Policy & oversight
Federal Audit Finds Medicare Billing Errors in 15 Percent of Claims Reviewed at South Carolina Hospital
An OIG compliance review of McLeod Regional Medical Center found 17 of 115 sampled claims contained errors, resulting in net overpayments of 38,676 dollars tied mainly to inpatient admission documentation and the two-midnight rule.
By the Goodsurance editorial teamSeptember 19, 2026
The HHS Office of Inspector General released a compliance audit of McLeod Regional Medical Center in South Carolina, finding that the hospital did not meet Medicare billing requirements for 17 of 115 sampled claims, resulting in net overpayments of 38,676 dollars.
The audit covered Medicare claims paid from January 2020 through December 2021, a period when federal reviewers identified McLeod's claims as elevated risk for noncompliance. The 115 sampled claims totaled 1,516,496 dollars in Medicare payments under review.
OIG found billing errors in 17 of 115 Medicare claims reviewed at a South Carolina hospital, resulting in 38,676 dollars to be repaid.
Most errors traced to documentation gaps. Some inpatient stays did not satisfy the two-midnight rule, which generally requires a physician to expect a patient to remain hospitalized for at least two consecutive midnights before the inpatient rate applies. Others involved admissions to an inpatient rehabilitation facility where documentation of medical necessity or admission criteria was insufficient. A smaller share had coding or outpatient billing errors.
Auditors concluded the errors occurred because hospital staff did not consistently follow the facility's own policies and procedures in those risk areas. The OIG recommended that McLeod refund the overpayments, conduct follow-up internal audits on future claims in the same categories, and provide additional training to clinical and billing personnel.
The hospital agreed with most findings, said it would refund the overpayments, and described corrective steps already taken. The OIG did not allege fraud or intentional misconduct. Similar compliance audits are conducted at hospitals across the country on a rolling basis.
In plain words
A government watchdog checked billing records at McLeod Regional Medical Center, a hospital in South Carolina. Auditors looked at 115 Medicare claims worth about 1.5 million dollars.
They found that 17 of those claims had mistakes. Those errors led to 38,676 dollars in extra payments to the hospital.
Most problems were about paperwork. Some patients were billed as inpatients when they should have been outpatients. Others were admitted to a rehab unit, but the records did not show it was medically necessary.
The hospital said it will pay the money back and has already fixed the problems. No one was accused of fraud.
Medicare does these kinds of reviews at hospitals all over the country to check that billing follows the rules.
Understand the basics first
Source: HHS Office of Inspector General
Read at the source →