Medicare Hospital Patient Transfers Improperly Reported and Paid as Hospital Discharges

This final report provides the results of work on hospital transfer recovery projects. The projects were undertaken jointly by the Office of Inspector General, Health Care Financing Administration (HCFA), and Medicare fiscal intermediaries. The projects identified overpayments that occurred because transfers of patients between PPS hospitals were erroneously reported and paid as discharges. In total, these projects resulted in Medicare Part A trust fund recoveries totaling $219 million and annual savings totaling $8 million. In addition, we estimate that $22 million will be recovered from transfer transactions that warrant further resolution. We recommended that HCFA place a high priority on recovering the remaining overpayments. The HCFA concurred and will issue a memorandum to all Associate Regional Administrators advising them to instruct their fiscal intermediaries to comply with the OIG's recommendations and take immediate steps to complete the recovery project.