Sixty hospitals received $502 million in
overpayments from Medicare during fiscal years 2011-14, according to Bloomberg Law,
which cited a recent report from
HHS' Office of Inspector General.
The overpayments at issue stemmed from the
criteria CMS uses to review outlier payments, which are made when cost of care
exceeds a threshold set by CMS. CMS requires Medicare administrative
contractors to review and reconcile the payments only if the following criteria
are met: 1) the actual cost-to-charge ratio is 10 percentage points higher or
lower than the previous cost-to-charge ratio; and 2) the outlier payments
exceed $500,000.
CMS didn't detect the outlier overpayments
from fiscal years 2011-14 because they didn't meet the 10-percentage-point
threshold, according to the OIG. Most of the cost reports reviewed by the OIG
had a ratio of less than 5 percent.
Based on its findings, the OIG recommended
that CMS require reconciliation of all hospital cost reports with outlier
payments. In comments on the OIG's draft report, CMS concurred with the OIG's
recommendation and said it will consider whether to propose any modifications
to its outlier reconciliation policy in future rulemaking.
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