The federal agency that runs Medicare has acknowledged making an error in its statement on hospital reimbursement when it disclosed its plan to recoup $55... Feds: Hospitals were not ‘double paid,’ but are still on the hook

The federal agency that runs Medicare has acknowledged making an error in its statement on hospital reimbursement when it disclosed its plan to recoup $55 million in improper payments to medical providers in Georgia and other states.

The Centers for Medicare and Medicaid Services indicated last week that hospitals were essentially paid twice for the same patient services. A CMS spokeswoman said Monday that the double-payment assertion was not correct, but that the payments were improper because they were made by the wrong entity.

The overall problem in payments is complicated. It begins with reimbursements paid in error to hospitals, rural health clinics and other providers by Cahaba GBA, a former Medicare Administrative Contractor. CMS cited 268,000 claims paid in error through the traditional Medicare program over at least four years.

The federal agency said the patients served in these instances were members of a Medicare Advantage program, run by private insurers, and it said the hospitals should have been paid by those health plans instead.

The CMS statement last week, though, implied that hospitals were essentially reimbursed twice for those services: once through the mistaken payments from traditional Medicare, and a second time through a Medicare Advantage plan.

The Alabama Hospital Association and a hospital consultant challenged the CMS statement on the double-pay issue.

Nevertheless, the issue of erroneous payments still hangs over providers in Georgia, Tennessee and Alabama. Georgia providers, though, top the list with repayments due of $19.1 million, followed by $15.4 million in Tennessee, and $11.9 million in Alabama. Another $8.3 million comes from other states.

Cahaba GBA “made errors that led to significant overpayments,’’ CMS said last week. The mistaken payments involved mainly hospital outpatient claims.

Hospitals have responded with confusion and anger to notices of recoupments, said Jimmy Lewis, CEO of HomeTown Health, a group of rural hospitals in Georgia. “They were not aware they had a payback,’’  Lewis said Monday. He said repayments can squeeze the cash flow of smaller, financially challenged hospitals.

The medical providers that were contacted by the new Medicare contractor, Palmetto GBA, initially faced a tight deadline for repayment: July 1. But CMS said last week that it extended the planned repayment schedule by two weeks to allow providers time to research the issue and provide documentation showing they do not owe the funds.

The agency did not disclose the names of the hospitals or other providers that received the “overpayment” letters.

Under the repayment scenario, Lewis said, hospitals would have to pay the feds, then have to submit new claims for those services to the Medicare Advantage insurers. But not only would that add an administrative burden, Lewis said, but it also runs into insurers’ strict deadlines on submitting medical claims on a timely basis.

CMS instead should step back from its mid-July payment deadline, and do a full analysis of the situation, Lewis said.

“Someone ought to hold Cahaba accountable for the mistake,” he added.

The CMS spokeswoman said Monday that “while we sympathize with providers’ concerns, we are committed to ensuring the sustainability of the Medicare program.”

The federal agency said in its statement last week that “CMS is committed to ensuring the sustainability of the Medicare program so our nation can protect the health of older Americans and people with disabilities into the future. We are accountable to the American people and serve as stewards of their tax dollars.”

CMS said providers affected by the MAC payments can qualify for extended repayment schedules, and that most do not have to write checks to compensate for the mistaken payments.

“CMS will simply deduct the funds from their current payments. CMS and Palmetto GBA stand ready to respond to any provider concerns. In the meantime, we are continuing to audit for issues and correct problems to ensure the integrity of the Medicare program,” the agency statement said.

Cahaba GBA, the former contractor that CMS linked to the erroneous payments, is a subsidiary of Blue Cross and Blue Shield of Alabama.

A Blue Cross of Alabama spokeswoman said Monday that the company is “not in a position to respond at this time’’ to a reporter’s request for comment on the Cahaba errors, “as we are working on getting details about what actually happened.’’


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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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