All claims and requests for reimbursement from the Federal health care programs and all supporting documentation must:

• Be complete and accurate
• Reflect reasonable and necessary services
• Be ordered by an appropriately licensed medical professional (who is a participating provider in the health care program the patient is seeking reimbursement from)

Hospitals:

• Must disclose and return any overpayments that result from mistaken or erroneous claims. Knowing submission of a false, fraudulent, or misleading statement or claim is actionable
• Must be sure that the underlying assumptions used in connection with claims are reasoned, consistent, and appropriately documented
• Should retain all relevant records that reflect their efforts to comply with Federal health care program requirements

Common risks associated with claims include:

• inaccurate or incorrect coding
• up-coding
• unbundling of services
• billing for medically unnecessary services
• billing for other services not covered by the relevant health care program
• billing for services not provided
• duplicate billing
• insufficient documentation
• false or fraudulent cost reports

Four key areas to monitor for accurate claims and information are:

1. Outpatient Procedure Coding
2. Admissions and Discharges
3. Supplemental Payment Considerations
4. Use of Information Technology
   

1. Outpatient Procedure Coding

Under OPPS, hospitals must generally include on a single claim all services provided to the same patient on the same day. Coding from incomplete medical records may create problems in complying with this claim submission requirement. Moreover, submitting claims for services that are not supported by the medical record may also result in the submission of improper claims.

Other specific risk areas associated with incorrect outpatient procedure coding include:

• Billing on an outpatient basis for ‘‘inpatient-only’’ procedures
• Submitting claims for medically unnecessary services by failing to follow the FI’s local medical review policies
• Submitting duplicate claims or otherwise not following the National Correct Coding Initiative guidelines
• Submitting incorrect claims for ancillary services because of outdated Charge Description Masters
• Failing to follow CMS instructions regarding the selection of proper evaluation and management cod
• Circumventing the multiple procedure discounting rules
• Improperly billing for observation services

2. Admissions and Discharges

Often, the status of patients at the time of admission or discharge significantly influences the amount and method of reimbursement hospitals receive. Hospitals have a duty to ensure that admission and discharge policies are updated and reflect current CMS rules. Risk areas with respect to the admission and discharge processes include the following:

• Failure to follow the ‘‘same-day rule’’
• Abuse of partial hospitalization payments
• Same-day discharges and readmissions
• Violation of Medicare’s post-acute care transfer policy
• Improper churning of patients by long-term care hospitals co-located in acute care hospitals

3. Supplemental Payment Considerations

In certain limited situations, hospitals may claim payments in addition to, or in some cases in lieu of, the normal reimbursement. Eligibility for these payments depends on compliance with specific criteria. Hospitals that claim supplemental payments improperly are liable for fines and penalties under Federal Law. Specific risks include:

• Improper reporting of the costs of ‘‘pass-through’’ items
• Abuse of DRG outlier payments
• Improper claims for incorrectly designated ‘‘provider-based’’ entities
• Improper claims for clinical trials
• Improper claims for organ acquisition costs
• Improper claims for cardiac rehabilitation services
• Violation of Educational Activity Rules

4. Use of Information Technology

Information technology presents new opportunities to advance health care efficiency, but also new challenges to ensuring the accuracy of claims and the information used to generate claims. It is often difficult for purchasers of computer systems and software to know exactly how the system operates and generates information.