After reviewing compliance with Medicare's postacute care transfer policy, the Office of Inspector General ("OIG"), in its report posted to CMS' website on May 19, 2003, estimated that CMS overpaid approximately $61 million in DRG payments in FY 2000. The OIG extrapolated this estimated overpayment after auditing a sample of 200 DRG claims that were subject to Medicare's post acute care transfer policy. Of the 200 sample cases, 188 resulted in excessive payments due to incorrect coding of transfers as discharges by hospitals. The OIG made several recommendations to correct the problem. The OIG recommended, and CMS concurred, that the discharging hospital's FI should recoup the overpayments that were identified in the audit sample and review all other applicable claims that were not part of the specific sample and recover overpayments where appropriate. CMS also concurred with the OIG's recommendation that similar periodic reviews should occur in the future. Finally, the OIG recommended that CMS establish an "alert mechanism" in the Common Working File ("CWF") that would notify a discharging inpatient hospitals' FI of a potential postacute care claim. The full report can be found at http://oig.hhs.gov/oas/reports/region4/40207005.pdf.

This material is not intended to create, and does not create, an attorney-client relationship between you and Vinson & Elkins L.L.P., and you should not act or rely on any of this information. As legal advice must be tailored to the specific circumstances of each case, nothing provided herein should be used as a substitute for advice of competent counsel. These materials do not constitute legal advice, do not necessarily reflect the opinions of Vinson & Elkins L.L.P. or any of its attorneys or clients, and are not guaranteed to be correct, complete, or up-to-date. Vinson & Elkins L.L.P. assumes no liability for the use or interpretation of information contained herein. This publication is provided "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. Unless otherwise indicated, V&E attorneys listed are: not Certified by the Texas Board of Legal Specialization. None of the attorneys listed on this website is certified as an "expert" or "specialist" pursuant to any authority governing the practice of law in New York.

Vinson & Elkins is a registered limited liability partnership. Principal office-Houston.