Review of High-Dollar Inpatient Claims Processed by Cahaba Government Benefit Administrators Fiscal Intermediary No. 00011 for the Period January 1, 2004, Through December 31, 2006

During calendar years 2004-2006, Cahaba Government Benefit Administrators Fiscal Intermediary No. 00011 (Cahaba GBA) overpaid hospitals in Iowa $17,000. Contrary to Federal guidance, hospitals reported excessive units of service and charges that resulted in inappropriate payments. Generally, hospitals attributed the overpayments to incorrect claims data. Cahaba GBA made the incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place to detect and prevent the overpayments.

We recommended that Cahaba GBA recover the $17,000 in identified overpayments, use the results of this audit in its provider education activities related to data entry procedures and proper documentation of charges, and consider implementing controls to identify and review all payments greater than $200,000 for inpatient services. In written comments on the draft report, Cahaba GBA stated that it no longer had this workload and therefore could not act upon our recommendations. Subsequently, Wisconsin Physician Services acknowledged that it had assumed responsibility for the State of Iowa and associated Cahaba GBA processing activity earlier in 2008. Wisconsin Physician Services stated that it intended to recoup the overpaid amounts, use the results of the audit in future educational activities, and evaluate current controls to determine whether additional controls are needed.