Medicare Overpaid Specialty Hospitals by $800M in 2000, HHS Report Finds

Medicare overpaid specialty hospitals by $800 million in 2000 because of a lack of government oversight, according to a report from the HHS Office of Inspector General, Bloomberg/Los Angeles Times reports. Medicare uses a different formula to determine reimbursements for hospitals that provide specialized services such as psychiatric, rehabilitative and long-term care than for acute-care hospitals, and the reimbursements for specialty facilities in 2000 "weren't scrutinized closely" by federal officials, Bloomberg/Times reports. About 9.2% of the $8.7 billion in reimbursements to specialty hospitals paid by Medicare in 2000 covered services that beneficiaries did not require, the report said. CMS has informed Medicare contractors that they may review reimbursements made to specialty hospitals, the report said (Bloomberg/Los Angeles Times, 12/3).