Medicare Hospital Provider Compliance Audit: Providence Medical Center

Our previous work at other hospitals identified these types of hospital claims, among others, that were at risk for noncompliance:• inpatient claims billed with elective surgical procedures,• inpatient claims billed with high-risk DRG codes, • inpatient claims billed with high-severity-level DRG codes,• inpatient claims billed for mechanical ventilation, and • outpatient claims with payments greater than $25,000.For the purposes of this report, we refer to these areas at risk for incorrect billing as “risk areas.” We reviewed these risk areas as part of this audit. 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” (Social Security Act (the Act) § 1862(a)(1)(A)). In addition, the Act precludes payment to any provider of services or other person without information necessary to determine the amount due the provider (§ 1815(a)).Federal regulations state that the provider must furnish to the Medicare contractor sufficient information to determine whether payment is due and the amount of the payment (42 CFR § 424.5(a)(6)).Claims must be filed on forms prescribed by CMS in accordance with CMS instructions (42 CFR § 424.32(a)(1)). The Medicare Claims Processing Manual (the Manual) requires providers to complete claims accurately so that Medicare contractors may process them correctly and promptly (Pub. No. 100-04, chapter 1, § 80.3.2.2). The Manual states that providers must use HCPCS codes for most outpatient services (chapter 23, § 20.3). The Office of Inspector General (OIG) believes that this audit report constitutes credible information of potential overpayments. 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 OIG’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. The Hospital is a 171-bed hospital located in Kansas City, Kansas. According to CMS’s National Claims History (NCH) data, Medicare paid the Hospital approximately $124 million for 11,128 inpatient and 53,868 outpatient claims between January 1, 2016, and December 31, 2017 (audit period).