Report Materials
Based on our sample results, we estimated that Medicare contractors made $1.7 million in overpayments to hospital-based inpatient psychiatric facilities (IPF) for calendar years 2006 and 2007 on behalf of beneficiaries who had been admitted to the IPFs upon discharge from the acute-care section of the same hospital. Our review found that hospital-based IPFs incorrectly coded the source of admission on 75 of 100 sampled claims. As a result, Medicare contractors made $3,000 in overpayments to the IPFs for emergency department services.
CMS makes an additional Medicare payment to an IPF for the first day of a beneficiary's stay to account for emergency department costs. However, CMS does not make this payment if the beneficiary was discharged from the acute-care section of a hospital to its hospital-based IPF. Hospitals must enter the correct code on their Medicare claim forms to ensure that the hospital-based IPF does not receive an additional payment for the costs of emergency department services that Medicare covers in its payment to the acute-care hospital.
We recommended that CMS (1) instruct its Medicare contractors to recover the $3,000 in overpayments for the sampled claims; (2) instruct its Medicare contractors to immediately reopen the nonsampled claims, review our information on these claims (which have overpayments estimated at $1.7 million), and recover any overpayments; (3) instruct its Medicare contractors to emphasize to hospital-based IPFs the importance of using the correct code to identify beneficiaries who were discharged from the acute-care section of the same hospital; (4) establish edits in the Common Working File to prevent and detect overpayments to IPFs that use incorrect source-of-admission codes on claims; and (5) consider conducting periodic postpayment reviews of claims submitted after our review to identify any claims that were billed and paid with incorrect source-of-admission codes. CMS concurred with our recommendations and described the corrective actions that it was taking or planned to take.
Notice
This report may be subject to section 5274 of the National Defense Authorization Act Fiscal Year 2023, 117 Pub. L. 263.