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Medicare Generally Paid Acute-Care Hospitals for Inpatient Stays for Medicare Enrollees Diagnosed With COVID-19 in Accordance With Federal Requirements

Issued on  | Posted on  | Report number: A-09-21-03009

Why OIG Did This Audit

The Coronavirus Aid, Relief, and Economic Security Act increased the payment amount that acute-care hospitals received for Medicare enrollees who were diagnosed with COVID-19 and discharged during the COVID-19 public health emergency (PHE). OIG's previous work related to pneumonia and other diagnosis codes on claims documented aberrant billing by some hospitals. In addition, acute-care hospitals may have had a financial incentive to include a COVID-19 diagnosis on claims to receive additional payments. For these reasons, we conducted this audit of Medicare payments to acute-care hospitals for inpatient stays with admission dates from September 1 through November 30, 2020, for enrollees diagnosed with COVID-19.

Our objective was to determine whether Medicare paid acute-care hospitals for inpatient stays for enrollees diagnosed with COVID-19 in accordance with Federal requirements.

How OIG Did This Audit

Our audit covered $2.7 billion in Medicare payments for 166,107 claims billed by acute-care hospitals. We selected a random sample of 150 claims and excluded 1 claim because the acute-care hospital did not receive the increased payment. We submitted the remaining 149 claims to an independent medical review contractor to determine whether the claims met coverage, medical necessity, and coding requirements.

What OIG Found

Of the 149 sampled claims for inpatient stays for enrollees diagnosed with COVID-19, 146 claims complied with Federal requirements; however, the remaining 3 claims did not comply with the requirements. As a result, Medicare improperly paid hospitals $18,911. These improper payments occurred primarily because the acute-care hospitals made clerical errors when billing claims for inpatient stays. We provided the Centers for Medicare & Medicaid Services (CMS) with the billing details and our findings for the three improperly paid claims so that it can evaluate these claims and decide whether to recover the improper payments in accordance with the agency's policies and procedures.

At the time of our audit, CMS stated that, with the recent end of the COVID-19 PHE on May 11, 2023, CMS was assessing which actions would be most useful in a future PHE, such as a natural disaster or other emergencies, to: (1) ensure a rapid response to future emergencies, both locally and nationally, or (2) address the unique needs of communities that may experience barriers to accessing health care. CMS also stated that it will use lessons learned from the COVID-19 PHE and assessments of the actions it took in response to the PHE to inform what steps it takes in responding to future emergencies, such as mitigating risk by having a policy in place to ensure that payments are made only for treatments that are reasonable and medically necessary.

What OIG Recommends

This report does not have any recommendations because Medicare generally paid acute-care hospitals for inpatient stays for enrollees diagnosed with COVID-19 in accordance with Federal requirements, the improper payments we identified resulted primarily from clerical errors made by the acute-care hospitals, and Medicare no longer pays hospitals the additional amount for billing a claim for a Medicare enrollee diagnosed with COVID-19.

Because this report contains no recommendations, CMS did not provide written comments on our draft report but did provide technical comments, which we addressed as appropriate.