Challenging the Six-Year Lookback

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently conducted an audit of Mount Sinai Hospital in New York City. After looking at a sample, the OIG found fault with about $1.4 million in claims, and projected that to an overpayment of just under $42 million.

There are several very interesting tidbits to this story. First, much of the money the government is seeking involves claims that are more than 48 months old. Medicare’s reopening regulations prevent the government from reopening a claim after 48 months, absent fraud or similar fault. People often forget about that limitation when discussing the six-year lookback in the 60-day rule. 

In this audit, Mount Sinai’s lawyers did a great job of noting the four-year limit on recovery. In its report, the OIG acknowledges the limitation on the government’s ability to reopen claims, but asserts that Mount Sinai is still obligated to refund the money. 

I strongly disagree. 

The 60-day rule only requires providers and suppliers to refund an “overpayment.” The rule defines an overpayment as money to which, after appropriate reconciliation, the provider or supplier is not entitled. If the government can’t reopen the claim, the provider or supplier is entitled to the money. Therefore, after the reopening period has run its course, there is no overpayment.

A second interesting tidbit involves the statistical sample. The OIG looked at a universe that had $74.5 million in claims. From that, they took a sample of about $4.4 million. The audit concluded with findings that approximately $1.4 million in the sample was overpaid. In other words, about 31.5 percent of the sample was overpaid. 

If you apply that 31.5-percent error rate to the universe of $74.5 million, the overpayment would be about $23.5 million. Somehow, despite using the lower end of the 90-percent confidence interval, the OIG determined that the projected overpayment was nearly $42 million, which is consistent with an error rate of 56 percent. I’m no statistician, but something seems terribly amiss there. Perhaps the stratification of the sample has something to do with this result. Perhaps the result is statistically sound. But I am eager for a true statistician to review the analysis.   

The substantive issues discussed in the report are fairly typical for a hospital review. The government found issue with short stays, inpatient rehabilitation facility (IRF) services, and improper billing for medical devices in situations when the manufacturer gave the hospital a credit on 50 percent or more of the device (Medicare policy calls for the hospital to flag these discounts so that the hospital’s DRG is reduced when the manufacturer provides the device with such a discount). 

The inpatient claims predate the two-midnight rule. Remember that the pre-two-midnight rule guidance was so poorly written that there is a very compelling argument that it shouldn’t form the basis of an overpayment.

Before October 2013 (and actually, until a revision was issued in March 2017), the Benefit Policy Manual noted that “generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight” before adding in another sentence that physicians should “use a 24-hour period as a benchmark.” Except, north of the Arctic Circle during the winter, “overnight” and “24 hours” are not the same thing.

In short, Mount Sinai appears to have a strong basis to defend itself against the allegations in the OIG report. Fortunately, it looks like its lawyers are doing a great job of doing just that. 

Facebook
Twitter
LinkedIn

David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Decoding 2025 OPPS Charge Capture and Coding Complexities: Strategies for Success

Decoding 2025 OPPS Charge Capture and Coding Complexities: Strategies for Success

Prepare your organization for the 2025 OPPS updates with expert insights from Tiffani Bouchard, CCS, CRCR, a Revenue Integrity Professional with over 30 years of experience. This webcast will address critical challenges in charge capture and coding, providing clarity on APC policies, C-APC packaging, exclusions, and payer-specific requirements. Attendees will learn actionable strategies to ensure compliance, optimize reimbursement, and mitigate risks of claim denials. Gain the knowledge needed to implement updates effectively, educate your team, and maintain seamless revenue cycle operations in the face of evolving OPPS complexities.

January 29, 2025
Enhancing Outcomes with CDI-Coding-Quality Collaboration in Acute Care Hospitals

Enhancing Outcomes with CDI-Coding-Quality Collaboration in Acute Care Hospitals

Join Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, as she presents effective strategies to strengthen collaboration between CDI, coding, and quality departments in acute care hospitals. Angela will also share guidance on implementing cross-departmental meetings, using shared KPIs, and engaging leadership to foster a culture of collaboration. Attendees will gain actionable tools to optimize documentation accuracy, elevate quality metrics, and drive a unified approach to healthcare goals, ultimately enhancing both patient outcomes and organizational performance.

November 21, 2024
Comprehensive Inpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Comprehensive Outpatient Clinical Documentation Integrity: From Foundations to Advanced Strategies

Optimize your outpatient clinical documentation and gain comprehensive knowledge from foundational practices to advanced technologies, ensuring improved patient care and organizational and financial success. This webcast bundle provides a holistic approach to outpatient CDI, empowering you to implement best practices from the ground up and leverage advanced strategies for superior results. You will gain actionable insights to improve documentation quality, patient care, compliance, and financial outcomes.

September 5, 2024

Trending News

Featured Webcasts

Navigating the 2025 Medicare Physician Fee Schedule: Key Changes and Strategies for Success

Navigating the 2025 Medicare Physician Fee Schedule: Key Changes and Strategies for Success

The 2025 Medicare Physician Fee Schedule brings significant changes to payment rates, coverage, and coding for physician services, impacting practices nationwide. Join Stanley Nachimson, MS., as he provides a comprehensive guide to understanding these updates, offering actionable insights on new Medicare-covered services, revised coding rules, and payment policies effective January 1. Learn how to adapt your practices to maintain compliance, maximize reimbursement, and plan for revenue in 2025. Whether you’re a physician, coder, or financial staff member, this session equips you with the tools to navigate Medicare’s evolving requirements confidently and efficiently.

January 21, 2025
Patient Notifications and Rights: What You Need to Know

Patient Notifications and Rights: What You Need to Know

Dr. Ronald Hirsch provides critical details on the new Medicare Appeal Process for Status Changes for patients whose status changes during their hospital stay. He also delves into other scenarios of hospital patients receiving custodial care or medically unnecessary services where patient notifications may be needed along with the processes necessary to ensure compliance with state and federal guidance.

December 5, 2024
Navigating the No Surprises Act & Price Transparency: Essential Insights for Compliance

Navigating the No Surprises Act & Price Transparency: Essential Insights for Compliance

Healthcare organizations face complex regulatory requirements under the No Surprises Act and Price Transparency rules. These policies mandate extensive fee disclosures across settings, and confusion is widespread—many hospitals remain unaware they must post every contracted rate. Non-compliance could lead to costly penalties, financial loss, and legal risks.  Join David M. Glaser Esq. as he shows you how to navigate these regulations effectively.

November 19, 2024
Post Operative Pain Blocks: Guidelines, Documentation, and Billing to Protect Your Facility

Post Operative Pain Blocks: Guidelines, Documentation, and Billing to Protect Your Facility

Protect your facility from unwanted audits! Join Becky Jacobsen, BSN, RN, MBS, CCS-P, CPC, CPEDC, CBCS, CEMC, and take a deep dive into both the CMS and AMA guidelines for reporting post operative pain blocks. You’ll learn how to determine if the nerve block is separately codable with real life examples for better understanding. Becky will also cover how to evaluate whether documentation supports medical necessity, offer recommendations for stronger documentation practices, and provide guidance on educating providers about documentation requirements. She’ll include a discussion of appropriate modifier and diagnosis coding assignment so that you can be confident that your billing of post operative pain blocks is fully supported and compliant.

October 24, 2024

Trending News