The Centers for Medicare and Medicaid Services overpaid specialty hospitals that are exempt from prospective payment systems by $800 million in 2000, or about 9.2% of Medicare's total payments to such hospitals, according to a new report by HHS' inspector general's office. Inpatient claims at rehabilitation, psychiatric, long-term acute-care and critical-access hospitals were not being routinely reviewed for medical necessity, the office found. "The number of providers, the amount of Medicare reimbursement going to them, and the sizable payment error rate associated with the PPS-exempt inpatient services makes it critical that systematic oversight occur," the OIG said in its report. Medicare paid a total of about $8.7 billion to 3,700 PPS-exempt specialty hospitals in 2000. During the inspector general's study, the CMS directed fiscal intermediaries to begin medical reviews of claims for PPS-exempt inpatient services. But the inspector general's office said it remains concerned about oversight since "additional funds were not awarded in support of the additional responsibility." -- by Julie Piotrowski
Study finds Medicare overpaid specialty hospitals
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