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CMS claims Medicare overpayments for post-acute-care transfers

The Department of Health and Human Services Office of the Inspector General recently released a report finding Medicare improperly paid the majority of inpatient claims for beneficiaries who needed home health services within three days of hospital discharge. The error is allegedly due to misuse of the codes involving post-acute-care and the transfer policy. Due to these findings, the agency has encouraged the Centers for Medicare and Medicaid Services (CMS) to recoup these funds.

How much of an overpayment is at issue?

Researchers with the report state that in a sample size of 150 inpatient claims, Medicare only got 3 right. That means, in this sample size, CMS would seek repayment of 147 of the paid claims.

The study found $722,288 in overpayments in the research sample and estimates that over a two-year period CMS overpaid more than $267 million in these types of claims. From 2016 through 2017, the group estimates overpayment due to the transfer policy may be almost $950 million and involve 89,213 claims.

What went wrong?

CMS states it improperly paid the claims because hospitals wrongly coded the inpatient claim as a discharge to home with health services, home health not related to inpatient stay or home health not within three days of discharge.

What comes next?

The OIG officially recommended the CMS act to recovery these funds. It also stated the agency should reprocess any remaining claims and educate its providers to reduce the risk of similar errors in the future.

As a result, healthcare providers could receive an overpayment determination with a request to pay thousands in received claims as well as additional fines and penalty fees.

What options are available for those who are contacted about an overpayment?

These decisions are not final. Those who receive an overpayment determination can fight back. An overpayment appeal is one option. This process reviews the factual and legal bases behind the overpayment determination and can result in a reduction or dismissal of the claim, including any additional fines.