OIG cracks down on place-of-service overpayments

A blue door with two small holes in it.Is your practice using proper place-of-service codes? If not, you’re not alone. According to a new report from the HHS Office of Inspector General, Medicare contractors may have overpaid physicians to the tune of $33.4 million for incorrectly coded services provided between January 2010 and September 2012.

Why? It appears that the services were performed in facilities, but physicians coded them as if they were performed in non-facilities.

By using the wrong place-of-service code overpayments can result because Medicare Part B pays more for some physician services when they are provided in offices or freestanding clinics instead of in hospital departments, including provider-based entities. The correct place-of-service code ensures that Medicare correctly reimburses the physician for the overhead portion of the service.

The report provides the following example:

A Medicare contractor paid a physician $10,664 for performing an angioplasty procedure coded as though it had been performed in the physician’s office. Our analysis showed that the physician had actually performed this procedure in a hospital outpatient location and that a Medicare contractor had reimbursed the hospital for the overhead portion of the service. If the claim had been coded correctly, the physician would have received a payment of $613, which would not have included overhead costs. Therefore, Medicare overpaid the physician $10,051.

OIG attributes overpayments to “internal control weaknesses at the physician billing level and to insufficient post-payment reviews at the Medicare contractor level to identify potential place-of-service billing errors.â€

So what does this mean for physicians and other providers? The OIG is recommending that the Centers for Medicare & Medicaid Services direct its contractors to do the following:

  • Immediately recover $7.3 million in potential overpayments from physicians who incorrectly coded physician services performed in ASC’s.
  • Monitor the recoveries from the 87 physicians who expressed their intent to refund   approximately $7.1 million in potential overpayments for incorrectly coded physician services performed in hospital outpatient locations.
  • Recover, in accordance with CMS policies, the additional $19 million in potential overpayments related to the services that may have been performed in hospital outpatient locations that the OIG identified through its 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.
  • 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.

This isn’t the first time this has happened. Previous OIG reviews found that Medicare Part B contractors overpaid physicians approximately $62.7 million during calendar years 2005 through 2009.

The OIG doesn’t take these matters lightly. As part of its actions relating to this report it referred certain physicians with potential place-of-service coding overpayments to the Office of Counsel to the Inspector General for civil monetary penalty evaluation. Once CMS identifies an overpayment, there are strict guidelines that must be adhered to when it comes to the appeals and recoupment process.

The Health Law Offices of Anthony C. Vitale has extensive experience representing clients in audits and overpayments and we can represent your interests through all of the stages of the overpayment appeals process in an effort to achieve the most successful results.

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The Health Law Offices of Anthony C. Vitale