'Federal Audit Says N.C. Hospitals Overcharging Medicaid'

WRAL.com North Carolina hospitals are overcharging Medicaid up to four times the expected amount for certain complicated procedures, according to federal auditors. If done correctly, $89.4 million would have been saved over six years, the audit released this month by the U.S. Department of Health and Human Services found. It said hospitals are taking advantage of a system in which the state makes special payments for long hospital stays or expensive cases, such as care for premature infants and organ transplants. The audit found that four hospitals would charge 346 percent more for a portable ventilator in complicated cases than they did in typical bills, from $73.50 to $328. Also, it found that charges for an implantable heart pump rose 247 percent, from $45,000 to $156,000, and a charge for a special warming blanket increased 323 percent, from $99 to $419. From 1998 to 2003, the average cost for expensive cases increased nearly 130 percent; the cost for routine care increased about 14 percent per hospital stay. The audited hospitals were not identified by name in the report, and it didn't explain how the hospitals justified the higher bills. Officials with North Carolina's Medicaid office disagreed with the audit's findings, and said it was based on a mistaken premise and faulty data. "They drew some incorrect conclusions," said Mark Benton, senior deputy director in the state Medicaid office. He said capping expensive-case payments was never the state's plan. Benton also faulted the audit for detailing annual increases but not showing that hospitals were treating more patients with complicated health problems. The audit also said the state did not routinely conduct medical reviews of so-called outlier claims, which would help in ensuring procedures were medically necessary and in identifying duplicate and other incorrect charges. The state's monitoring was adequate and effective, wrote Carmen Hooker Odom, state Department of Health and Human Services secretary, in a letter responding to the audit. No! That can't be true! Oh what a minute this is the real world, yeah it's true.