The Department of Health and Human Services’ Office of Inspector General (OIG) released a report on May 8 that found Medicare contractors potentially overpaid physicians by approximately $33.4 M for services performed between January 2010 and September 2012 due to incorrect coding. The objective of this review was to determine whether physicians correctly coded non-facility places of service on Part B claims submitted to Medicare contractors.
The report attributed the overpayments to "internal control weaknesses" at the physician billing level and to insufficient post-payment reviews by Medicare contractors to identify potential place-of-service billing errors.
The $33.4 M consisted of:
$7.3 M in potential overpayments for incorrect non-facility place-of-service billing for services performed in ASCs;
$7.1 M in incorrect non-facility place-of-service billing for services performed in hospital outpatient locations (87 physicians agreed that some claims had been coded incorrectly and agreed to refund the overpayments);
$800,000 in potential overpayments for the services of 33 judgmentally selected physicians who stated they were not responsible for the incorrect billing, who did not agree that some claims had been coded incorrectly, or who did not respond to our inquiries; and
$18.2 M in potential overpayments for the services of the remaining unselected hospital outpatient location-based claims.
The OIG recommends that CMS direct its Medicare contractors to:
Initiate the immediate recovery of $7.3 M in potential overpayments from physicians who incorrectly coded physician services performed in ASCs;
Monitor the recoveries from the 87 physicians who expressed their intent to refund approximately $7.1 M in potential overpayments for incorrectly coded physician services performed in hospital outpatient locations;
Recover the additional $19 M in potential overpayments related to the services that may have been performed in hospital outpatient locations that CMS identified through their computer match;
Continue to educate physicians and billing personnel on the importance of internal controls to ensure the correct place-of-service coding for physician services; and
Expand and strengthen efforts to perform coordinated data matches of nonfacility-coded physician services and facility claims to identify physician services that are at a high risk for place-of-service miscoding and recover overpayments.
Previous OIG reviews have reported that Medicare Part B contractors overpaid physicians approximately $62.7 M during calendar years (CYs) 2005 through 2009 for physician services that were performed at “facility locations” but billed as if the services were performed at “non-facility locations.”