Top 3 Billing Errors for Hospitals
The Office of Inspector General (OIG) is recommending Rush University Medical Center, Chicago, Ill., refund $10.2 million in Medicare overpayments based on an audit sample of 120 inpatient and outpatient claims. Rush allegedly did not fully comply with Medicare billing requirements for 57 of the claims, resulting in overpayments of $814,150 for the audit period (2014-2015).
The OIG review focused on the risk areas that have been identified during prior reviews at other hospitals:
- Inpatient rehabilitation claims
- Inpatient claims billed with high-severity-level diagnosis-related group (DRG) codes
- Outpatient claims billed with modifier 59
Incorrectly Billed Inpatient Rehabilitation Facility Services
The Medicare Benefit Policy Manual states that the inpatient rehabilitation facility (IRF) benefit is designed to provide intensive rehabilitation therapy in a resource intensive inpatient hospital environment for patients who, due to the complexity of their nursing, medical management, and rehabilitation needs, require and can reasonably be expected to benefit from an inpatient stay and an interdisciplinary team approach to the delivery of rehabilitation care (Pub. 100-02, chapter 1, section 110-110.1).
For IRF care to be considered reasonable and necessary, the documentation in the patient’s IRF medical record must demonstrate a reasonable expectation that, at the time of admission to the IRF, the patient:
(1) required the active and ongoing therapeutic intervention of multiple therapy disciplines;
(2) generally required an intensive rehabilitation therapy program;
(3) actively participated in, and benefited significantly from, the intensive rehabilitation therapy program;
(4) required physician supervision by a rehabilitation physician; and
(5) required an intensive and coordinated interdisciplinary approach to providing rehabilitation (Pub. 100-02, chapter 1, section 110.2).
A primary distinction between the IRF environment and other rehabilitation settings is the intensity of rehabilitation therapy services provided in an IRF. The information in the patient’s IRF medical record must document a reasonable expectation that, at the time of admission to the IRF, the patient generally required the intensive rehabilitation therapy services that are uniquely provided in IRFs (Pub. 100-02, chapter 1, section 110.2.2).
For 46 of the sampled inpatient claims, Rush allegedly incorrectly billed Medicare Part A for beneficiary stays that did not meet Medicare criteria for the higher acute inpatient rehabilitation level of care.
Incorrectly Billed DRG Codes
For five of the sampled inpatient claims, Rush allegedly billed Medicare with an incorrect DRG code.
Insufficiently Documented Services
For four of the 30 sampled outpatient claims, Rush allegedly incorrectly billed Medicare for services that were not supported in the medical record. Rush stated that two of these errors occurred because of user error.
Incorrectly Billed Outpatient Services With Modifier 59
The Manual states: “The ‘-59’ modifier is used to indicate a distinct procedural service…. This may represent a different session or patient encounter, different procedure or surgery, different site, or organ system, separate incision/excision, or separate injury (or area of injury in extensive injuries)” (chapter 23, section 22.214.171.124).
For two of the 30 sampled outpatient claims, Rush allegedly incorrectly billed Medicare for procedure codes, appended with modifier 59, that were already included in the payments for other services billed on the same claim or that did not require modifier 59. Rush stated that these errors occurred because of user error.
For the most part, Rush disagreed with the OIG’s findings and recommendations.
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