Review of Medicare Outlier Payments Made to Orthopaedic Hospital for the Period August 1, 2000 Through December 31, 2001

The objective of this review was to determine whether Orthopaedic Hospital's (the hospital's) outpatient claims with outlier payments were billed to Medicare in accordance with applicable laws and regulations.  Based on our review of 35 judgmentally selected outpatient prospective payment system (OPPS) claims, we found the hospital incorrectly billed Medicare on 7 claims.  Due to the billing errors, the hospital was underpaid a net amount of $15,240.  The billing errors occurred because the hospital did not correctly implement the OPPS requirement concerning the number of units to use when billing Medicare for drugs.  We recommended that the hospital strengthen its billing procedures and resubmit the claims found to be in error to the fiscal intermediary for adjustments. The hospital concurred with our findings and recommendations.