Monitoring Quality of Care and Overpayment Issues Associated With Hospital Readmissions Under the Medicare Prospective Payment System

EXECUTIVE SUMMARY:

This final report estimates, based on a statistical sample, that Medicare overpayments due to inappropriate same day/same hospital readmissions in 18 States totaled approximately $22 million in Calendar Year 1996. The most prevalent errors were attributable to premature discharges from the initial hospital stay (12 of 29 sample errors), and the provision of additional services that should have been provided and billed as part of one continuous length of stay (8 of 29 sample errors). This indicates a serious quality of care issue which needs to be closely monitored. In addition to financial adjustments, we recommended that the Health Care Financing Administration (HCFA) work with the Office of Inspector General (OIG) to do additional work dealing with hospital readmissions to identify additional overpayments, to monitor quality of hospital care, and to profile aberrant hospital providers ensuring corrective actions plans are instituted and investigative referrals are made to the OIG when appropriate. The HCFA concurred with our findings and recommendations.

---