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Audit (A-04-08-00039)

Review of High-Dollar Inpatient Claims Processed by Cahaba Government Benefit Administrators, LLC (Contractor No. 00010), for Calendar Years 2004 Through 2006

Executive Summary

Cahaba Government Benefit Administrators, LLC (Cahaba), overpaid Alabama hospitals $1.5 million for inpatient services during calendar years 2004 through 2006. Contrary to Federal guidance, hospitals reported excessive units of service and charges that resulted in inappropriate outlier or add-on payments and failed to maintain documentation of all charges filed. Hospitals generally attributed the incorrect claims to data entry errors or insufficient documentation. Cahaba made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place to detect and prevent the overpayments. Additionally, Cahaba overpaid one claim because it used an incorrect wage index when determining the payment. Cahaba attributed this overpayment to a data entry error.

We recommended that Cahaba (1) recover the $1.5 million in identified overpayments, (2) use the results of this audit in its provider education activities, and (3) consider implementing controls to identify and review all payments greater than $200,000 for inpatient services. Cahaba agreed with our recommendations.

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