Uncovering Healthcare Profitability

Payers increasing scrutiny of coding compliance

In September 2014, the U.S. Dept. of Health and Human Services’ Office of the Inspector General (OIG) published its audit of Tulare Regional Medical Center, an acute care hospital in California. In its findings, federal investigators determined the “hospital did not comply with Medicare billing requirements for all 10 of the outpatient surgery claims we reviewed, resulting in an overpayment of $178,647,” according to the final OIG report.

As a result of the coding mistakes, the Central Valley hospital gave back the $180,000 to Medicare, public filings show, and paid an undisclosed amount to internally address the underlying revenue cycle management issues that caused the problem. And Tulare’s woes are hardly unique among outpatient providers. Previous OIG investigations during the past decade have uncovered widespread coding compliance issues in outpatient surgery facilities across the United States. In fact, in a 2010 OIG report focusing only on ambulatory surgery center (ASC) services for skilled nursing facility (SNF) patients, federal auditors estimated that “Medicare contractors nationwide made at least $6.6 million in overpayments to ASCs for services subject to consolidated billing.”

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