Follow-Up Audit of Medicare Reimbursements to Hospital Outpatient Department Laboratories for Additional Hematology Indices

EXECUTIVE SUMMARY:

A prior audit report disclosed inappropriate Medicare payments for the additional hematology indices that were a by-product of the automated results provided by the hematology profile tests which calculate and measure all indices simultaneously. The Health Care Financing Administration (HCFA) agreed that these codes were not valid for Medicare reimbursement and removed the codes from the Medicare fee schedules effective January 1999. This final audit report points out, however, that a significant number of payments for these tests were made from the time of our prior audit (December 1995) to the date the procedure codes were eliminated from the fee schedules. Based on a statistical sample, we estimated that inappropriate payments totaled about $14 million during this period. We recommended that HCFA direct the fiscal intermediaries (FIs) to recover the estimated $14 million in overpayments made to providers for reimbursement of additional hematology indices. The HCFA concurred with our recommendation and indicated that it will ensure that the FIs begin appropriate recovery efforts.

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