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American Hospital Association Calls on CMS to Address ‘flaws and inaccuracies’ in OIG Audits

In a letter dated October 2nd, the American Hospital Association has called on CMS to take a more active role regarding hospital compliance reviews conducted by the Office of Inspector General (OIG).  Citing fundamental flaws and inaccuracies, both in the OIG’s understanding and application of Medicare payment rules and in the procedures used to conduct the audits, the AHA asserts that the flaws “result in vastly overstated repayment demands, unwarranted reputational harm, and diversion of hospital and physician leaders’ time from their core mission of caring for patients.”  The AHA further asserts that the OIG’s mistaken legal interpretations result in uneven application of Medicare payment rules and that there is a lack of consistency in the appeals process.

Due to the OIG’s extrapolation of findings to all claims in an audit period the AHA asserts that the negative effects of the audits are “exacerbated.”  Hospitals are forced to appeal each claim, creating a severe financial and reputational impact that continues long after the OIG’s errors are corrected on appeal. The AHA letter expressed concern that, based on information relayed in their meeting, the OIG now plans to extrapolate in every single hospital audit, despite the legal and statistical limitations on extrapolation and the significant concerns about the OIG’s sampling and extrapolation methodologies.

The AHA letter reiterates the following suggestions to improve the accuracy and fairness of the OIG audits, that were provide to CMS during their meeting:

  1. Extrapolate only if there is a significant error rate
  2. Delay extrapolation until the appeals process is complete.
  3. Allow rebelling of denied inpatient claims regardless of the usual timely filing period.
  4. Provide feedback to the OIG to facilitate issuance of an amended audit report and improvements in audits.
  5. Review and address legal issues raised by hospitals before an audit is performed or before a repayment demand is issued.

The full AHA letter can be found here.

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