Review of High-Dollar Payments for Virginia and West Virginia Outpatient Claims Processed by National Government Services for Calendar Years 2003-2005

Our audit found that all 46 sampled high-dollar payments ($50,000 or more) that National Government Services (NGS), a Medicare fiscal intermediary, made to hospital outpatient departments (providers) during calendar years (CY) 2003'2005 were inappropriate. The 46 payments included overpayments totaling $3.5 million. CMS contracts with fiscal intermediaries to process and pay Medicare Part B claims submitted by providers. Providers refunded $554,000 of this amount prior to our audit and $627,000 as a result of our audit. Providers had not refunded $2.3 million in overpayments for 35 claims at the time of our audit.

Providers received these overpayments by billing for excessive units of service or by billing for the wrong service or procedure. NGS made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place during CYs 2003''2005 to detect and prevent the overpayments.

We recommended that NGS (1) recover the estimated $2.3 million, and any additional amounts, for the 35 identified overpayments and (2) use the results of this audit in its provider education activities. NGS stated that it had recouped $2.33 million for the 35 identified overpayments, $2,000 more than originally estimated, and that it was using its data analysis reports to identify similar billing errors.