Noridian Healthcare Solutions, LLC, Inappropriately Paid Hospitals' Medicare Claims Subject to the Postacute Care Transfer Policy in Jurisdiction 2

Noridian Healthcare Solutions, LLC (Noridian), the Medicare contractor for Jurisdiction 2 hospitals in four States (Alaska, Idaho, Oregon, and Washington), inappropriately paid 315 Medicare claims subject to the postacute care transfer policy during the period June 2009 through August 2012. Noridian confirmed that hospitals used incorrect patient discharge status codes on their claims, indicating that the patients were discharged to home or certain types of health care institutions rather than transferred to postacute care. Consequently, Noridian overpaid the hospitals by $1.1 million. Noridian made these overpayments because the Common Working File (CWF) edits related to postacute transfers were not working properly. Noridian did not receive the automatic adjustments that identify overpayments on inpatient claims. We recommended that Noridian (1) recover $1.1 million in identified overpayments; (2) educate Jurisdiction 2 hospitals on the importance of reporting the correct patient discharge status codes on transfer claims, especially when home health services have been ordered; and (3) work with the CWF maintenance contractor to ensure that it receives the automatic adjustments identifying overpayments on inpatient claims. Noridian concurred with all of our recommendations and provided information on actions that it had taken or planned to take to address our recommendations.