Review of High-Dollar Payments for Inpatient Services Processed by Wisconsin Physicians Service for Calendar Years 2004 Through 2006'Hospitals With Five or More High-Dollar Payments

Of the 520 high-dollar Medicare payments ($200,000 or more) that Wisconsin Physicians Service made to hospitals for inpatient services for calendar years 2004 through 2006, 42 were appropriate. The 478 remaining payments included net overpayments totaling $4.7 million, which the hospitals had not refunded prior to the start of our audit.

Contrary to Federal guidance, hospitals inaccurately reported the number of billing units for blood clotting factor, reported incorrect diagnosis and procedure codes, and reported excessive charges that resulted in inappropriate outlier payments. Hospitals attributed most of the incorrect claims to data entry errors and insufficient documentation. Wisconsin Physicians Service made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place to detect and prevent the overpayments.

We recommend that Wisconsin Physicians Service (1) recover the $4.7 million in identified net overpayments, (2) use the results of this audit in its provider education activities related to data entry procedures and proper documentation, and (3) consider implementing controls to identify and review all payments greater than $200,000 for inpatient services.