Medicare Audit Claims University of Miami Hospital Owes Government $3.7 Million

Wednesday, October 9, 2013
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The University of Miami Hospital allegedly owes Medicare $3.7 million. This is according to an audit report of the hospital’s billing practices that found the hospital allegedly overbilled the health care program in 2009 and 2010. The report was released on October 8, 2013, by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG). According to a letter from the University of Miami Hospital’s Chief Financial Officer (CFO), the hospital is contesting the Inspector General’s method for calculating the amount of the alleged overpayment.

Click here to read the report from the HHS OIG.

Repayment Amount Calculated by Extrapolation.

According to the HHS OIG report, the audit covered $22.8 million in Medicare payments to the hospital for more than 2,000 “at risk” patient claims. From that group of claims, investigators randomly selected a sample of 200 inpatient claims for review. Out of the 200 reviewed claims, investigators allegedly found 68 claims that did not comply with agency rules. Based on those findings, investigators extrapolated the total amount of overpayments to be around $3.7 million.

In a six-page letter to HHS auditors, the CFO of the University of Miami Hospital stated that he will help improve billing controls at the hospital. However in the letter, he stated he had an issue with the extrapolation method used to calculate the sum the hospital owed. Click here to read the letter from the CFO to the HHS auditors.

Extrapolation is an extremely common practice in determining Medicare overpayments. We see it in our practice time and time again. In a Medicare or Medicaid audit, if the auditor finds errors in excess of a certain percentage, then the auditor is allowed to use a complex extrapolation formula.

Extrapolation formulas use statistical sampling techniques to take the results of a small sample of records examined and apply them to the entire universe of claims that have been paid. This can result in having a small actual overpayment multiplied into a much larger repayment amount. For example an actual overpayment amount of $3,000 can become an overpayment of $300,000.

In many cases that we have seen, such formulas contain errors and are subject to attack because they are not accurate or credible. An incorrect sample size maybe used or selective claims may skew the results. There are many possible errors that can occur in making the calculations. We will discuss these in a future blog.

Issues with Billing Found in Audit.

Investigators allegedly found questionable claims using computer matching, data mining and analysis of inpatient claims, according to an article in the Miami Herald. The hospital allegedly overbilled Medicare in a number of different ways including incorrectly billing for inpatient stays, using incorrect diagnostic codes and, among others, billing Medicare separately for a patient’s discharge and readmission on the same day.

To read the entire Miami Herald article, click here.

Practice Tips for Responding to a Medicare Audit.

If you or your practice is the subject of a Medicare audit then there is some item you have claimed as a Medicare provider or the amount of claims Medicare has paid in a certain category that has caused you or your practice to be audited. If you find yourself the subject of a Medicare audit, click here to read tips for responding to a Medicare audit.

Contact Health Law Attorneys Experienced in Handling Medicaid Audits, Investigations and other Legal Proceedings.

The Health Law Firm’s attorneys routinely represent physicians, dentists, orthodontists, medical groups, clinics, pharmacies, assisted living facilities (AFLs), home health care agencies, nursing homes, group homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at


What do you think of this audit? Have you had any experience with the extrapolation method used in audits? Tell us your thoughtful comments below.


Chang, Daniel. “University of Miami Hospital Overbilled Medicare $3.7 Million, Audit Says.” Miami Herald. (October 8, 2013). From:

Caulton, Darryl. “University of Miami Hospital Comments.” Department of Health and Human Services Office of Inspector General. (July 12, 2013). From:

Ritchie, Brian. “Department of Health and Human Services Office of Inspector General Medicare Compliance Review of University of Miami Hospital.” Department of Health and Human Services Office of Inspector General. From:

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Tag Words: Medicare, Medicare fraud, Medicare investigation, Florida Medicare audit, Florida Medicare, Florida Medicare Program, Medicare audit, Medicare claims, overbilling, overpayments, overbill Medicare, Medicare investigation, hospital audit, Miami Hospital Medicare audit, Miami Hospital overbill Medicare, extrapolation, Department of Health and Human Services (HHS), Office of Inspector General (OIG), defense attorney, defense lawyer, Medicare fraud defense attorney, Medicare fraud defense lawyer, Florida attorney, Florida lawyer, The Health Law Firm

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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