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First Coast Service Options, Inc., Paid Providers for Hyperbaric Oxygen Therapy Services That Did Not Comply With Medicare Requirements

Of the 120 sampled outpatient claims totaling $415,513, First Coast Service Options, Inc. (First Coast) made payments for hyperbaric oxygen (HBO) therapy in accordance with Medicare requirements for 5 claims. However, First Coast made payments for HBO therapy that did not comply with Medicare requirements for 110 claims (92 percent), resulting in overpayments for HBO therapy totaling $351,970. We did not review the remaining five claims because one was canceled and the Recovery Audit Contractor indicated that the other four were under review by another entity.

First Coast made payments for HBO therapy that did not always comply with Medicare requirements because it had limited policies and procedures in place to ensure that it made correct payments. During the audit period, First Coast did not have effective automated Medicare Part A prepayment edits in its claims processing system to monitor HBO therapy coverage. Based on our sample results, we estimated that First Coast overpaid providers in Jurisdiction N $39.7 million during the audit period for HBO therapy that did not comply with Medicare requirements.

We made the following recommendations to First Coast: (1) recover the portion of the $351,970 in Medicare overpayments; (2) notify the 70 providers responsible for the remaining 46,737 nonsampled claims with potential overpayments estimated at $39.3 million so that those providers can investigate and return any identified overpayments; (3) identify and recover any improper payments for HBO therapy services made after the audit period, and (4) work with the Centers for Medicare & Medicaid Services to the extent possible in developing more effective automated HBO therapy prepayment edits in the claim processing system, which would result in millions of dollars in future cost savings.

In written comments on our draft report, First Coast concurred with our first three recommendations and partially concurred with the fourth.