Review of Outlier Payments Made to Rhode Island Hospital Under the Outpatient Prospective Payment System For The Period August 1, 2000 Through June 30, 2001

EXECUTIVE SUMMARY:

The objective of this review was to determine whether outpatient claims with outlier payments were billed in accordance with Medicare laws and regulations.  We found that a weakness in RIH's internal controls for billing observation services resulted in excessive or unwarranted Medicare OPPS outlier payments to the hospital.  We reviewed a judgmentally selected sample of 35 outpatient hospital claims with outlier payments totaling $93,259.  Our sample represented less than 2 percent of the hospital's OPPS outlier claims and about 21 percent of the outlier payments.  Based on our review, we found that overpayments totaling $13,275 were made for 21 claims because the hospital did not bill for observation services in accordance with Medicare regulations.  Specifically, the hospital billed charges for observation services that were unsupported, not medically necessary, or excessive.  The RIH has generally concurred with our findings and recommendations.

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