Review of High-Dollar Payments for Outpatient Services Processed by First Coast Service Options, Inc., for the Period January 1, 2004, Through December 31, 2005

Of the 40 high-dollar payments ($50,000 or more) that First Coast Service Options, Inc. (First Coast), made for outpatient services for calendar years (CY) 2004 and 2005, 23 were appropriate. The remaining 17 payments included overpayments totaling $1.5 million, which the hospitals had not refunded by the beginning of our audit. The hospitals received these overpayments by billing excessive units of service. First Coast made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place during CYs 2004 and 2005 to detect and prevent the overpayments.

We recommended that First Coast recover the $1.5 million in identified overpayments. In written comments on our draft report, First Coast stated that it had adjusted the identified outpatient claims and initiated its standard overpayment recovery procedures to recover the overpayments.