OIG says fraud changes saved billions

Implementation of fraud-related program changes saved the federal government $10.96 billion in FY 1998, according to the Office of the Inspector General’s Dec. 1 semiannual report. The bulk of these savings came from implementation of the OIG’s recommendation to extend congressionally mandated cuts in hospital costs and a reduction in the fee schedule amounts for Medicare laboratory reimbursements.

Physicians at Teaching Hospitals (PATH) audits conducted by the OIG produced settlements totaling $67 million from four hospitals during 1998. The multiyear initiative is intended to verify compliance with Medicare rules governing payment for physician services provided by residents and interns, and to ensure that all claims for services accurately reflect the level of service provided to the patient.

The Health Care Financing Administration also recovered $63.8 million from its Diagnosis-Related Group Payment Window Project. The DRG project is designed to recover overpayments made to hospitals as a result of claims submitted for nonphysician outpatient services that were already included in the hospitals’ initial prospective payment. The agency has entered into settlements with 2,483 hospitals to date under the DRG project, the report says.