Medicare's three-year pilot project to audit hospital, physician and other provider payments found that CMS overpaid for care by more than $980 million, thanks largely to poor records, billing errors and medically unnecessary care. One of the most frequently cited reason for excess pay to hospitals: Patients who did not need to be admitted to the hospital.
As Medicare's Recovery Audit Contractor program expands nationwide, one-day hospital stays—considered an indicator that outpatient care may have been appropriate—are a potentially costly target, say industry insiders and revenue experts.
“It's kind of low-hanging fruit,” said Paul Shoemaker, president and chief executive officer of American Hospital Directory, which analyzes Medicare spending. The truncated hospital stays have long invited scrutiny, he said. The HHS' inspector general's office singled out one-day hospital visits for scrutiny as early as 2000. “It's the obvious first step” for auditors, he said.
And one that could be costly. Hospitals face forfeiting Medicare reimbursement for all but the ancillary services for patients who auditors say are improperly admitted, according to the American Hospital Association.
SEE RELATED CHARTS:
Medicare spent $8.2 billion in fiscal 2008 on patients hospitalized for a single day, nearly one-fifth of the federally funded program's reimbursement for patients sent home after a hospital stay, American Hospital Directory figures show. “It's a significant amount of money at risk,” said Leatrice Ford, the CEO of ConsultCare Partners.
Ford said auditors' criteria for rejecting one-day hospital stays varied under the pilot and it's unknown what percentage of the more than 40,000 successful appeals by providers as of September—or 7.6% of all overpaid bills identified by auditors—were related to one-day hospital stays.