Department of Health and Human Services

Office of Inspector General -- AUDIT

"Audit of Observation Service Billings by Baptist Health System September 1, 1995- August 31, 1999," (A-06-01-00088)

April 26, 2002

Complete Text of Report is available in PDF format (1.48 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this audit was to determine whether outpatient observation services billed by the Baptist Health System (Hospital) met Medicare reimbursement requirements.  Our review covered service dates between September 1, 1995 - August 31, 1999.  The Hospital billed Medicare for observation services that did not meet Medicare criteria.  However, prior to the completion of our audit, fiscal intermediary officials made adjustments of approximately $3 million in observation charges to the Hospital's cost reports for fiscal years 1996 through 1999.  The adjustments made by the fiscal intermediary offset any adjustments resulting from our audit.  Because of the adjustments we are making no financial recommendations.  The fiscal intermediary concurred with our procedural recommendations.