OIG: Sloppy billing to blame in $254 million Cleveland Clinic overpayments

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Cleveland Clinic was overpaid $253,593 ($184,568 outpatient and $69,025 inpatient) for procedures that included the replacement of medical devices during 2008 and 2009, and beneficiaries incurred $6,000 in additional co-payment costs, according to a report from the Office of Inspector General (OIG).

“The overpayments and additional co-payment costs occurred because the clinic did not have controls to report the appropriate billing codes and charges to reflect credits due from manufacturers,” the report stated.

OIG audited the 1,300-bed acute care hospital’s claims and found lack of full compliance with Medicare requirements for obtaining credits available from manufacturers and for reporting the appropriate billing codes and charges to reflect the credits it received.

National Government Services (NGS), the organization that processes and pays the clinic’s Medicare claims, paid the clinic a total of $11.2 million for 1,261 outpatient procedures that included the replacement of medical devices for the two-year period ending December 31, 2009, and $10 million for 407 claims for inpatient claims covering the one-year period ending September 30, 2009.

For 1,247 outpatient claims and 397 inpatient claims for the audit periods, there were no available credits or the credits were partial credits received from manufacturers that did not represent at least 50 percent of the cost of the devices and therefore were not reportable, the report additionally stated. For the 24 remaining claims, credits were available from manufacturers and reportable. However, for five outpatient and one inpatient claims, the clinic did not obtain credits that were available under the terms of the manufacturers’ warranties.

OIG recommended that Cleveland Clinic:

• Adjust the 24 erroneous claims and resubmit them to NGS to correct the overpayments totaling $253,593 and overstated co-payment costs totaling $5,615;
• Strengthen its procedures for identifying and obtaining the credits available from manufacturers; and
• Establish procedures in accordance with Medicare requirements for reporting to NGS the credits for replaced devices that Cleveland Clinic is entitled to, regardless of whether it received the credits.

OIG filed the report Oct. 24 and released it to the public last week.