Medicare Compliance Review of the University of Michigan Health System

The University of Michigan Health System (The Hospital), located in Ann Arbor, Michigan, complied with Medicare billing requirements for 108 of the 181 inpatient and outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 73 claims, resulting in overpayments of $1.3 million for calendar years 2014 and 2015. Specifically, 65 inpatient claims had billing errors, resulting in overpayments of $1.3 million, and 8 outpatient claims had billing errors, resulting in overpayments totaling $14,691. These errors 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. On the basis of our sample results, we estimated that the Hospital received net overpayments totaling at least $6.2 million for the audit period.