Mount Sinai asked to return $41.9 million in Medicare overpayments

Updated on May 4.

The Office of Inspector General at HHS said Wednesday that an audit of 2012 and 2013 claims revealed that Mount Sinai Hospital did not fully comply with Medicare billing requirements. The agency audited 261 claims and found that 110 resulted in overpayments totaling at least $41.9 million for the audit period.

Mount Sinai in New York City is required to do its own investigation of the problem going back six years, and refund the federal government all overpayments within 60 days of completing its audit, the OIG said.

The agency claims that during 2012 and 2013, Medicare paid Mount Sinai $842.4 million in both inpatient and outpatient claims. The errors amount to about 5% of all billing.

The OIG said that the hospital disagreed with the findings and recommendations. Specifically, "the hospital indicated that the majority of overpayments we identified in our draft report can no longer be recovered by the CMS and that some of these claims are also outside of a 4-year reopening period and do not need to be returned," according to the report.

Mount Sinai said in a statement that it "strongly objects" to the OIG auditors' findings, saying their analysis was "deeply flawed" and erroneously interpreted payment rules.

"All of our patients require and deserve the best care possible and our Medicare patients should never be discharged prematurely or denied necessary coverage by government auditors with no pertinent medical background," the health system said. "We reject the notion that it's appropriate for OIG auditors to substitute their judgments, made years after the fact without any patient interaction, for the thoughtful medical decisions of our highly skilled physicians."

Mount Sinai noted that 97% of the OIG's requested refunds were not analyzed by auditors.

The report said Mount Sinai officials agreed it made billing errors on 25 claims that amount to $219,523. But they are willing to pay only the portion of that amount that is within the recovery period.

The investigators said in 85 claims the hospital disputed, the agency obtained independent medical review for 77 of them, and it stands by its report and request for total repayment.

Some of the disputed errors pertain to the medical necessity of inpatient care, or coding rehab stays as inpatient care. Others are around replacing implanted devices. The agency said the hospital could have received replacements from manufacturers under warranty or at steep discounts, but billed the full price to Medicare.

The hospital says not only were its determinations correct for admissions, but if those errors did happen, it still would receive some payment for outpatient care, so it shouldn't pay the amount in the report.

The hospital is appealing the findings.