CMS instruct Fls to identify hospitals with high outlier payments

In what CMS calls a "progressive compliance strategy," CMS recently issued a program memorandum (PM) directing its fiscal intermediaries (FIs) to identify hospitals that have had high outlier payments. CMS says this strategy is designed to place the greatest level of scrutiny on hospitals that present

"the greatest risk to the [Medicare] program." FIs will perform data analysis to identify those hospitals with high outlier payments and an increase of 20 percent or more in average charges per case. The FIs will analyze discharges that occurred during October and November of 2002. Charges will be reviewed based on 2000, 2001, and 2002 cost reporting periods or federal fiscal years. Depending on the level of outlier payments identified, FIs will perform additional reviews including comprehensive field audits, medical reviews using Quality Improvement Organizations (QIOs), and uniform charge reviews. CMS says that further instructions are forthcoming. To read the PM, go to www.cms.hhs.gov/manuals/pm_trans/A02126.pdf.