Department of Health and Human Services

"Review of Outlier Payments Made to Rhode Island Hospital Under the Outpatient Prospective Payment System For The Period August 1, 2000 Through June 30, 2001," (A-01-02-00521)

December 5, 2002

Complete Text of Report is available in PDF format (621 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this review was to determine whether outpatient claims with outlier payments were billed in accordance with Medicare laws and regulations.  We found that a weakness in RIHís internal controls for billing observation services resulted in excessive or unwarranted Medicare OPPS outlier payments to the hospital.  We reviewed a judgmentally selected sample of 35 outpatient hospital claims with outlier payments totaling $93,259.  Our sample represented less than 2 percent of the hospitalís OPPS outlier claims and about 21 percent of the outlier payments.  Based on our review, we found that overpayments totaling $13,275 were made for 21 claims because the hospital did not bill for observation services in accordance with Medicare regulations.  Specifically, the hospital billed charges for observation services that were unsupported, not medically necessary, or excessive.  The RIH has generally concurred with our findings and recommendations.