The University of Miami Hospital will have to refund $3.7 million to Medicare after a federal audit of the hospital’s billing practices found the hospital overbilled in 2009 and 2010, according to a report released Tuesday by the U.S. Department of Health and Human Services Office of Inspector General.
UM issued a statement Tuesday saying the university is working “with the relevant federal agencies to determine the correct amount owed for billing inaccuracies.”
In July, UMH Chief Financial Officer Darryl Caulton filed a letter contesting the inspector general’s method for calculating the refund to Medicare, saying the hospital “disagrees” with the way the figure was determined.
The federal audit covered $22.8 million in Medicare payments to the hospital for 2,194 claims that HHS officials considered “at risk’’ for billing errors. From that pool of claims, investigators randomly selected for review a sample of 200 inpatient claims for services between April 2009 and December 2010 that totaled $2.9 million in payments.
Investigators found that although the hospital complied with Medicare billing requirements for the majority of the 200 claims reviewed, 68 claims — representing $524,009 in overpayments — did not comply with agency rules.
Based on those findings, investigators extrapolated the total amount of overpayments to be approximately $3.7 million.
“Overpayments occurred primarily because the hospital did not have adequate controls to prevent incorrect billing of Medicare claims within the selected risk areas that contained errors,’’ according to the inspector general’s report.
Investigators identified the questionable claims using computer matching, data mining and analysis of inpatient claims.
According to the report, the hospital overbilled Medicare in five ways:
First, hospital administrators incorrectly billed Medicare for patient stays that should have been billed either as outpatient or outpatient with observation services.
“These errors occurred because of weaknesses in the hospital’s review process and turnover in case management leadership,” according to the report. Investigators estimated the errors caused Medicare to overpay about $448,000.
In addition, investigators found that in three cases the hospital billed Medicare separately for a patient’s discharge and readmission on the same day — even though those charges are supposed to be combined into a single claim. The three cases, between April 2009 and December 2010, caused overpayment of about $33,645, the report found.
The third type of overbilling came through use of incorrect diagnostic codes, the report said, which occurred in five of the 200 cases reviewed, and led to overpayments of $17,475.
UM hospital administrators also erred by billing Medicare for three patient discharges that should have been coded as transfers because the patients were readmitted to other hospitals the same day they were released from UM Hospital. That led to another $16,407 in overpayments, according to the report.
Lastly, HHS investigators said UM overbilled Medicare by about $8,500 for one claim because the hospital didn’t get an available credit for a replaced medical device.
According to the report, the hospital may be able to re-bill Medicare for some of the claims that were found to be overpaid.