Review of Outpatient Psychiatric Services Provided by the Danbury Hospital for Fiscal Year Ending September 30, 1997

EXECUTIVE SUMMARY:

This final report points out that the Danbury Hospital did not establish or follow existing procedures for the proper billing of outpatient psychiatric services. Specifically, the Hospital made claims for psychiatric services not certified by a physician in accordance with Medicare requirements, not properly supported by medical records, or not covered by Medicare. We estimate, based on a statistical sample, that at least $750,790 in outpatient psychiatric claims did not meet the Medicare requirements for reimbursement. We also identified an additional $126,480 in costs (unallowable advertising, meals, and travel) ineligible for Medicare reimbursement claimed by the Hospital on its Fiscal Year 1997 cost report for outpatient psychiatric services. In addition to financial adjustments, we recommended that the Hospital strengthen its procedures to ensure that charges for psychiatric services are covered and properly documented. We also recommended that the Hospital establish nonreimbursable cost centers or otherwise exclude costs related to noncovered services from its Medicare cost reports.

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