Payment Edits for Outpatient Psychiatric Services at Medicare Carriers

EXECUTIVE SUMMARY:

Medicare limits reimbursement for certain outpatient mental health services to 62.5 percent of Medicare allowed charges. Our final report points out that the Medicare carrier serving Maine, Massachusetts, New Hampshire, and Vermont failed to apply this limitation to some services to which it applied. As a result, we estimate the carrier overpaid providers approximately $1.0 million in Calendar Year 1996. We recommended that the Health Care Financing Administration (HCFA) initiate overpayment recovery actions, appraise all Medicare carriers of this potential payment error, and take the necessary steps to prevent future errors from occurring. The HCFA concurred with our findings and recommendations.

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