During an internal review of the Medicare cost reports for two of its hospitals, the company noted a very unusual and material increase in reported telemetry charges. The increase in telemetry charges resulted in more than a $10 million increased Medicare outlier payments for a single year. HMP was engaged by the hospital’s regulatory counsel and asked to review the medical necessity and documentation of the charges to ensure that they would be supported in the event of an audit or review.
Issues
- The hospitals had both been acquired the preceding year and converted from general acute care to long-term acute care hospitals
- The charge master in use at the time of the acquisition was not changed when the hospital was converted to an LTACH
- The hospital rapidly expanded its telemetry capacity during the period in question
Approach
- HMP engaged a geriatrician and other geriatric clinical experts to assist in the investigation
- The geriatrician performed a detailed chart audit of 50 randomly selected medical records to evaluate the clinical appropriateness of the use of telemetry
- HMP performed a 100% review of all patient medical records to determine if telemetry was documented as medically necessary in the medical record
- HMP then used this information to recalculate the outlier payment to determine the amount (if any) of overpayment
- HMP determined that the majority of the telemetry charges were either medically unnecessary or not clinically supported in the patient’s medical record. HMP further determined that the amount of the telemetry charge was similarly unsupportable on any basis other than as a means to maximize Medicare outlier revenues
Results
- The information was submitted to hospital counsel for further investigation and proper disposition
- Documentation issues were reviewed with management to discuss additional training and procedures to ensure strict compliance with documentation requirements