Billing for E/M services susceptible to Medicare fraud

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Billing for evaluation and management services are vulnerable to fraud and abuse, with Medicare payments for E/M services jumping 48 percent, from $22.7 billion to $33.5 billion in a decade, the Office of Inspector General said yesterday.

The agency looked at coding trends from 2001 to 2010, using Part B Medicare claims data, to identify physicians who consistently billed for more complex or more expensive E/M codes. Although the OIG didn't determine whether these claims were appropriate, OIG did find a significant rise in higher level E/M codes. The OIG pinpointed 1,669 doctors--less than one percent of all physicians who performed E/M services in 2010--who consistently billed higher-level E/M codes that year. Those doctors were often repeat offenders as they billed at higher levels than normal at least 95 percent of the time. They practiced in all states, represented similar specialties and treated similar patients.

Medicare paid almost $108 million, an average of $205 more per beneficiary and $43 more per E/M service to physicians who consistently billed higher level codes. The average Medicare payment for E/M service also rose by nearly a third (31 percent) from approximately $65 to $85, according to the report.

"Physicians are responsible for billing the appropriate E/M code to Medicare. It is inappropriate for a physician to bill a higher level, more expensive code when a lower level, less expensive code is warranted," the report states.

The OIG and the Centers for Medicare & Medicaid Services both agreed to continue to educate physicians on proper billing and encourage contractors to review E/M services.

Two healthcare organizations in 2009 paid more than $10 million combined to settle allegations that they fraudulently billed Medicare for E/M services, according to the report. Ascension Health and Genesys Health System in Grand Blanc, Mich., allegedly billed Medicare for more E/M services than were actually delivered to patients and paid $669,000 to settle the claims, according to the U.S. Department of Justice. In a separate case, Visiting Physicians Association in Farmington Hills, Mich., allegedly billed for unnecessary home visits, tests and procedures and paid $9.5 million to resolve the case, according to the Department of Justice.

CMS plans to release more evaluation reports on E/M services, which will determine the appropriateness of Medicare payments for E/M services and the extent of documentation vulnerabilities, it said.

To learn more:
- read the OIG summary and the report (.pdf)
- here's the DoJ statement on Genesys Health System
- see the DoJ statement on Visiting Physicians Association

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