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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Follow-up Audit of Improper Medicare Payments to Hospitals for Nonphysician Outpatient Services Under the Inpatient Prospective Payment System," (A-01-00-00506)

July 31, 2001

Complete Text of Report is available in PDF format (831 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


Based on the results of previous audits, the Office of Inspector General (OIG) initiated a joint project with the Centers for Medicare and Medicaid Services (CMS) and Department of Justice (DOJ) to recover duplicate payments made to hospitals that had not complied with Medicare requirements regarding the diagnosis related group (DRG) payment window.  This report, points out that the joint project, as of July 2000, had resulted in the collection of approximately $73 million covering the period November 1990 through December 1996 from 2800 hospitals that had entered into settlement agreements with DOJ. Since that time, duplicate payments have decreased significantly, but we did identify approximately $5 million of potential duplicate payments for calendar years 1997 and 1998. We recommended to CMS financial adjustments, and additional procedural refinements to identify and preclude further duplicate payments. The CMS generally concurred with our recommendations.