Abbott Northwestern Hospital Overbilled Medicare By $8 Million

January 5, 2017   

CONTACT: Kristin Walter
(202) 898-0995


Abbott Northwestern Hospital Overbilled Medicare By $8 Million

Washington, D.C. – A January 2017 report by the U.S. Department of Health and Human Services Office of Inspector General (OIG) found that Abbot Northwestern Hospital in Minneapolis, Minn., overbilled Medicare in 47 percent of billing claims, resulting in $8,038,356 in overpayments from 2013 to 2014. 

According to the Council for Medicare Integrity, a nonprofit organization that advocates for proper Medicare billing, the hospital’s improper billing rate is part of a nationwide problem.  The Medicare improper payment rate stands at 12.1 percent and has been above the legal billing error rate threshold of 10 percent for the past three consecutive years. During that time, Medicare overpaid hospitals and other healthcare providers $125 billion for services that were unnecessary or billed improperly.

Recently, the Medicare Trustees released a report warning that at current spending levels the program will be bankrupt by 2028 – just 11 years from now – causing many policymakers to have grave concerns about the future of the program.

Congress mandated the creation of the RAC program to review Medicare claims, identify billing errors and return mis-billed funds back to the Medicare Trust Fund. Since the program began in 2009, RACs have returned more than $10 billion in improper payments to the Trust Fund and more than $800 million in underpayments to providers. Recovery auditing has been credited with extended the life of the Medicare program by two full years. Unfortunately, new Centers for Medicare and Medicaid Services (CMS) rules have scaled back RAC reviews, now allowing a Medicare provider that bills erroneously 91 percent of the time to have no more than 5 percent of their claims reviewed for accuracy.

“The Medicare insolvency date continues to trend in the wrong direction,” said Kristin Walter, spokesperson for the Council for Medicare Integrity. “There is a significant long-term shortfall that needs to be addressed to keep the program afloat. The government has great tools at their disposal that could help bolster the solvency and longevity of the program, but those tools are now being used at half capacity. It’s time to stop giving our tax dollars away to line the pockets of hospitals and instead recover them to be used to cover the future healthcare needs of our nation’s seniors.”

For more information, please visit: www.medicareintegrity.org.

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About the Council for Medicare Integrity

The Council for Medicare Integrity is a 501(c)(6) non-profit organization. The Council’s mission is to educate policymakers and other stakeholders regarding the importance of healthcare integrity programs that help Medicare identify and correct improper payments.



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