A federal audit of JFK Medical Center in Atlantis found that it overbilled Medicare by $4.4 million.
The 460-bed hospital, part of HCA (NYSE: HCA), had its 2009 and 2010 Medicare billings reviewed by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG), which released the report Wednesday. It recommended that the government attempt to recoup the money. The hospital is contesting the findings.
The auditors selected a $25.2 million portion of potentially erroneous claims out of $208 million in Medicare claims filed by the hospital for those years. Of that, 200 claims for $1.32 million were closely examined as a random sample.
While the OIG stated that JFK met Medicare billing requirements for the majority of its claims, it did not comply for 70 inpatient claims, totaling $293,869, out of the sample group that was examined. The most common error was billing claims as inpatient when they should have been considered outpatient observation stays, which have a lower reimbursement rate. In some cases, the wrong diagnosis groups were assigned to the claims.
The OIG extrapolated those findings to the $1.32 million sample size – assuming the same ratio of claims were overbilled – and declared that the hospital owes $4.4 million.
“Overpayments occurred primarily because the hospital did not have adequate controls to prevent incorrect billings of Medicare claims within the selected risk areas that contained errors,” the OIG stated in its study.
In its response, JFK said the government should be barred from recovering the alleged overpayments from 2009 because they are more than three years old, which is the deadline for such action. It also contested that 39 of those 70 inpatient claims were overbilled. In many of these cases, the patients’ physicians ordered that they be admitted to the hospital, and JFK simply followed their instructions, the hospital stated.
In addition, JFK said it’s not fair to extrapolate the alleged errors found to the larger group of claims to inflate the overbilling findings.
“Such extrapolation is erroneous as a matter of law, statistical integrity and fundamental fairness,” JFK stated in its official response to the OIG.
JFK added that it would strengthen its Medicare billing compliance.