A federal audit has revealed that a North Carolina-based health care system overbilled Medicare by an estimated $1.7 million for patients treated at two hospitals.

The Charlotte Observer reports the findings on Carolinas Medical Center and CMC-Mercy in Charlotte are part of a report this month from the Department of Health and Human Service's Office of Inspector General.

Carolinas HealthCare said in a statement that it disagrees with the findings and plans to appeal them.

According to the report, the two hospitals lacked adequate controls to prevent incorrect billings. The audit, based on a random sample of 240 Medicare payments in 2014 and 2015, said the two hospitals received at least $1,659,619 in overpayments during the two-year period. The inspector general has recommended the hospitals refund that amount to Medicare.