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Medicare overpaid 33 San Francisco-area hospitals by $5 million due to misreported wage data

OIG says Alta Bates Medical Center reported inaccurate information on the wages paid to its workers.

Jeff Lagasse, Associate Editor

Alta Bates Medical Center overstated its average hourly wage rate by $5.78, officials say.Alta Bates Medical Center overstated its average hourly wage rate by $5.78, officials say.

Medicare overpaid 33 San Francisco-area hospitals by more than $5 million after Alta Bates Medical Center, which boasts the country's most generous employee compensation, reported inaccurate information on the wages paid to its workers, according to the Department of Health and Human Services' Office of the Inspector General.

A report issued by the OIG said the medical Center didn't comply with all of Medicare's requirements for reporting wage data in its fiscal year 2010 cost report. Because of that, in 2014 Medicare overpaid Alta Bates $154,000 and overpaid 32 other area hospitals a total of about $5.3 million.

Certain hospitals that receive funding from Medicare are required to submit data for wages and fringe benefits, which the Centers for Medicare and Medicaid Services compares to other wages in the region -- information it uses to fix payment levels.

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Alta Bates did not report 308,790 hours associated with $11,659,386 in reported salaries, said the OIG. It also failed to report $1,792,346 in salaries and 46,336 associated hours; hours associated with $930,000 in severance payments; misclassified $328,767 in certain salaries and 12,302 in associated hours as overhead salaries and hours, and overstated $292,649 in wage-related costs associated with the incorrectly reported salaries.

Those errors occurred, OIG said, because the medical center did not sufficiently review and reconcile the wage data to ensure that it was accurate and reported in compliance with Medicare requirements. As a result, the Alta Bates overstated its occupational-mix-adjusted average hourly wage rate by $5.78.

Because of the prospective nature of the inpatient prospective payment system, CMS has no mechanism to recover overpayments or fix underpayments resulting from inaccurate wage data.

The OIG is recommending that Alta Bates launch review and reconciliation procedures to ensure the wage data it reports in the future is accurate and in compliance with Medicare requirements.

Twitter: @JELagasse

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