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In March 2008, National Government Services (NGS) was awarded the Medicare administrative contractor contract for Jurisdiction 13, which includes the states of Connecticut and New York.


During the aforementioned audit period, approximately 197 million line items for outpatient services were processed in Jurisdiction 13, of which 1,903 had a Medicare line payment amount that exceeded the line billed charge amount by at least $1,000 and three or more units of service, according to the OIG. In this audit, the OIG reported that it did not review entire claims; rather, the agency reviewed specific line items within the claims that met these two criteria. Because the terms “payments” and “charges” generally are applied to claims, the OIG in its report said it would use “line payment amounts” and “line billed charges.”


The OIG reviewed only 1,841 of those line items since eight providers associated with 62 line items were no longer in business or were in bankruptcy, the report indicated. Of the 1,841 selected line items for which NGS made Medicare payments to providers for outpatient services during the audit period, 530 were found to have been handled correctly. The remaining 1,311 line items were handled incorrectly and included overpayments totaling $7,676,440, according to the OIG.


In the case of Palmetto GBA, LLC, the OIG said its audit found that 746 of 1,592 selected line items for which Palmetto made Medicare payments to providers for outpatient services were incorrect. The line items included overpayments totaling $4.7 million, which the providers had not refunded by the beginning of the OIG audit (providers refunded overpayments on 680 line items totaling $2.4 million before the OIG began field work). The remaining 166 line items were handled correctly, officials said.


The deficiencies in the 746 incorrect line items included, according to the OIG: a) incorrect units of service; b) a lack of supporting documentation; c) a combination of incorrect units of service and incorrect Healthcare Common Procedure Coding System (HCPCS) codes; d) billing for the unlabeled use of a drug/biological; e) billing for unallowable services; f) billing separately for services for which payment was packaged in payment for the primary service; g) incorrect HCPCS codes; and h) incorrectly calculating a line item payment.


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Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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