Investigators Focus on Medicare Plan B Payments in 2012

In the fall of last year, the Office of Inspector General (OIG) for the Department of Health & Human Services (HHS) released its Fiscal Year 2012 workplan which identifies new and already-in progress programs of focus for the OIG.

The OIG’s “mission is to protect the integrity Department of Health & Human Services (HHS) programs as well as the health and welfare of program beneficiaries.” It accomplishes this mission by combating fraud, waste and abuse largely in the Medicare and Medicaid programs.

A major theme in the OIG’s workplan is the agency’s emphasis on reasonable and medically necessary services which must be properly documented consistent with federal laws and regulations. See Social Security Act, § 1862(a)(1)(A), § 1833(e), and 42 CFR, § 410.

Below is a brief look at some of the OIG’s programs analyzing Medicare Part B payments in 2012:

1. Compliance with Assignment Rules. Pursuant to Social Security Act, § 1842(h)(1), physicians participating in Medicare agree to accept payment on an “assignment” for all items and services furnished to individuals enrolled in Medicare. Such payment must be accepted in full. The OIG plans to review the extent of provider compliance with the assignment rules as well as the extent to which beneficiaries are inappropriately billed in excess of amounts allowed by Medicare.
2. High Cumulative Part B Payment. The OIG defines a high cumulative payment as “an unusually high payment made to an individual physician or supplier, or on behalf of an individual beneficiary, over a specified period.” Prior OIG work suggested that high cumulative payments to Part B providers may be a sign of inappropriate conduct resulting in possible overpayments. As part of the agency’s plan to combat billing errors and fraud and abuse, the OIG will review existing payment systems controls to determine whether such controls are effective at identifying high cumulative part B payments. This is a new effort by the OIG.
3. Place of Service Errors.  The OIG plans to review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. (See 42 CFR § 414.32.)
4. Incident-To Services. Medicare permits reimbursement for certain services billed by physicians but which are actually performed by nonphysicians incident to a physician office visit. In this newly established program, the OIG will review physician billing for “incident-to” services to determine whether payment for such services had a higher error rate than that for non-incident-to services. The OIG’s concern is that incident-to-services may be vulnerable to overutilization and expose Medicare beneficiaries to care that does not meet professional standards of quality.
5. Impact of Opting Out of Medicare. While physicians are permitted to enter into private contracts with Medicare beneficiaries, see Social Security Act, § 1802(b), they may not thereafter submit claims to Medicare for reimbursement. Under this new program, the OIG will evaluate the extent to which physicians are opting out of Medicare, whether after opting out physicians continue submitting claims to Medicare, and analyze the potential impact of opting out on beneficiaries.
6. Chiropractors. Chiropractors have been under the OIG’s radar ever since the OIG determined in its 2009 report, which analyzed chiropractice services performed in 2006, that “Medicare inappropriately paid $178 million (out of $466 million) for chiropractic claims for services that medical reviewers determined to be maintenance therapy ($157 million), miscoded ($11 million), or undocumented ($46 million).” The aim of this new effort by the OIG is to review Medicare Part B payments for chiropractic services to determine whether such payments were for treatment by means of manual manipulation of the spine, which is permitted and reimbursable, see 42 CFR § 440.60, versus maintenance therapy, which is not considered to be medically reasonable or necessary and is therefore not reimbursable.
7. Evaluation and Management Services:  Trends in Coding of Claims. According to the OIG, Medicare paid $32 billion for evaluation and management (E/M) services in 2009, “representing 19 percent of all Medicare Part B payments.” E/M codes describe the type, setting, and complexity of services provided and the patient status, such as new or established. To ensure that payments are made properly according to patient need and level of services rendered, the OIG will review E/M claims to identify trends in the coding of E/M services from 2000-2009. The OIG will also focus on providers that exhibited questionable billing patterns for E/M services in 2009.
8. Evaluation and Management Services: Potentially Inappropriate Payments, Review of EHR. Electronic Health Records (EHR) have the potential to speed up the documentation process for providers but they are not without risk. One of the problems is the ability of providers to copy and paste in certain systems or auto fill in the medical chart with the consequence that patients’ medical charts start to resemble each other. The government is aware of this issue and in FY 2012, the OIG plans to review multiple E/M services for the same providers and beneficiaries to identify EHR documentation practices associated with potentially improper payments.  The OIG has stated that “Medicare contractors have noted an increased frequency of medical records with identical documentation across services.  Medicare requires providers to select the code for the service based upon the content of the service and have documentation to support the level of service reported.”
9. Part B Imaging Services:  Medicare Payments. Reimbursement for imagining services has been a hot-topic for some time because there is a concern from the auditors about the overutilization of this service. In response, the OIG plans to review payments made for Part B imaging services to determine whether they reflect the expenses incurred and whether the utilization rates reflect industry practices.
10. Diagnostic Radiology:  Excessive Payments. The OIG will review Medicare payments for high-cost diagnostic radiology tests to determine whether they were medically necessary and the extent to which the same diagnostic tests are ordered for a beneficiary by primary care physicians and physician specialists for the same treatment.
    
11. Independent Therapists:  Outpatient Physical Therapy Services. As a result of prior reviews, the OIG  has identified “claims for therapy services provided by independent physical therapists that were not reasonable, medically necessary, or properly documented.” In FY 2012, the OIG’s focus will be on “independent therapists who have a high utilization rate for outpatient physical therapy services,” because Medicare will not pay for items or services that are not reasonable and necessary.
12. Laboratories:  Trends in Laboratory Utilization. According to the OIG, in 2008, “Medicare paid about $7 billion for clinical laboratory services, which represents a 92 percent increase from 1998.  Much of the growth in laboratory spending was the result of increased volume of ordered services.” In FY 2012, the OIG plans to review trends in laboratory utilization under Medicare, such as in the types of laboratory tests and the number of tests ordered, and evaluate how physician specialty, diagnosis, and geographic differences in the practice of medicine affect physicians’ laboratory test ordering.
13. Payments for Services Ordered or Referred by Excluded Providers. Medicare will not reimburse for any services rendered, ordered, or prescribed by excluded providers or entities. See Social Security Act, §§ 1128 and 1156, and 42 CFR § 1001.1901. To further that goal, the OIG will review the nature and extent of Medicare payments for services ordered or referred by excluded providers (those who have been barred from billing Federal health care programs) and examine CMS’s oversight mechanisms to identify and prevent payments for such services.The OIG runs a website with a searchable database that enables users to search excluded providers by name of an individual or entity.