Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Outpatient Pharmacy Services Provided by Salem Hospital For Fiscal Year Ending September 30, 1999," (A-01-01-00505)

June 5, 2001

Complete Text of Report is available in PDF format (560 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of our review was to determine whether outpatient pharmacy services at Salem Hospital (Hospital) were billed for and reimbursed in accordance with Medicare regulations. Based on a statistical sample of RC 250 (pharmacy) and RC 636 (drugs requiring detail coding) charges, we estimated that the Hospital had overstated its fiscal year 1999 Medicare outpatient pharmacy charges by at least $106,609. We determined that the Hospital billed Medicare for medications not properly supported by medical records and for self-administered medications which are not reimbursable by Medicare. We noted that the Hospital did not establish or consistently follow existing procedures for the proper billing and record keeping of outpatient pharmacy services.