The HHS Office of the Inspector General (OIG) has issued a report entitled “Medicare Could Save Millions by Strengthening Billing Requirements for Canceled Elective Surgeries.” Based on a review of 100 clams, the OIG estimates that Medicare made $38.2 million in Part A inpatient hospital payments in calendar years 2009 and 2010 for short-stay, canceled elective surgery admissions that were not reasonable and necessary. Specifically, the OIG found that for 80 of the 100 sampled claims, Medicare made payments totaling $345,717 for hospital inpatient claims involving canceled elective surgeries when the condition of the patient was not severe enough to warrant an inpatient admission (i.e., a clinical condition did not exist on admission or a new condition did not emerge after admission that required inpatient care). The OIG recommends that CMS: (1) adjust sampled claims representing overpayments to the extent allowed under the law; (2) strengthen guidance to hospitals; (3) resolve remaining non-sampled claims and recover overpayments to the extent feasible and allowed under the law; and (4) instruct Medicare administrative contractors to emphasize to hospitals the need for stronger utilization review controls for claims that include admissions for elective surgeries that did not occur. CMS generally agreed with the OIG’s recommendations.