The Health and Human Services Department hasn't been charging some medical facilities a late fee on patient assessments, which could save the government millions each year.
The Health and Human Services Department overpaid providers $8.4 million because it did not deduct late fees owed by Medicare and Medicaid providers, the agency's internal watchdog has found.
The Centers for Medicare and Medicaid Services (CMS) pays inpatient rehabilitation facilities, or IRFs, for the care provided to patients. But the IRFs are suppose to send the government patient assessments no more than 27 days after a patient has been discharged. If the assessments are late, the money the medical facility receives is supposed to be docked 25 percent under a "late-assessment policy."
But CMS hasn't been adding that fee to late deliveries, meaning it overpaid $8.4 million it should have kept during 2009 to 2010, the HHS Office of Inspector General reported Thursday.
"Overpayments occurred because IRF and Medicare payment controls were inadequate," the investigators concluded.
The inspector general recommended CMS attempt to recover as many past overpayments as possible.
CMS agreed with the recommendations, and the inspector general reported it has already created a plan to ensure the overpayments stop.
"CMS has reviewed the sample claims from OIG and plans to recover the identified overpayments consistent with the agency's policies and procedures," said a response from the agency.
In 2010, the inspector general found CMS had overpaid $20.2 million to IRFs because it failed to apply late fees. The agency took action to correct the problems, but the current $8.4 million has still managed to slip through the cracks.
IRFs submitted $8.6 billion worth of claims, but the inspector general only analyzed roughly 2,414 claims totaling $41.6 million that were at risk of having been overpaid. Of that, it found $8.4 million for 88 payments was wasted.
"CMS payment controls were not adequate to detect and prevent overpayments," the inspector general said.
The Health and Human Services Department, or HHS is the "government’s principal agency for protecting the health of all Americans and providing essential human services," according to its website.
The Office of Inspector General, or IG, is an independent watchdog within each government agency charged with finding waste, fraud or areas for improvement.
The Centers for Medicare and Medicaid Services, or CMS, is the HHS office that handles Medicare and Medicaid entitlement payments to beneficiaries and medical facilities.