OIG Finds Significant Medicare Dental Overpayments Made to Hospitals

(October 27, 2015): Late this summer, the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) announced that more than $2 million in payments to dental providers for hospital outpatient dental services would have to be reimbursed to the federal government for failure to comply with Medicare program requirements. The dental providers are located in “Jurisdiction K” which comprises Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. The time period for the performance audit was from January 1, 2011, through October 31, 2013. The reimbursement amount is the highest for all jurisdictions for hospital outpatient dental services for this period.

I. Improperly Paid Hospital Outpatient Medical Dental Services:

Hospital outpatient dental services are properly paid through the Medicare program when such services are performed incident to and as an integral part of a procedure or service covered by Medicare. 42 C.F.R. § 421.404. Medicare coverage is not determined by the value or necessity of the dental care but by the type of service provided and the anatomical structure on which the procedure is performed. 42 U.S.C. § 1862(a) (12).

The OIG performance audit covered 4,495 hospital outpatient dental services and a total payment of $3,005,245 paid by a Medicare contractor for Medicare claims from January 1, 2011 through October 31, 2013. Applying generally acceptable government auditing standards, the audit addressed a stratified random sample of 100 hospital outpatient dental services and contacted the providers that received the payments for those services to determine whether the services complied with Medicare requirements. The audit determined that 85% of the sample was non-compliant with Medicare payment requirements. Specifically, the majority of the improperly paid claims in the sample were for tooth extractions, which is not a covered Medicare service. The audit also disclosed improperly paid claims for tooth socket repairs performed in preparation for dentures.

When contacted by the auditors, the dental providers agreed that the dental claims should not have been paid by Medicare. They defended their submission of the claims, however, by indicating that the patients were covered by both Medicare and Medicaid and they had to first have a claim denied by Medicare in order for the claim to be paid by Medicaid. The fault, they therefore argued, was with the contractor who authorized payment, not the provider. Some providers indicated that they believed the dental services were medically necessary and therefore qualified for payment. Other providers indicated that the services were simply improperly coded as covered services.

II. OIG Recommendations with Respect to these Improper Medical Dental Claims:

The OIG had three recommendations arising from the performance audit for the Medicare contractor responsible for handling these dental claims. First, OIG recommended that the contractor initiate recovery of the $2,276,853 in improper Medicare claim payments from the hospitals. Second, the OIG recommended that the contractor include the results of the performance audit in its provider education programs. Third, the OIG recommended that system edits be implemented to catch improper claims so that the Medicare payments for the dental hospital outpatient services are properly made. The Medicare contractor agreed to implement all three recommendations.

III. Implications from this OIG Medicare Dental Performance Audits:

Dentists should be aware of the requirements for submitting Medicare claims for dental hospital outpatient services. The attorneys of Liles Parker, PLLC have devoted years of work in advising clients on submitting claims for Medicare and / or Medicaid reimbursement. If your dental claims (both Medicare and / or Medicaid) are audited by federal or state authorities (or by one of their contractors), give us a call for assistance.

Robert W. Liles, JD, MS, MBA serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law. Robert represents health care providers and suppliers of all sizes around the country in connection with a full range of ZPIC prepayment reviews, postpayment audits, suspension and revocation actions. He also handles False Claims Act cases. For a complimentary consultation, please call Robert at: 1 (800) 475-1906.