Review of the Health Care Financing Administration Philadelphia Regional Office's Efforts to Identify and Recover Overpayments for 1-Day Inpatient Hospital Stays in Pennsylvania

EXECUTIVE SUMMARY:

The Health Care Financing Administration (HCFA) Philadelphia regional office (RO) reviewed whether hospitals in Pennsylvania were correctly billing Medicare for 1-day inpatient hospital stays. The RO found that 394 claims (about 26 percent of those reviewed) were paid in error resulting in overpayments totaling about $4.8 million. This final report points out that $1.65 million of the overpayments were not collected by the fiscal intermediaries (FI) because in some cases a specific overpayment adjustment was not automatically recovered if it was processed after the related hospital cost report was settled. Based on our finding, the FIs are in the process of collecting the $1.65 million. We recommended, among other things, that HCFA monitor the FIs collection efforts to ensure the overpayments are recovered, and direct the FIs to implement procedures to ensure future overpayment adjustments made after the providers' cost reports are settled are collected from providers.