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Medicare Outpatient Outlier Payments for Claims With Credits for Replaced Medical Devices

CMS requires hospitals to submit a zero or token charge when they receive a full credit for a replacement device, but CMS does not specify how charges should be reduced for partial credits. CMS makes an additional payment (an outpatient outlier payment) for hospital outpatient services when a hospital's charges, adjusted to cost, exceed a fixed multiple of the normal Medicare payment. 42 CFR § 419.43(d). Prior OIG reviews focused on finding unreported credits for medical devices and recommended that CMS recoup Medicare funds for the overstated ambulatory payment classification payment only. This audit focuses on overstated Medicare charges on outpatient claims that contain both an outlier payment and a reported medical device credit. We will determine whether Medicare payments for replaced medical devices and their respective outlier payments were made in accordance with Medicare requirements.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
January 2019 Centers for Medicare & Medicaid Services Medicare Outpatient Outlier Payments for Claims With Credits for Replaced Medical Devices Office of Audit Services W-00-19-35819 2019