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News: OIG Error Extrapolations Costs Facilities

CDI Strategies, October 23, 2014

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As the adage goes “a picture’s worth a thousand words” but for facilities wrangling with the Office of the Inspector General (OIG) the adage might better be rephrased to “a sample’s worth a million dollars,” as the agency extrapolates payment errors to the sum of more than $400,000 related to Mission Hospital in Asheville, North Carolina and nearly $1.5 million for Orlando (Florida) Health.

At Mission Health, the OIG audited 192 inpatient and outpatient claims and concluded the 795-bed hospital made errors on 48 of them, causing a $121,594 overpayment that was then extrapolated to “at least $443,183 for the audit period.”

Among other things, OIG said Mission billed for inpatient admissions that should have been outpatient or observation services and incorrectly coded MS-DRGs.

Although Mission agreed with roughly half (24) of the OIG uncovered findings, it contested the rest, pointing out to the OIG problems with Part A to Part B rebilling, denials already recouped from Recovery Auditors and/or Medicare Administrative Contractors, and finding fault with the OIG’s statistical sampling methodology—all of which complaints the OIG responded to and denied.

Similarly, in an audit of 218 claims, the OIG found errors in 143 of Orlando Health’s claims submissions again principally related to inpatient admissions (which should have been billed as outpatient or observation) and for incorrectly coded secondary diagnoses leading to MS-DRG overpayments. Of the $462,142 in overpayments the OIG extrapolated to a larger universe of inpatient claims for overpayments of “at least $1,453,243 for the audit period.”

Orlando Health admitted it made technical errors on 75 claims but also expressed concerns with the OIG’s statistical validity and extrapolation amounts.

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