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UNC Hospitals accused of overbilling Medicare by $2.5 million

Medicare officials have accused UNC Hospitals of overbilling the federal insurance program by about $2.5 million and are demanding repayment; UNC says it was entitled to most of the money and is appealing the findings.
Medicare officials have accused UNC Hospitals of overbilling the federal insurance program by about $2.5 million and are demanding repayment; UNC says it was entitled to most of the money and is appealing the findings. rwillett@newsobserver.com

Medicare officials have accused UNC Hospitals of overbilling the federal insurance program by about $2.5 million and are demanding repayment from the Chapel Hill health care organization.

But rather than agree to the federal audit's findings, as many hospital systems do when faced with evidence, UNC says it was entitled to most of the money and is appealing the findings.

In its response to this month's audit report, UNC told Medicare it employs an extensive system of reviews and strong internal controls to make sure patients are billed correctly. Hospital officials have requested a meeting with auditors to go over the agency's findings.

UNC plans to appeal the overbilling determinations, a move that entitles the hospital system to administrative hearings and the option of negotiating a settlement with Medicare.

UNC officials concede just three billing errors, blaming human error, but UNC contends that 56 claims were billed correctly. The 59 total claims were tagged by the Department of Health and Human Services as billing errors out of 251 claims sampled by the agency's Office of Inspector General.

The Inspector General's audit covered Medicare billings between January 2011 and September 2012; it found $451,995 in overpayments out of a total $3.5 million billed. The agency extrapolated that UNC overbilled $2.5 million during the 21-month period audited.

DHHS cited several examples of alleged overbilling. In several instances, UNC billed Medicare full price for discounted medical devices and devices under warranty. UNC acknowledged the errors.

In another instance, UNC billed Medicare for a patient discharge that should have been billed as a transfer. UNC said the patient arranged for home health care after the hospital discharge without the hospital's awareness, causing the hospital to be overpaid.

"We had no means to know that the patient's primary care doctor ordered home health services after she left our care," wrote Margaret Dardess, UNC Health System's interim chief audit and compliance officer.

UNC said that Medicare's extrapolation of overbillings to $2.5 million is skewed, because "the calculation relies on widely variable parameters to predict an amount."

UNC also said in some instances its doctors admitted patients for emergency treatment, based on the information doctors had at the time, and the claims shouldn't be denied as unnecessary just because the patients' conditions did not worsen.

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