LEWISTON – The same federal agents who advised nine Maine hospitals how to file for Medicare reimbursements are now telling those hospitals they have to pay back millions of dollars due to the agents’ error.
Some Maine hospitals that provide health care for large numbers of elderly and poor patients are allowed greater reimbursements. Until last year, consultants who work for the federal Department of Health and Human Services had been advising those hospitals to calculate their reimbursements a certain way, then abruptly changed their interpretation. Their new interpretation meant the hospitals would receive less money.
When the hospitals were told they had to pay back the additional money they had been collecting, they balked, said Joseph Wood, director of finance at St. Mary’s Regional Medical Center.
Most of the state’s largest hospitals, such as Maine Medical Center in Portland and Central Maine Medical Center in Lewiston, are included, Wood said.
St. Mary’s had been calculating its Medicare reimbursements in the manner previously advised for five years. If forced to pay the money back, it would have to come up with about $2.3 million, Wood said. That money already has been spent, he said.
He likened the reversal to having an Internal Revenue Service advise a taxpayer to take a deduction on an earlier year’s tax return, then years later tell the taxpayer it was bad advice. Therefore, the taxpayer owes back taxes.
“To us it’s the same thing,” Wood said.
About 10 days before filing its 2002 cost report, Wood was notified by the federal agency’s so-called “intermediary” for Maine that the hospital had been miscalculating its reimbursements. Wood said the report had already been completed and it was too late to change it. He said he expected the federal agency to simply correct the miscalculation.
Instead, it triggered an audit, which resulted in a letter by the department’s inspector general’s office telling St. Mary’s it needed to resubmit its report using a method of calculation that would reimburse the hospital $433,502 less than originally calculated.
“I guess the hospital was given bad information,” said Don White, spokesman for the office of the inspector general at the federal department. “We were just looking at the law and what the law requires.”
Wood did not dispute the ruling.
But he does dispute the contention that the hospital ought to pay back money received in prior years based on the bad advice of the government’s intermediaries.
The Maine Hospital Association called an April meeting on behalf of the nine hospitals, and has contacted representatives from the offices of U.S. Sens. Olympia Snowe and Susan Collins.
The issue remains unresolved, said David Winslow, vice president of MHA.
“It’s a very complicated and complex issue,” he said. “We billed exactly how the federal government’s auditors instructed us to file” before they changed their interpretation, he said. “It’s the contention of Maine hospitals that we don’t owe money we think we properly bill.”
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