Report shows Jefferson Hospitals' billing errors resulted in Medicare overpayment

Billing errors at two of the three Thomas Jefferson University Hospitals in 2008 and 2009 resulted in Medicare overpaying the hospital system $43,438, according to a report released Thursday by the Department of Health and Human Services Office of Inspector General.

With the federal budget tight and cries from all corners about wasteful spending, HHS and the Justice Department have increased their efforts to track where money goes and whether there was any fraud.

This case involved no apparent fraud, but it did touch a problematic area for hospitals - readmissions and the errors that cause them. Public and private insurers want to reduce them for the sake of patients and to save money.

Federal auditors found mistakes in four of the 133 same-day readmissions that were reviewed. Three occurred at Thomas Jefferson University Hospital and one at Jefferson Hospital for Neuroscience. The facilities incorrectly billed the second admission as a separate inpatient stay instead of a continuous stay based on the first admission, resulting in the overpayment.

The report focused on readmissions and was not an overall assessment of all Medicare reimbursement claims submitted by Jefferson, which has returned the extra money.

In a letter attached to the report, Jefferson CEO Thomas Lewis said the three-hospital system had reminded employees of the existing billing policies and submitted a plan "to prevent recurrence of said same-day readmission billing deficiencies."

Lewis will retire, effective June 30, and chief operating officer David McQuaid will keep that title and add that of president.

The full OIG report is here.