HHS finds $2.2M in billing errors at Cedars-Sinai

Administrators at Los Angeles' largest community hospital, Cedars-Sinai Medical Center, were well aware of the flaws in their inpatient admissions process before an audit report Wednesday from HHS' inspector general's office publicly pointed them out.

The 892-bed hospital posted a case manager in its emergency department last year to review all decisions to admit so-called “short-stay” inpatients, and that person now has access to standardized admissions criteria software from InterQual to evaluate make those decisions, hospital administrators wrote to the OIG.

On Tuesday, the HHS fiscal watchdog reported that Cedars-Sinai had incorrectly billed Medicare 409 times between 2008 and 2011, and recommended the hospital repay $2.2 million (PDF) to the government. Of those erroneous bills, more than 100, totaling $1.1 million, were for were for “short-stay” patients whose stays should have been classified as outpatient or “observation” care.

Hospital officials didn't dispute the findings that the bills contained “some form of error that affects reimbursement,” but a written response to the audit didn't say whether the hospital agreed to pay back the money.

Hospital officials declined to comment beyond the written response contained in the audit.

The inspector general's office has been conducting focused hospital audits on risk-prone Medicare bills for years now; more than 80 hospitals have been selected for review, and the program is ongoing. In an interview with Modern Healthcare last month, Inspector General Daniel Levinson said 25 hospitals are being selected for review this year, though some of the targets don't know it yet.

Among the 50 or so audits that have been published so far, Cedars-Sinai had among the largest number of erroneous claims and one of the highest payback amounts of any hospital so far. The average hospital audit had returned $480,000 to Medicare, as of last October.

Cedars-Sinai Chief Compliance and Privacy Officer David Blake wrote to the OIG that the hospital had already started correcting many of the problems turned up by the report before the audit results were known.

The largest single problem area in the audit was the short-stay inpatients, whose bills are now being reviewed with increased attention toward admitting decisions and evidence-based criteria. Dollar-wise, the second-biggest issue identified involved 61 Medicare bills for patients who were transferred for further care to their homes or to other hospitals.

With patient transfers, the hospital is supposed to split some of its reimbursements with other entities that accept the moved patient, but Cedars-Sinai's bills didn't reflect transfers and resulted in the hospital receiving $548,000 too much, the audit said. However, Blake wrote that the hospital had no direct way of knowing when patients made unplanned visits to other hospitals, and has therefore hired a consultant to scrutinize claims for transfers.

The hospital also received $293,000 too much in reimbursement for the cancer drug Lupron, but it has since started using accurate billing codes and a new computer system for its pharmacy billing, Blake wrote.

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