Health Information Management

Healthcare News: Noridian issued $3 million in overpayments for inpatient services

JustCoding News: Outpatient, May 5, 2010

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Based on its review of high-dollar inpatient payments for services Noridian Administrative Services, LLC, processed from January 2003 through December 2005, the Office of Inspector General (OIG) found $3 million in overpayments by the Medicare administrative contractor.

In the April 2010 report, the OIG states that of the 415 high-dollar Medicare payments ($200,000 or more) Noridian issued to hospitals for inpatient services during that time, 109 payments were inappropriate.

The report states:

Contrary to federal guidance, hospitals inaccurately reported the number of billing units of service, reported incorrect procedure codes, and reported excessive charges that resulted in inappropriate outlier payments. Hospitals attributed most of the incorrect claims to clerical errors or to billing systems that could not prevent or detect the incorrect billing of units of service and other types of billing errors. Noridian made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place to prevent or detect incorrect payments.

At the start of the audit, hospitals had not refunded $1.9 million of these net overpayments.

The OIG issued the following recommendations to Noridian:

  • Recover the $1.9 million in net overpayments
  • Determine and recover the overpayment for the one inpatient claim still under adjudication
  • Use the results of this audit in its provider education activities
  • Consider implementing controls to identify and review all payments greater than $200,000 for inpatient services. 

The following examples illustrate the billing errors:

  • One hospital billed 43,550 units of HCPCS code J7193 (factor IX nonrecombinant) when it should have billed 436 units, resulting in an overpayment of $310,817.
  • One hospital billed outpatient drugs on three inpatient claims, resulting in a total overpayment of $96,866.
  • One hospital submitted four claims that covered intravenous therapy billed by the hour instead of by visit, resulting in a total overpayment of $89,366.

The hospitals attributed most of the incorrect claims to clerical errors or to billing systems that could not prevent or detect the incorrect billing of units of service and other types of billing errors.



Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Most Popular