Baylor Scott & White – College Station: Audit of Outpatient Outlier Payments

The Centers for Medicare & Medicaid Services administers the Medicare program, which includes coverage for hospital outpatient services under Part B. Under the outpatient prospective payment system, Medicare pays for hospital outpatient services on a rate-per-service basis that varies according to the assigned ambulatory payment classification. Healthcare Common Procedure Coding System codes and descriptors are used to identify and group the services within each ambulatory payment classification group. Outpatient prospective payment system provides outlier payments to hospitals to help mitigate the financial risk associated with high-cost and complex procedures, when a very costly service could present a hospital with significant financial loss. A service or group of services becomes eligible for outlier payments when the cost of the service or group of services estimated using the hospital’s most recent overall cost-to-charge ratio separately exceeds each relevant threshold. Medicare payments may not be made for items or services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” Providers must furnish to the Medicare contractor sufficient information to determine whether payment is due and the amount of the payment. Upon receiving credible information of potential overpayments, providers must exercise reasonable diligence to identify overpayments (i.e., determine receipt of and quantify any overpayments) during a 6-year lookback period. Providers must report and return any identified overpayments by the later of (1) 60 days after identifying those overpayments or (2) the date that any corresponding cost report is due (if applicable). This is known as the 60-day rule. The 6-year lookback period is not limited by Office of Inspector General’s audit period or restrictions on the Government’s ability to reopen claims or cost reports. To report and return overpayments under the 60-day rule, providers can request the reopening of initial claims determinations, submit amended cost reports, or use any other appropriate reporting process. Each facility should have an established charge structure which is applied uniformly to each patient as services are furnished to the patient and which is reasonably and consistently related to the cost of providing the services. While the Medicare program cannot dictate to a provider what its charges or charge structure may be, the program may determine whether or not the charges are allowable for use in apportioning costs under the program. To promote correct coding by providers and to prevent Medicare payments for improperly coded services, Centers for Medicare & Medicaid Services developed the National Correct Coding Initiative. Medicare Administrative Contractors implemented National Correct Coding Initiative edits within their claim processing systems for dates of service on or after January 1, 1996. The National Correct Coding Initiative edits include procedure-to-procedure edits that define pairs of Healthcare Common Procedure Coding System codes and current procedural terminology codes (i.e., code pairs) that generally should not be reported together for the same beneficiary on the same date of service. Baylor Scott & White-College Station is a 142-bed acute care hospital, located in College Station, Texas. The hospital originally opened in 2013 and subsequently in 2013 merged with Baylor Health Care System.