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OIG Issues Report on Improper Medicare Payments for Bone Marrow and Stem Cell Transplants.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued a report on its audit of claims for bone marrow and stem cell transplants.  The Centers for Medicare & Medicaid Services (CMS) uses a software program to determine payment amounts and detect billing errors for various hospital services.  According to the report, improper Medicare payments for these procedures resulted in overpayments of $6.3 million during more than a three and a half year period.  Further, the OIG determined that 133 of the 143 claims selected for review did not comply with Medicare requirements.

The OIG made the following findings:

  • Hospitals incorrectly billed Medicare Part A for beneficiary stays for stem cell transplants that should have been billed as outpatient or outpatient observation services;
  • Most claims lacked clinical evidence supporting a necessity for inpatient care before, during, or after the transplant procedures;
  • Hospitals used incorrect diagnosis or procedure codes and billed Medicare with incorrect Medicare Severity Diagnosis-Related Groups (MS-DRGs); and
  • Medicare overpaid hospitals due to a lack of existing controls to prevent overpayments.

The OIG recommended that CMS:

  1. Direct Medicare contractors to recover over $4.5 million in identified overpayments for incorrectly billed claims within the 3-year recovery period;
  2. Work with contractors to notify providers of potential overpayments outside the recovery period;
  3. Review inpatient claims for stem cell transplants occurring outside the audit period;
  4. Strengthen controls related to MS-DRGs for stem cell transplants; and
  5. Educate hospitals on the appropriate billing of stem cell transplants.

CMS partially concurred with the OIG’s first recommendation and concurred with the remaining four recommendations.

The OIG report is available at:

Department of Health and Human Services Office of Inspector General.  “Medicare Did Not Pay Selected Inpatient Claims for Bone Marrow and Stem Cell Transplant Procedures in Accordance with Medicare Requirements.”  A-09-14-02037.  10 Feb. 2016.