Medicare inappropriately paid $6.7 billion for evaluation and management services claims in 2010 that weren't coded correctly or lacked documentation, according to an HHS Office of Inspector General report.
E/M services are performed by physicians and nonphysician practitioners to assess and manage patients' health. Medicare paid a total of $32.3 billion for these services in 2010, accounting for almost 30 percent of Medicare Part B payments that year. The OIG conducted a medical record review of a random sample of Part B claims for E/M services from 2010 and found 42 percent of the claims were incorrectly coded, meaning they billed at levels either higher or lower than warranted. Additionally, 19 percent of the claims lacked documentation. Furthermore, the OIG found claims from high-coding physicians — those who consistently billed higher level codes, which yield higher payment amounts — were more likely to be incorrectly coded or lack documentation, compared with claims from other physicians.
Therefore, the OIG recommended CMS educate physicians on coding and documentation requirements for E/M services. The OIG also recommended continuing the encourage contractors to review E/M services claims from high-coding physicians and following up on claims for E/M services that were paid for inappropriately.
CMS agreed with the first recommendation. However, the agency didn't agree with the OIG's second recommendation, stating it has already directed a medical review contractor to review claims billed by high-coding physicians and the first phase of these reviews led to a negative return on investment, according to the report. Based on additional reviews, CMS plans to consider the effectiveness of reviewing claims from high-coding physicians compared with other efforts, such as comparative billing reports.
CMS partially agreed with the OIG's third recommendation. "CMS will analyze each overpayment to determine which claims exceed its recovery threshold and can be collected consistent with its policies and procedures," the report states. "For the overpayments identified in this report that will not be collected, CMS could send an educational notice to physicians that billed for these claims."
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