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Associated Press, Published September 13 2013

Audit: Sanford owes Medicare $65,000 for overbilling in Fargo

SIOUX FALLS, S.D. — An audit shows that Sanford Health's flagship hospital in Fargo owes the federal government $65,000 for overbilling Medicare, though officials with both the hospital and government call it a relatively small mistake.

Inspectors with the U.S. Department of Health and Human Services reviewed 252 inpatient and outpatient claims at the Fargo, N.D., hospital and found 26 billing errors for patients in the Medicare system, the government insurance program to pay for health care for elderly residents.

Two of the cases were in 2009, and the other 24 were in 2010 and 2011. The audit said the hospital "did not have adequate controls" to prevent the overbilling.

Dennis Millirons, president of the Fargo hospital, called it an "infinitesimal" mistake that needs to be put into context. The hospital had 148,000 Medicare claims in 2010 and 2011 totaling $222 million, he said.

"Considering the complexity of billing and the process of coding and everything that goes into it, it is frankly an extremely small error rate that actually demonstrates a very, very good record," he said.

Mike Fierberg, a spokesman in Denver for the federal Centers for Medicare and Medicaid Services, acknowledged that the problem appeared small.

"Really, I think they should be commended for having such a very good audit report," he said.

The hospital in Fargo was known as MeritCare until it merged with Sanford of Sioux Falls, S.D., in 2009, creating the new Sanford Health network. Donald White, spokesman for the Office of Inspector General at Health and Human Services in Washington, D.C., said this round of audits did not review records of any other Sanford hospitals.

Sanford, with more than three dozen hospitals and 140 clinics in eight states, bills itself as the largest not-for-profit rural health care provider in the country.