2003 copayment calculations led to inaccurate payments

Healthcare Financial Management, Dec, 2003

The method used in calculating 2003 copayments under the Medicare outpatient (PPS) resulted in inaccurate payments for 75 APCs, according to an October 6 report that the Government Accounting Office (GAO) submitted to CMS administrator Tom Scully.

The report, Medicare: Discrepancy in Hospital Outpatient Prospective Payment System Methodology Leads to Inaccurate Beneficiary Copayments and Medicare Payments, showed that for 28 APCs, the new calculation method resulted in beneficiaries being responsible for higher copayments than under the 2002 calculations. For the remaining 47 APCs, beneficiaries were responsible for lower copayments, the GAO said.

According to the GAO, the discrepancy has resulted in inaccurate payments amounting to $414 million, with a net of $192 million in over-payments. The agency recommended that, in calculating the 2004 outpatient PPS beneficiary copayment amounts, CMS should first apply the 2002 payment methodology to the 2003 APCs that were inaccurately charged, and then base the 2004 amounts on these revised 2003 copayment amounts.

To read the GAO's report on copayment calculations, go to www.gao.gov/new.items/d04103r.pdf.>

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