As part of a series of hospital compliance reviews, the Office of Inspector General (“OIG”) identifies target hospitals, reviews a probe sample of cases in identified risk areas and determines compliance with Medicare billing requirements. Recent results? Two major hospital systems being asked to pay back large sums of money – $6,200,000 and $1,700,000.

How does the OIG select the target hospitals? The OIG utilizes computer matching data mining and other data analysis techniques to identify hospital claims at risk for noncompliance.

How many cases does the OIG review? As with any probe review, the OIG is identifying a subset of cases in identified areas for risk of noncompliance. Based on the outcomes of the probe sample review, the OIG uses extrapolation to identify the alleged overpayment. For example, in a recent compliance review, 83 of 240 inpatient cases reviewed by the OIG were determined to be noncompliant with Medicare billing requirements totaling an overpayment of $331,831.00; with extrapolation OIG demanded repayment of $1,700,000.

Key reason cited by OIG for noncompliance? Inadequate controls to prevent incorrect billing.

Know your Data.  Most hospitals and health systems have extensive amounts of data available to them with the increased use of electronic data capture.  As indicated above, the OIG may be reviewing your organization’s data; if you are not –  you should be.

Using the most recent MedPAR data available or your internal data, our clinical team can conduct a data analysis to assess potential revenue and compliance opportunities as compared to peer hospitals in your state, region or nationally.  We can look across service lines and help pinpoint potential areas of risk.

Know, Document and TEST your internal controls. How would your organization respond to an OIG compliance review? What data and documentation could you show? What process/es are in place to assure compliance with billing requirements? If you cannot answer these questions, you need to asses, implement and regularly test internal controls.  Our Revenue Integrity Audit methodology can provide your organization the assurances and tools necessary to compliantly capture revenue.

For more information, contact us at contact@providentedge.com.