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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Expansion of the Diagnosis Related Group Payment Window," (A-01-92-00521)

July 6, 1994

Complete Text of Report is available in PDF format (3.3 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final audit report provides the results of our review of the diagnosis related group payment window. We estimate that approximately $8.6 million in improper payments for nonphysician outpatient services were made to hospitals under the prospective payment system for the period November 1990 through December 1991. We also identified approximately $4.1 million in improperly charged coinsurance and deductibles related to the improper payments. Our analysis of hospital responses indicated that improper billings were made primarily because of clerical errors and misinterpretation of the regulations. In additional to financial adjustments, we recommended correction of procedural weaknesses.