Corporate Compliance

Incorrect billing at Massachusetts rehab facility

Healthcare Auditing Weekly, August 31, 2004

After an audit, the Office of Inspector General (OIG) found that Weldon Rehabilitation Hospital received $202,872 in Medicare overpayments during fiscal year (FY) 2003 because 49 inpatient rehabilitation facilities (IRF) claims were not billed in accordance with prospective payment system (PPS) regulations. According to an OIG audit report, the Massachusetts hospital billed 47 of the claims using an incorrect patient status code for patients transferred to other facilities. The OIG also found that Weldon billed two separate claims for one IRF interrupted stay. The OIG recommends that Weldon refund the overpayments and implement policies, procedures, and training for correct coding of patient status codes and monitor adherence to controls for billing interrupted stays. During the audit, the OIG did the following:

  • Reviewed applicable Medicare laws and regulations

  • Extracted Weldon's paid-claims data for FY 2003 and selected 60 claims that were a high risk for incorrect billing

  • Reviewed the inpatient claims history detail to verify that selected claims had not been cancelled and determine whether the patient was transferred from the IRF to another facility

  • Discussed procedures related to the development and submission of Medicare claims and patient assessment instruments with hospital personnel

  • Reviewed patient-assessment instruments for each selected claim to determine whether the assessment was transmitted to CMS's patient database in accordance with Medicare regulations

  • Recalculated the correct payment for the incorrectly billed claims to determine overpayment amounts

  • Discussed the results of the review with Weldon and its fiscal intermediary, Mutual of Omaha

    Click here to read the audit report, "Review of Medicare Inpatient Rehabilitation Facility Prospective Payments at Weldon Rehabilitation Hospital for Fiscal Year 2003" (A-01-04-00504), issued July 23.

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