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The objective of our review was to determine whether Associated Hospital Service (the Intermediary) paid eight Massachusetts long-term care hospitals' (LTCH) claims in accordance with Medicare requirements when beneficiaries had used all of their regular covered benefit days. The Intermediary made full diagnosis-related group payments for (1) claims that should have been reduced to a short-stay outlier payment and (2) claims that should have been reduced by the beneficiaries’ coinsurance amounts for lifetime reserve days. The Intermediary made overpayments totaling $936,418 for 83 claims to 8 LTCHs for services provided from January 1, 2003, through April 30, 2004, because the Intermediary did not ensure that LTCHs' claims contained the appropriate coverage status codes. We recommended that the Intermediary recover the overpayments made to 8 LTCHs for 83 claims totaling $936,418. The Intermediary generally agreed with our recommendation.