Review of Excessive Payments for Outpatient Services Processed by National Government Services in Michigan and Wisconsin for Calendar Years 2004 and 2005

This audit was part of a nationwide review of excessive payments for outpatient services of $50,000 or more (high-dollar payments).  Our objective was to determine whether high-dollar Medicare payments that National Government Services made to hospitals for outpatient services were appropriate. Of the 45 high-dollar payments that National Government Services made for outpatient services for calendar years (CY) 2004 and 2005, only 1 was appropriate. The remaining 44 payments included overpayments totaling $2,737,857, which the hospitals had not refunded by the beginning of our audit. National Government Services made the overpayments because it did not have prepayment or postpayment controls to identify aberrant payments at the claim level. In addition, neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place during CYs 2004 and 2005 to detect and prevent excessive payments. We recommended that National Government Services recover the $2,737,857 in identified overpayments. National Government Services agreed with our recommendation.