Review of Outpatient Observation Services Billed to medicare by Exempla Lutheran Medical Center Wheat Ridge, Colorado

EXECUTIVE SUMMARY:

The objective of this review was to determine whether outpatient observation services billed by the Hospital met the Medicare reimbursement requirements.  Our review covered service dates from January 1, 1996 to December 31, 1999.  During the period, the Hospital submitted charges for observation services totaling $1,323,568 on 2,637 claims.  We reviewed a statistical sample of 100 claims containing observation services and determined that 63 claims did not meet Medicare requirements.  The Hospital billed Medicare for observation services that did not meet Medicare criteria, resulting in an estimated overpayment of $165,125.  We recommended the Hospital reimburse Medicare the overpayment  of $165,125.