In a six-page letter addressed to HHS auditors, Caulton, the hospital’s CFO, said the institution accepts the findings and will tighten internal controls by using an electronic quality review process. Caulton also said the hospital will improve billing controls, conduct quarterly audits of short stay accounts and place an automatic hold on Medicare claims for patients staying less than three days until the claims are released by a case manager.
But Caulton took issue with the methodology used to calculate the refund amount, and requested that HHS reconsider the sum.
He said that some of the questionable claims may be eligible for re-billing and that federal officials should not have used a sample of cases to estimate the refund amount without first resolving the re-billing question.
In the letter, Caulton noted that other audits by the inspector general “almost without exception” recommended repayment solely of the audited cases — not estimates based on a sample of claims.
“There is no reasoned basis for treating UMH differently,’’ Caulton wrote.
Donald White, a spokesman for the HHS inspector general, said extrapolation is an “extremely common” practice in determining Medicare overpayments. But he added that the refund amount is a recommendation.
The next step, White said, is for UM administrators to negotiate a repayment amount with the Center for Medicare and Medicaid Services, which administers the programs. The process usually takes 60 to 90 days, he said, but “given the government shutdown, it could be longer.”
The university bought the 560-bed former Cedars Medical Center in 2007 for $275 million. The purchase was one of several high-profile steps in the expansion of the Miller School of Medicine that included hiring more than 100 renowned researchers and creating a biotech research park to boost the school’s national profile.
The ambitious moves elevated UM’s medical school to the national stage, but they also may have seriously hampered it. In spring 2012, after suffering a $24 million loss for the first six months of that fiscal year, the medical school laid off more than 900 full- and part-time employees.
In August, UM and Jackson ratified their annual operating agreement for $102.5 million, the lowest-budgeted agreement in seven years. In the agreement, a binding letter of intent commits both institutions to multi-year exclusivity provisions for transplant, trauma, pediatrics and obstetrics services.