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Outpatient Outlier Payments for Short-Stay Claims

CMS makes an additional payment (an outlier payment) for hospital outpatient services when a hospital's charges, adjusted to cost, exceed a fixed multiple of the normal Medicare payment (Social Security Act (SSA) § 1833(t)(5)). The purpose of the outlier payment is to ensure beneficiary access to services by having Medicare share in the financial loss incurred by a provider associated with extraordinarily expensive individual cases. Prior OIG reports have concluded that hospitals' high charges, unrelated to cost, lead to excessive inpatient outlier payments. We will determine the extent of potential Medicare savings if hospital outpatient short stays (same day or over one midnight) were ineligible for an outlier payments. Prior to a nationwide review, we plan to perform several reviews at one or more hospitals to determine whether outpatient outlier payments to hospitals are associated with extraordinarily expensive individual cases.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
Completed Centers for Medicare & Medicaid Services Outpatient Outlier Payments for Short-Stay Claims Office of Audit Services A-06-16-01002;