Department of Health and Human Services - Office of Inspector General

Review of Outpatient Psychiatric Services Provided by College Hospital for the Calendar Year Ended December 31, 1998

This memorandum is to alert you to the issuance on Wednesday, April 18,200l of our final report entitled, "Review of Outpatient Psychiatric Services Provided by College Hospital for the Calendar Year Ended December 3 1, 1998." A copy of the report is attached. The objective of our review was to determine whether psychiatric services rendered on an outpatient basis were billed for and reimbursed in accordance with Medicare requirements. We found that the College Hospital (Hospital), located in Cerritos, California, did not have adequate procedures in place to ensure that services billed to the Medicare program were reasonable and medically necessary for the treatment of the patients condition. We believe our audit findings are significant in that over $560,000 of the almost $1.8 million of submitted charges from the Hospital, as outlined below, did not meet Medicare's reimbursement criteria.

This audit of hospital outpatient claims was conducted in conjunction with our review of outpatient psychiatric services at psychiatric hospitals, in which our office found significant error rates regarding provider compliance with Medicare requirements. We previously reported the results of several reviews of hospital specific outpatient services. Additional reviews of hospital specific outpatient psychiatric services are in process and the results will be reported to you upon completion of each review.

Our review at the Hospital determined that a significant amount of the outpatient psychiatric charges submitted by the Hospital did not meet the Medicare criteria for reimbursement. Specifically, we identified charges for psychiatric services that were either unreasonable or unnecessary for the treatment of the patients condition, or were not adequately supported by the underlying medical records. Based on a statistical sample, we estimate that at least $567,888 in outpatient psychiatric charges submitted by the Hospital did not meet Medicare criteria for reimbursement.