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U. Iowa hospital disputes Medicare audit finding

Ryan j. Foley, Associated Press

IOWA CITY, Iowa (AP) -- The University of Iowa Hospitals will repay some money that an audit found it received by mistakenly overbilling Medicare, but it disputes that it should refund $550,000 more for claims tied to a commonly used cancer drug, a hospital administrator says.

According to a report released Tuesday by the Office of Inspector General of the U.S. Department of Health and Human Services, the hospital received $826,000 in excess payments from Medicare because of billing and coding errors by its workers on everything from drugs to medical devices. The audit reviewed about 400 claims that were identified at high risk for billing errors in 2009 and 2010, and found problems with 274 of them.

The report noted that the amount questioned is a fraction of the $659 million that the 729-bed hospital received from Medicare in the two-year period for nearly 547,000 payment claims. But it said the errors were allowed to happen "primarily because the hospital did not have adequate controls to prevent incorrect billing of Medicare claims."

Deborah Thorman, assistant vice president for compliance and accreditation for UI Health Care, said in a response to the audit that the hospital agreed that it made mistakes that resulted in overpayments of about $271,000 and would refund the money. She said the hospital has already made changes to fix problems, such as providing additional education to billing employees and conducting random audits and reviews before claims are made to ensure accuracy.

"The University of Iowa Hospitals and Clinics takes its obligation to bill correctly very seriously and has taken several steps to strengthen internal processes to ensure compliance with Medicare requirements," she wrote.

But Thorman said the hospital disagrees with the recommendation that it refund an additional $555,000 for 237 inflated claims related to injections of Lupron, a commonly prescribed drug for patients with prostate cancer and uterus disorders. The audit said the hospital used the wrong code in submitting the claims and billed for twice as many units as it should have, resulting in repeated overpayments.

Thorman said the hospital believed those claims were billed accurately based on guidance from Medicare at the time, calling coding "a technical and interpretative science, which may result in differences of opinion on the 'best' code" to use. She said the hospital changed its code in 2010 when it received different instructions, and noted that auditors who previously reviewed earlier claims found no errors.

The Office of Inspector General stood by its findings, saying the hospital's response "did not provide us with evidence that the correct" codes were used and that the hospital still owes the full amount. The dispute will now go to department officials to decide.

The hospital did not dispute that several other claims listed the incorrect diagnosis or one that was not supported in the medical records, did not report proper credits for receiving medical devices from manufacturers, and had other mistakes as documented by the audit.