Followup Review on Medicare Claims for Outpatient Services Provided During Inpatient Stays

A prior OIG review (A-09-16-02026) identified that Medicare inappropriately paid acute-care hospitals for outpatient services they provided to beneficiaries who were inpatients of other facilities (i.e., long-term care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs), and critical-access hospitals). It was found that none of the $51.6 million we reviewed, representing 129,792 claims, should have been paid because the inpatient facilities were responsible for payments. In addition, beneficiaries were held responsible for unnecessary deductibles and coinsurance totaling $14.3 million paid to acute-care hospitals for those outpatient services. In addition, it was found that Medicare overpaid acute-care hospitals because the common working file (CWF) edits that should have prevented or detected the overpayments were not working properly.

Federal regulations state that the inpatient hospital services provided to Medicare beneficiaries are paid under Medicare Part A. These include inpatient stays at LTCHs, IRFs, and IPFs. Federal regulations also state that Medicare does not pay any provider other than the inpatient hospital for services provided to the beneficiary while the beneficiary is an inpatient of the hospital. The hospital must furnish all necessary covered services to the beneficiary either directly or under arrangements. This provision also applies to LTCHs, IRFs, and IPFs. This audit is a followup to determine whether CMS corrected the CWF edits and ensured that the edits were working properly.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
Completed (partial)	Centers for Medicare and Medicaid Services	Followup Review on Medicare Claims for Outpatient Services Provided During Inpatient Stays	Office of Audit Services	W-00-21-35861; A-09-22-03007	2023