www.baltimoresun.com/health/maryland-health/bs-hs-hospital-audit-20130111,0,4693411.story

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Oversight of hospital billing found lacking

State audit alleges $13 million in overcharges at four institutions

By Timothy B. Wheeler, The Baltimore Sun

7:13 PM EST, January 11, 2013

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The state commission that regulates hospital rates has not kept adequate tabs on hospital billings, according to legislative auditors, who say that four hospitals they checked have overcharged by more than $13 million.

An audit of three regulatory agencies under the Maryland Department of Health and Mental Hygiene found "control deficiencies" at one, the Health Services Cost Review Commission, which left auditors with a "lack of assurance" that billings by the state's 53 hospitals were proper. The panel did not check regularly to see whether hospitals were riding herd on their billings, auditors said, and failed to fully investigate overcharges its reviews did find.

The commission uncovered apparent hospital overcharges as part of a regular review, but failed to follow up, the audit says. Upon closer inspection, the auditors said, they found overcharges ranging from 67 percent to 1,880 percent higher than allowed under state rules, some dating to 2001. Overcharges at the four hospitals included $3.7 million billed to the state's Medicaid program, which pays for health care to the poor.

The audit did not identify the four hospitals that allegedly overcharged.

State health officials said they are addressing many of the audit's findings and recommendations for tightening oversight of hospital billing. But Steve Ports, the health cost commission's principal deputy director, said further inquiry found that alleged overcharges by one of the four hospitals were actually proper, and that the overcharges attributed to two others were partly offset by undercharges. The commission is in the process of recouping the overcharges by adjusting the hospitals' rates, Ports said, adding that penalties would be assessed for the billing errors.

tim.wheeler@baltsun.com

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