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Community Hospital in Munster

MUNSTER — Community Hospital overbilled Medicare at least $22 million over a recent two-year period, according to a federal audit released this month.

A hospital spokeswoman said the hospital "vehemently denies" the audit's findings and said it strongly disputes the methodology used.

The Munster hospital complied with Medicare billing requirements in fewer than half the reviewed claims, the U.S. Department of Health & Human Services' Office of the Inspector General reported.

The audit looked at 170 inpatient and outpatient claims from 2015 and 2016 and found 86 weren't compliant — all of them inpatient — for a total of $1.3 million in overpayments. Using that sample, the inspector general estimated the hospital incorrectly billed more than $22 million in those two years, calling that a "conservative" estimate.

In total, the hospital had about $275 million in Medicare claims during that time period.

The auditors blamed the errors on Community Hospital's not having "adequate controls to prevent the incorrect billing."

"Community Hospital vehemently denies the allegations in the Office of the Inspector General (OIG) report," Elise Sims, a spokeswoman for the hospital, said in a statement Wednesday.

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"Community Hospital has already had two Medicare audits and an independent audit for rehabilitation claims during this same time period that showed greater than 95 (percent) compliance, and we strongly dispute the audit methodology used by the OIG. Community Hospital will be immediately appealing the OIG findings."

OIG recommended the hospital return the $22 million to Medicare, as well as "any additional similar overpayments received outside of (the) audit period," and "strengthen controls" to ensure future compliance.

"This amount is grossly excessive and imposes an unreasonable burden upon Community Hospital that may have dire consequences for its future operations," hospital CEO Luis Molina wrote in response to the OIG's draft, adding that finalizing the report would "improperly harm Community's reputation and finances, jeopardizing its patient care mission and its ability to continue serving the health care needs of the community."

The report is a recommendation to HHS officials, who will make a final determination. There are five levels to the Medicare appeals process, the report states, and a provider does not have to return any money until after the second level of appeal.

The inspector general reported that of the 165 Community Hospital inpatient claims it reviewed, 63 did not meet the standard for acute inpatient rehabilitation and 23 had improper diagnostic codes.

In response to the report's draft, Community commented that OIG did not have a good reason to audit the hospital, utilized incorrect standards in assessing the inpatient claims, and used a "flawed" method of sampling as well as extrapolation that was "inappropriate" and "premature."

OIG disagreed with those claims in its final report.

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Health Reporter

Giles is the health reporter for The Times, covering the business of health care as well as consumer and public health. He previously wrote about health for the Lawrence (Kansas) Journal-World. He is a graduate of Northern Illinois University.