Review of Medicare Payments Exceeding Charges for Outpatient Services Processed by Noridian Administrative Services, LLC, in Jurisdiction 2 for the Period January 1, 2006, Through June 30, 2009

Our review found that of the 1,340 selected line items for which Noridian Administrative Services, LLC (Noridian), made Medicare payments to providers for outpatient services for the period January 1, 2006, through June 30, 2009, 359 were correct. Providers refunded overpayments on 51 line items totaling $478,000 before our fieldwork. The 930 remaining line items were incorrect and included overpayments totaling $6.2 million, which the providers had not refunded by the beginning of our audit.

The deficiencies in the 930 incorrect line items included (1) incorrect units of service, (2) Healthcare Common Procedure Coding System (HCPCS) codes that did not reflect the procedures performed, (3) unallowable services, (4) a combination of incorrect units of service and incorrect HCPCS codes, and (5) a lack of supporting documentation.

We recommended that Noridian (1) recover the $6.2 million in identified overpayments, (2) implement system edits that identify line item payments that exceed billed charges by a prescribed amount, and (3) use the results of this audit in its provider education activities.

Noridian concurred with our recommendations.