Medicare Compliance Review of Abbott Northwestern Hospital for 2013 and 2014

Abbott Northwestern Hospital (the Hospital) complied with Medicare billing requirements for 88 of the 162 inpatient and outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 74 claims, resulting in overpayments of $934,000 for 2013 and 2014 (audit period). On the basis of our sample results, we estimated that the Hospital received overpayments of at least $8 million for the audit period. Overpayments occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.

We recommended that the Hospital (1) refund to the Medicare contractor $8 million (of which $934,000 was overpayments identified in our sample) in estimated overpayments for incorrectly billed services; (2) exercise reasonable diligence to identify and return any additional similar overpayments outside of our audit period, in accordance with the 60-day rule, and identify any returned overpayments as having being made in accordance with this recommendation; and (3) strengthen controls to ensure full compliance with Medicare requirements. The Hospital generally disagreed with our findings and recommendations and described corrective actions that it has taken in response to our third recommendation.