The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a report urging the Centers for Medicare & Medicaid (CMS) to strengthen its billing requirements for canceled elective surgery admissions that were not reasonable or necessary. The OIG estimated that Medicare made $38.2 million in payments for Part A inpatient hospital payments during calendar years 2009 and 2010. Out of a 100 claim sample set, Medicare made payments for 80 claims involving canceled elective surgeries that were not reasonable or necessary, totaling $346,000.00.
The OIG found that these payments occurred because:
- Hospitals were unsure of Medicare billing requirements for billing canceled inpatient surgeries.
- CMS billing requirements are too restrictive, particularly with respect to a change in a beneficiary’s status from inpatient to outpatient after discharge.
- Hospitals do not always have adequate utilization review controls to assist in determining whether admissions were reasonable and necessary after elective surgeries are canceled.
The OIG made the following recommendations to CMS:
- Adjust the 80 sampled claims representing overpayments to the extent permitted by law.
- Strengthen guidance related to the Medicare rule that a clinical condition requiring inpatient care must exist to bill Part A for elective surgeries that were canceled.
- Work with the OIG to resolve the nearly 11,000 remaining non-sampled claims to recover overpayments to the extent feasible under the law.
- Instruct Medicare contractors to emphasize to hospitals the need for greater utilization review controls for claims that include admissions for elective surgeries that were canceled.
CMS generally agreed with these recommendations.
The OIG report on strengthening billing requirements for canceled elective surgeries is available at:
Department of Health and Human Services Office of Inspector General. “Medicare Could Save Millions by Strengthening Billing Requirements for Canceled Elective Surgeries.” A-01-12-00509. 5 Aug. 2013.