A Duluth hospital owned by Essentia Health overbilled Medicare for $865,291 for treating people with injectable drugs, a federal audit has found.

The audit by the Inspector General for the U.S. Health and Human Services Department found that Essentia Health Duluth, one of two Duluth hospitals owned by the health care system, billed Medicare for more units of drugs than it actually injected into patients.

The audit, released Tuesday, reviewed $1,261,769 in Medicare payments to Essentia from January 1, 2008, through April 30, 2011. Investigators found that 69 percent of the total amount billed was incorrect.

In a letter from Essentia Health that is part of the audit, it agreed with the findings and said it has already refunded the money. It pledged to do a better job tracking injection billings.

"Specifically, it was determined that a system set up between our pharmacy and billing systems resulted in the erroneous reporting of drug units for selected drugs," wrote Vicki Clevenger, Essentia Health vice president for compliance.