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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Ten-State Review of Outpatient Psychiatric Services at Acute Care Hospitals," (A-01-99-00507)

March 27, 2000

Complete Text of Report is available in PDF format (2.1 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This final report estimates that, in the ten States reviewed, about $224.5 million of $381.9 million in 1997 outpatient psychiatric claims made by acute care hospitals did not meet Medicare's reimbursement requirements. The claims were unallowable because they were; (1) not documented in accordance with Medicare requirements, (2) not reasonable and necessary, and/or (3) rendered by unlicenced personnel. We recommended that the Health Care Financing Administration; (1) consider implementing a first claim medical review of a random sample of new outpatient psychiatric claims to ensure that Medicare program requirements are met, (2) require Medicare fiscal intermediaries to increase post-payment reviews of outpatient psychiatric service claims, (3) require the fiscal intermediaries to initiate recovery of payments found in error, and (4) further emphasize its documentation requirements for all types of outpatient psychiatric services through seminars, education sessions, and newsletters. The HCFA generally concurred with our recommendations 2 through 4, but questioned the cost effectiveness of the first recommendation.