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Transcript for audio podcast: Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010

From the Office of Inspector General of Department of Health and Human Services

[Dwayne Grant] I'm Dwayne Grant, Regional Inspector General for the Office of Evaluation and Inspections, speaking with Rachel Bessette, a program analyst, about a report called "Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010." Rachel, sounds like a significant piece of work. Could you tell us about this topic?

[Rachel Bessette] Of course. Evaluation and management, or E/M, services are patient visits that are generally performed by physicians to assess and manage a person's health.

[Dwayne Grant] So why did you look into E/M services?

[Rachel Bessette] Prior work shows that physicians are more likely to incorrectly bill for E/M services, compared to other services. Medicare spends a lot of money on E/M services, and since there is a high error rate with billing, we decided to take a look.

[Dwayne Grant] Is this the first time OIG has completed work in this area?

[Rachel Bessette] Actually, no. In 2012, we found that physicians increased their billing of higher level E/M codes from 2001 to 2010. These higher level codes represent more complex visits, and higher reimbursement rates for physicians. We also identified nearly 1,700 high-coding physicians who consistently billed these higher level codes in 2010.

[Dwayne Grant] So were those physicians appropriately billing for E/M services?

[Rachel Bessette] Not always. We found that 42 percent of claims for E/M services were not coded correctly. This included both upcoding, meaning that a lower level code was more appropriate, and downcoding, which is when a higher level code should have been billed.

[Dwayne Grant] What else did you find?

[Rachel Bessette] We also found that 19 percent of claims for E/M services lacked documentation. For these claims, physicians failed to properly document their medical records or did not provide them to us.

[Dwayne Grant] How much did this cost Medicare?

[Rachel Bessette] In total, Medicare paid $6.7 billion dollars for E/M service claims that were incorrectly coded and/or lacked documentation. That's 21 percent of Medicare payments for E/M services in 2010.

[Dwayne Grant] $6.7 billion dollars is a lot of improper payments. What else did you find?

[Rachel Bessette] We also found that high-coding physicians' claims were more likely to be incorrectly coded or insufficiently documented, compared to other physicians' claims.

[Dwayne Grant] Interesting. So, what did OIG ultimately recommend based on these findings?

[Rachel Bessette] Well, we recommended three things to CMS. First, educate physicians on coding and documentation requirements for E/M services. Second, continue to encourage contractors to review E/M billing by high-coding physicians. Finally, follow up on claims for E/M services that Medicare paid in error.

[Dwayne Grant] Did CMS agree with OIG's recommendations?

[Rachel Bessette] Partially. CMS agreed with our first recommendation-to educate physicians-and partially agreed with our third recommendation-to follow up on claims for E/M services that were paid in error. However, CMS disagreed with our second recommendation, which was to continue encouraging contractors to review E/M services billed for by high-coding physicians.

[Dwayne Grant] Why did CMS disagree?

[Rachel Bessette] Well, CMS contractors have already started to review high-coding physicians' claims in response to our prior work. Before encouraging its contractors to conduct additional reviews, CMS wants to determine if other efforts, like Comparative Billing Reports, would be more cost-effective.

[Dwayne Grant] Rachel, thank you for sharing this important work.

[Rachel Bessette] Thank you.


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