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ARE SOME HOSPITALS OVERCHARGING MEDICARE AND POCKETING THE FUNDS?

Federal investigators are looking into whether some hospitals have been trying to defraud the government by overcharging Medicare and pocketing the money. Audits estimate the government is owed more than $200 million.

Most of the hospitals tried to do the honest thing and give the money back when they found out they'd been paid too much. They were turned away, and investigators are still trying to learn why.A report Tuesday by Richard P. Kusserow, inspector general of the Department of Health and Human Services, cited a trail of sloppy bookkeeping, double billing, destroyed documents and bills for services never performed.

A copy of the report, which is based on audits of 76 hospitals around the country, was obtained by The Associated Press. The results of those audits were mathematically projected by the inspector general to come up with a nationwide estimate of the overpayments.

The report did not identify the hospitals.

While most of the hospitals didn't really try to keep the overpayments, they did not move quickly to find out why their accounts had more money than they were supposed to, the report said.

By and large, they were not attempting to defraud the government, according to Kusserow.

"Thus far we have determined that 57 hospitals did not have billing practices suggestive of a willful desire to defraud Medicare," Kusserow said in testimony prepared for delivery to a House panel Wednesday. "The remaining 19 hospitals are still undergoing further review."

The report gave this breakdown for the overpayments:

-Billing Medicare and private insurance companies for the same service: $123 million.

-Double billing Medicare: $96.6 million.

-Billing for services not performed: $19.4 million.

-Miscellaneous errors: $12.7 million.

-Incorrectly billing for outpatient services: $4.8 million.

-Bills that lack documentation to back them up: $9.4 million.

That comes to a grand total of $265.9 million, more than $100 million higher than estimated in a similar, although smaller, audit done in 1986.

The Medicare system, which provides health insurance for the nation's elderly, is bankrolled by the federal government but is administered by private insurance companies, called intermediaries.

"Preliminary indications are that intermediaries are not placing a sufficiently high priority on recovering overpayments, believing that their primary function is to make payments," the inspector general's report said.

The inspector general found that 52 of the hospitals tried to give money back when they found that they had been overpaid. The companies would not take the money, and the inspector general is still trying to find out why.

The investigators also are particularly interested in five hospitals that kept the cash. One of the hospitals had a policy of notifying the middlemen of the overpayments and if nothing happens after 90 days, it would keep the cash. Then the hospital destroyed the paperwork, the report said.