OIG highlights Medicare consolidated billing confusion.

A recent HHS Office of Inspector General (OIG) report highlights the continuing confusion among providers and vendors over Medicare consolidated billing--and its resultant costs. Under the SNF PPS consolidated billing provision, outside suppliers are supposed to bill and receive payment from the SNF rather than Medicare for services rendered to a beneficiary during a Part A stay. But because this process isn't always followed, Medicare frequently pays twice for the same service--once to the SNF under Part A prospective payment and again to an outside supplier under Part B--and some suppliers are even double-dipping, says OIG, by billing both SNFs and Medicare.

For calendar years 1999 and 2000, the OIG identified $108.3 million in improper Medicare Part B payments for services already paid for in PPS Medicare Part A payments made to SNFs. Moreover, beneficiaries were charged $33.1 million in coinsurance and deductibles for these erroneous payments.

The OIG cites SNFs' and vendors' lack of controls to prevent improper billing, as well as CMS's inability at the time to consistently detect Part B services subject to the consolidated billing provision, as reasons for the improper payments. Although CMS's claims-processing system was updated in 2002 to detect and prevent such payments, suppliers can still be paid improperly by Part B before SNFs submit their PPS claims, requiring costly postpayment recovery activities.

Although the OIG suggested that CMS take several steps to prevent future problems with consolidated billing, CMS did not agree with all of the recommendations; for example, CMS maintains it does not have the authority to mandate information SNFs must provide to their suppliers to ensure accurate billing. For other OIG recommendations and CMS responses, visit http://oig.hhs.gov/oas/reports/region1/10200513.pdf.