Investigative Group

Medicare Overpaid 33 San Francisco Hospitals Millions Using Misreported Wage Data

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Ethan Barton Managing Editor
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Medicare overpaid 33 hospitals in the San Francisco area more than $5 million after the medical center with the nation’s most generous employee compensation inaccurately reported data on wages paid to its workers, a government watchdog reported Monday.

“Alta Bates Medical Center did not comply with all Medicare requirements for reporting wage data in its fiscal year 2010 Medicare cost report,” the Department of Health and Human Services Inspector General reported. “We estimated that, as a result, in 2014 Medicare overpaid the Medical Center $154,000 and overpaid 32 other hospitals in two [nearby regions] a total of approximately $5.3 million.”

Certain hospitals that receive Medicare funds must report data for wages and fringe benefits. The Centers for Medicare and Medicaid Services (CMS), which manages Medicare, compares that data to other wages paid in the region to fix payment levels. (RELATED: This Firm Stole $7.5 Million From Medicare For Unneeded Services)

“Our prior reviews … found that hospitals often inaccurately reported wage data, which resulted in increased Medicare payments,” the report said. (RELATED: Report: Medicare Will Become Insolvent Two Years Earlier Than Previously Predicted)

California’s Alta Bates Medical Center “inaccurately reported wage data … by not reporting, misclassifying, or overstating certain salaries, associated hours, and wage-related costs,” the report continued. “As a result, the Medical Center overstated its occupational-mix-adjusted average hourly wage rate by $5.78.”

The IG reviewed the Alta Bates Medical Center because its average hourly wages were the highest in the nation. The center’s misreporting altered the labor index in the region, which affected Medicare payments to other nearby hospitals.

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