From 2013 to 2014, Lafayette General Medical Center overbilled Medicare $4.4 million, the U.S. Department of Health and Human Services Office of Inspector General says in a report released this week. The OIG says the hospital reimbursed Medicare $287,000 while the audit was taking place but claims the hospital should refund the remaining $4.1 million in overpayments.
HHS’ OIG, which notes that the LGMC analysis is part of a series of hospital compliance reviews, found the hospital properly billed 34 of the 103 inpatient claims it analyzed and all 31 of the outpatient claims. That means OIG found it out of compliance with 69 inpatient claims resulting in overpayments of $865,000 for the audit period. Based on that sample, OIG estimates the overpayments to have been at lease $4.4 million.
“These errors occurred primarily because the hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors,” according to the report.
LGMC only acknowledged billing errors in 18 of 69 claims, the OIG says, maintaining that the investigators continue to disagree with the hospital’s position. “We obtained an independent medical review of all these claims for medical coding errors, and our report reflects the results of that review,” the report notes. “The contractor examined all of the medical records and documentation submitted and carefully considered this information to determine whether the Hospital billed the claims according to Medicare requirements.”
In a prepared statement, LGMC points out that the OIG report does not question the quality of care or medical necessity of treatment provided by the hospital, while also noting the complexity of the Medicare billing system.
“Lafayette General would like the public to know that these were not fraudulent claims. Appropriate care was delivered to our patients and a bill was filed with Medicare. We are operating within the guidelines set up by the government and there were zero cases of abuse within the system. In only a few instances, LGMC made clerical errors in attempting to navigate a complex coding system,” the statement reads.
The hospital says it disagrees with more than 85 percent of the OIG’s conclusions: “We continue to maintain that our claims were properly billed and will appeal each claim, one-by-one, until resolution is achieved.”
According to the hospital, the dispute primarily centers on inpatient versus outpatient billing. “We assert that the guidelines for inpatient billing are vague and often unclear,” the hospital continues. “These types of claims are billed based upon the medical judgment made by a physician at the time of treatment and the patient’s condition at that moment. LGMC fully supports the medical judgement of our physicians in determining what is best for the patient at the time care is delivered.”
LGMC says the appeals process could take two to three years to complete.
The local hospital is certainly not alone in its Medicare-billing troubles, as the OIG is battling other major medical centers in the state that have filed appeals. Louisiana, it seems, is the nation’s leader in Medicare overbilling.
Louisiana tops the list of states with above average improper payment rates, overbilling in 19.4 percent of cases — well above the national error rate of 12.1 percent — for a total of $1.25 billion lost from the Medicare Trust Fund just from Louisiana. The Council for Medicare Integrity, a nonprofit group that advocates for proper Medicare billing, says the state’s overbilling is part of a nationwide problem. Since 2011, the group reports, the rate of Medicare fee-for-service improper payments has risen steadily from 8.6 percent to 12.1 percent, with a loss of more $40 billion annually to the Medicare Trust Fund.
Medicare Trustees have estimated that the Medicare Trust Fund will be insolvent by 2030 — or that the expenditures of the program will outpace the fund’s assets by then.
In an effort to reduce waste within Medicare, the Recovery Audit Contractor Program was put in place by Congress in 2009 to review Medicare FFS post-payment claims to identify and recover improper payments made to providers. The program, which is separate from the audits conducted by the HHS OIG, currently reviews only 0.5 percent of a provider’s post-payment inpatient claims, meaning 99.5 percent of these claims go un-reviewed.
Before the RAC Program was cut back due to provider complaints, according to the Council for Medicare Integrity, it was credited with returning $10 billion back to Medicare and extending the Trust Fund’s solvency timeline by two years.
As recently as January, however, the Congressional Budget Office predicted the insolvency date to be 2026 — just 10 years from now.
Read the full report on LGMC here.