On July 28th, a report (see REPORT ) was sent to the Centers for Medicare & Medicaid Services (CMS) from the Inspector General’s office that will have widespread attention in the near future.  And it’s without question a physician issue, not a hospital one.   If you’re a doctor it will affect your wallet or purse, so you might want to know this.

The report resulted from a study of coding errors causing overpayments to physicians.  Medicare payments were made for patient encounters at non-facility locations that actually took place at hospital outpatient departments or ambulatory surgical centers (ASCs).   As everyone knows, non-facility encounters reimburse at a higher rate than if the encounter was at a facility such as a hospital in order to help cover the overhead expenses of the physician.

Straight Quotes from the Report

“Physicians are required to identify the place of service on the health insurance claim forms that they submit to Medicare contractors. The correct place-of-service code ensures that Medicare does not incorrectly reimburse the physician for the overhead portion of the payment if the service was performed in a facility setting.”

The report continues.    “Our audit covered 484,218 nonfacility-coded physician services valued at $42,385,710 that were provided in calendar year 2007 and that matched hospital outpatient or ASC claims for the same type of service provided to the same beneficiary on the same day.”

In this study, “Physicians correctly coded the claims for 10 of the 100 services that we sampled. However, physicians incorrectly coded the claims for 90 sampled services by using nonfacility place-of-service codes for services that were actually performed in hospital outpatient departments or ASCs. The incorrect coding resulted in overpayments totaling $4,710.”

“Based on these sample results, we estimated that Medicare contractors nationwide overpaid physicians $13.8 million for incorrectly coded services provided during calendar year 2007. We attribute the overpayments to internal control weaknesses at the physician billing level…”, etc.

But That Was from the Year 2007

Yes it was.  But think about it.   In their random sampling, 90% of the time the place-of-service codes were wrong!   The first thing I’d want to know if I were a physician is whether the coding in my office is being done correctly in 2010.    Am I sure my in-house biller or billing company is doing it right?     If not, could I be setting myself up for a RAC Audit?    Could they discover a “pattern of abuse” that then triggers a ZPIC investigation?

Your RAC Is On Its Way

Trust me when I say this – even if your RAC hasn’t yet audited you or a doctor near you, it’s coming.    Just in the past 30 days, physician audits have increased in pockets all over the country.   In fact, we’ve learned of more physician audits in the past month than the previous six months combined.

If you sense that maybe it would be wise to check into your office’s compliance with Medicare guidelines, you’re probably right.   Help is as close as an email away.

Winston Creath is an independent healthcare consultant working in the compliance and revenue cycle management arenas on behalf of physicians and clinics.  He serves as President of National Business Solutions of GA, LLC.  He can be reached at winston@nbsoga.com for questions or comments.

About

Winston Creath is an independent executive healthcare consultant working in the compliance and revenue cycle management arenas on behalf of physicians and clinics. He serves as President of National Business Solutions of GA, LLC. He can be reached at winston@nbsoga.com for questions or comments.

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