HHS Inspector General to review Medicare overpayments to nursing homes

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The Department of Health and Human Services Office of Inspector General is reviewing Medicare overpayments to skilled nursing facilities made because a hospital-stay rule was not followed, the IG said in an audit report released Sept. 1.

Premera Blue Cross is one example. The government overpaid nearly $790,000 between 1997 and 2001 to nursing homes that file Medicare claims through Premera, a fiscal intermediary in Mountlake Terrace, WA, the report said.

The overpayments occurred because there was no automated record of patients undergoing the required three-day hospital stay before becoming residents at the nursing facilities. Under current regulations, nursing homes must prove that a resident underwent a preceding three-day hospital stay in order to receive Medicare reimbursement.

The IG determined that the overpayments were not the fault of Premera, but the company is required to collect the money. However, Premera says it is not responsible for recovery action because a memo from the Centers for Medicare & Medicaid Services in November 2003 said fiscal intermediaries should not collect overpayments when in-hospital stays cannot be matched with a nursing home's claim.