Hospital Cost Report Fraud

Do you have evidence a hospital has received or retained Medicare payments because of fraud on their annual cost report?  Medicare relies on the accuracy of the information it is provided in reconciling payments made over the course of the year.  If you have evidence that a hospital cost report is false, Medicare would like to see it.

The False Claims Act allows whistleblowers to report Medicare fraud to the Department of Justice by filing a lawsuit.  Indeed, Congress has incentivized whistleblowers to do so, providing a reward for information resulting in a recovery by the U.S. Government.

Potential Violations of the False Claims Act

Improper Costs

Medicare will pay proportionately for certain items, such as capital costs, interest expenses, physician recruitment and advertising.  Medicare regulations define which costs are allowable and which are not.  The inclusion of improper costs will cause the hospital to receive or retain payments which it is not entitled to according to the regulations.

Cost Center Fraud

Medicare does not pay for expenses at non-reimbursable cost centers.  By improperly shifting expenses between cost centers, a hospital could fraudulently increase its payments.

Outlier Payments

Medicare will make additional payments to cover extra charges in cases that involve atypical expenses.  Hospitals must express an interest in this type of payment in the particular case.  If the costs exceed a certain threshold, Medicare makes the additional payment.

Hospital Cost Reports

What is it?

Hospitals initially bill Medicare on UB-92 or the electronic equivalent. At the end of the year, they submit a final statement of their costs on a hospital cost report. This year end claim is a reconciliation of all payments received from the government and any amount owed by the government or required for return by the provider.

The Certification

The certification of the accuracy of the report is a condition of payment under Medicare. Consequently, if there are problems with the accuracy of the report, there can be liability under the False Claims Act. This occurs either through the initial submission of a false claim or the subsequent realization that Medicare was over billed and improper retention of the overpayment.

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