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Inappropriate Medicare Part B payments to acute care hospitals totalled $39.3 million during a four-year period. 

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But they experienced a sharp decline after the federal government introduced new tools to identify and eliminate such mistakes.

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Audit of improper Medicare payments to acute care hospitals for outpatient services provided to beneficiaries already residing in another facility, such as critical access or long-term care hospital,

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Researchers examined the inpatient claims from psychiatric facilities, critical access hospitals, long-term care hospitals, and inpatient rehab centers.

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Then they looked for any overlaps in the outpatient claims from acute care facilities.

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After May 2019, however, there was a sharp decline in erroneous payments to acute care hospitals. The method used to identify overpayments is the cause. 

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To a Medicare Administrative Contractor (MAC), a third party that handles Medicare claims, providers must deliver a shared working file.

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To notify the MAC of any potential problems, the file contains modifications to claims both before and after payment.

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The common functional file edits, however, weren't functioning properly prior to May 2019.

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OIG report stated that 2021. In order to find and recover any erroneous payments received beyond our audit period, a more thorough examination of the modifications is required. 

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Office of Inspector General (OIG) demanded that CMS take action in order to recover the $39.3 million.