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Rush expects Medicare overpayments to more than double to $21 million

Rush University Medical Center now owes the federal government $21.1 million in alleged Medicare overpayments, after a second inspection more than doubled the amount announced in 2017.


The Chicago academic health system said it expects to pay an additional $10.8 million stemming from a four-year audit on top of the $10.3 million for alleged overpayments uncovered in a two-year, HHS Office of Inspector General audit completed in 2017. The government alleges billing errors resulted in overpayments for inpatient and outpatient rehabilitation claims.


Deb Song, a Rush spokeswoman, said the system disputes the overpayment amounts, which were revealed in Rush's second quarter 2019 financial filing.


"We're currently working with government agencies to resolve that amount," she said, "because that's not correct."


The OIG ordered the four-year audit following the results of the two-year audit. Song said the four-year audit is ongoing, but she could not provide more information on it, including which years it covers.


The earlier, two-year audit determined Rush didn't fully comply with Medicare billing requirements in 57 of the 120 inpatient and outpatient claims it examined, resulting in overpayment of $814,150 in calendar years 2014 and 2015, according to its November 2017 report. Based on the sample results, the OIG estimated the hospital had received about $10.2 million in overpayments during the two-year audit period. The report acknowledged that Rush disputed the findings and said its documentation supported the level of reimbursement received in most cases.


Nonetheless, the OIG report was firm. "We stand by those determinations," its report said.


Of the 57 claims reviewed, 51 were inpatient claims, resulting in alleged overpayment of $812,744, and six were outpatient claims, resulting in alleged overpayment of $1,406. In its filing on Friday, Rush said it ultimately paid $10.3 million for the overpayments identified in the first audit, but is still appealing the findings.


"These errors occurred primarily because the hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors," the report stated.


Rush, which includes Rush University Medical Center, Rush Oak Park Hospital and Rush-Copley Medical Center, drew nearly $1.3 billion in operating revenue in the six months ended Dec. 31, 2018, up 7.6% from $1.2 million in the latter half of 2017, according to its filing. Operating expenses fell 9.9% to $1.3 billion in the same period.


The health system's expenses exceeded its revenues by $38.9 million in the latter half of 2018, a 142.6% slide from the prior-year period, when revenues exceeded expenses by $91.5 million. That was due in part to a 184.6% drop in non-operating income. The system recorded a $37.4 million non-operating expense in the six months ended Dec. 31, 2018, compared with non-operating income of $44.3 million in the prior-year period.


Article originally published: https://www.modernhealthcare.com/academic-medical-centers/rush-expects-medicare-overpayments-more-double-21-million