Report Seeks Review of Medicare Pay

Medicare overpaid specialty hospitals by $800 million in 2000 because the U.S. government wasn’t adequately screening payment claims, according to a report.

Medical centers specializing in psychiatric, rehabilitation and long-term care are paid differently than other hospitals that treat Medicare patients and weren’t scrutinized closely, the inspector general for the Department of Health and Human Services said.

About 9.2% of the $8.7 billion in specialty hospital payments made by Medicare, the U.S. health insurance program for the elderly and disabled, were erroneous because the services weren’t needed or “reasonable,” the report said.

The agency that runs Medicare has told contractors they may review payments to specialty hospitals, the report said.