Is this the tipping point we’ve been hoping we wouldn’t see? Are you about to get audited by the OIG?

By Al Brander CSO, SpendMend

In the most direct terms, the Centers for Medicare & Medicaid Services (CMS) has been asked by the Office of the Inspector General (OIG) to increase their efforts when it comes to recouping Medicare overpayments from U.S. hospitals.

Do you work in healthcare? If so, then you are 100% on their list of targeted hospitals.

This isn’t exactly new news.  We’ve been reading about, and reviewing the results from CMS and OIG audits for the past several years.  The results are many but the story is always the same. Medicare overpays U.S. hospitals. Hospitals don’t always pay it back.

In the mid-teens, CMS and OIG put plans in place to audit U.S. hospitals in an attempt to recoup billions of dollars.  And then COVID-19 got in the way.  When the world returned to “normal” – whatever that is – and audits could resume, we quickly learned that the problem had gotten worse.  The response? CMS and OIG needed to the redouble their efforts and audit more hospitals and more diligently.

On October 27th, a federal watchdog agency found CMS has not been doing enough to claw back the Medicare overpayments. The watchdog reviewed audits for 12 hospitals between 2016 and 2018 that discovered 387 improperly paid Medicare claims totaling $82 million in overpayments. Of which, hospitals appealed 229, or 59% of claims.

OIG has recommended that CMS should enforce repayment of the claims, but that doesn’t seem to be happening. It their report the watchdog admitted they “could not identify the actions CMS had taken to ensure recommendations were implemented,” because CMS had not provided enough information on the status of the appeals, nor did they provide information on the reason for the appeals. The report further stated that if CMS did not follow all recommendations then they would risk, “not capturing all overpayments.”

The report has been submitted, but the matter is not finished, not by a long shot.  To me, the posturing and the messaging of both the watchdog agency and OIG makes it clear that there is a massive amount of overpayments outstanding and due the U.S. government – and the government wants it back.  And why shouldn’t they?  In many cases, a formal audit is all that stands between the vague knowledge of these dollars and the collection of these dollars. So you already know where this is going…

U.S. Hospitals need to be quite thoughtful about their response to the recent report. Considering the scale of this growing issue and the potential impact that these dollars could have on several governmental budgets, it is a very safe bet that The Department of Health and Human Services’ Office (HHS) and OIG are going to strongly recommend more audits and closer attention to recouping Medicare payments.

So if you’ve read this far then you might be wondering what does this mean to you? This is an important question to consider. An CMS/OIG audit of your hospital does not simply mean you may have to pay back some overpayments.  An audit is invasive and will require time from several members of your staff. Time that you don’t have.  The results may bring to light key non-compliance issues that can get your company placed on costly exclusion lists and may spur additional audits.  And if any overpayments are found then you will also face additional costs through fees, penalties and fines.

The best approach is to contact consultants about potential OIG audits and to put a defensive plan in place or to conduct a mock audit and gain a clear understanding of your vulnerabilities.

At this point we should be very clear that SpendMend cannot help with every facet of an OIG audit, but we have built out a number of tools that you can use to safeguard a particularly vulnerable area of your Medicare payment landscape – the warranty credits you receive related to medical device explants. Please reach out to a SpendMend rep for any questions about how we can help you company save time and avoid a costly audit outcome.