How Twenty Claims Become a $12.4 Million Demand

The Office of Inspector General posted a hospital compliance audit on Thursday that asks a single San Antonio hospital to write the federal government a check for $12,499,714.

The auditors reviewed 100 claims. They found errors on 27 of them, worth $256,926.

Everything between those two numbers is arithmetic, and the arithmetic runs through twenty claims in one stratum.

"If the sample found a quarter of a million dollars, where did the other twelve million come from?"

Twenty Claims, Sixteen Wrong

Report A-09-23-03001 covers Methodist Hospital, a 1,976-bed acute-care facility in San Antonio, for calendar years 2020 and 2021. OIG built a sampling frame of 6,625 claims worth $62,048,673 across eleven designated risk areas, then drew a stratified random sample of 100: twenty IRF claims, sixty acute inpatient claims, twenty outpatient claims.

The sixty acute inpatient claims produced $8,850 in net overpayments. The twenty outpatient claims produced $619.

The twenty IRF claims produced $247,457.

Sixteen of those twenty were billed incorrectly.

Twelve failed medical necessity under 42 CFR 412.622(a)(3), and the element that failed was the fourth one: the patient did not reasonably require supervision by a rehabilitation physician. Ten of the twenty also missed the IRF-PAI discharge assessment deadline at 42 CFR 412.610(c)(2), five calendar days after discharge.

That second failure carries no money. OIG counted the claims as errors for compliance purposes and said the amounts remain allowable, which is worth knowing before you panic about your own PAI timeliness report.

The first failure carries all of it.