit period

    TThe OIG focused on 40 beneficiaries whose claims included cost avoidances, MSP adjustment claims, other MSP claims, non-group health plan claims, and no pay claims. The OIG asked to see the following for each of the beneficiaries:

  • Medicare claims

  • Common working file (CWF) data

  • Information in the Lenox admission and discharge records

  • MSP questionnaires

  • Explanations of benefits from other insurers

  • Information in the hospital financial system, accounts receivable, and cash receipts records

    If the OIG demanded any of this information from your facility, would your MSP claims hold up? Lenox fared well in its audit-the OIG declared that its MSP procedures were adequate and resulted in proper determinations. The OIG determined that Medicare was overcharged for $10,691 and that the hospital's credit balances were underreported by $13,066. The hospital will reimburse the Centers for Medicare and Medicaid Services (CMS) for both amounts.

    Click here to read the audit report called "Review Of Medicare Secondary Payer Processes At Lenox Hill Hospital for Claims Paid Between July 1, 2001 and March 31, 2002."

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