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April 17, 2020
Health Law Weekly

Medicare Improperly Paid $93 Million for Inpatient Psychiatric Care, OIG Reports

  • April 17, 2020

An estimated 87% of inpatient psychiatric facility (IPF) claims for fiscal years 2014 and 2015 with outlier payments didn’t meet Medicare medical necessity or documentation requirements, the Department of Health and Human Services Office of Inspector General (OIG) reported April 13.

As a result, OIG estimated that Medicare overpaid IPFs $93 million for stays that were at least partially noncovered and resulted in outlier payments.

Of 160 sampled claims, OIG found 25 did not meet Medicare medical necessary requirements for some or all days of the stay. An additional 142 claims didn’t satisfy documentation requirements such as physician certifications.

OIG focused on outlier payments associated with IPF stays, citing a 28% increase in the number of those claims from FY 2014 to FY 2015 and a 19% increase in total Medicare payments, from $450 million to $534 million during that period. Outlier payments are intended for cases that are unusually expensive to treat, but OIG found they weren’t always warranted.

OIG recommended that CMS do more to ensure IPF claims, whether or not they result in outlier payments, comply with Medicare requirements.

The review also raised concerns that certain beneficiaries may have lacked capacity to make informed decisions about their care, and that CMS failed to track patient falls or fall rates at IPFs. OIG recommended CMS exercise additional rulemaking or oversight in both these areas.

The report is An Estimated 87 Percent of Inpatient Psychiatric Facility Claims With Outlier Payments Did Not Meet Medicare’s Medical Necessity or Documentation Requirements (A-01-16-00508).

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