Medicare is overpaying hospitals millions of dollars every year due to incorrectly coded claims for patient clinic visits, according to a report from the HHS Office of Inspector General.
Hospitals receive evaluation and management payments from Medicare for three types of services: clinic visits, emergency department visits and critical care services. Physicians provide the E/M services at a physician office or some other type of outpatient/ambulatory facility. In addition, payment to providers varies on whether the patient is considered to be "new" or "established," based on whether the patient has a medical record at the hospital.
The OIG sampled Medicare payments from 2010 and 2011 for 110 random line items from an undisclosed number of hospitals. The agency found only two of the 110 sample claims were correctly billed. Most of the errors stemmed from hospitals incorrectly labeling the patient as "new" when they should've used "established," as well as erroneously using codes that did not describe the levels of services provided.
Based on the sample audits, the OIG estimated more than $7.5 million in Medicare funds were incorrectly paid to hospitals in 2010 and 2011 for E/M services. Officials recommended CMS beef up compliance controls and guidance for the billing of clinic visits.
CMS said it has already made some of the suggested changes. For example, effective this past January, CMS replaced the 10 HCPCS codes for E/M services with a single HCPCS code that describes all outpatient clinic visits.
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