Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Payments Made By National Heritage Insurance Company For Ambulatory Surgical Procedures For Calendar Year 2001," (A-01-02-00524)

July 23, 2003

Complete Text of Report is available in PDF format (180 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this review was to determine whether physicians' claims identified the proper location of service for ambulatory surgical procedures provided to New England beneficiaries during calendar year 2001.  Based on a statistical sample of 100 ambulatory surgical procedures billed incorrectly, we identified 63 that incorrectly used a non-facility place of service code.  As a result, the National Heritage Insurance Company (NHIC) made payments to physicians that, on average, were about 20 percent higher than the appropriate fee schedule payments.  In total, NHIC processed 5,373 claims with potential overpayments estimated at over $146,000.  These overpayments occurred because physician-billing personnel had not established adequate billing controls and NHIC had not established the payment controls necessary to detect billing errors.  We recommended that NHIC: (1) utilize our data to recover the overpayments estimated at over $146,000; (2) issue guidelines to physicians for billing ambulatory surgical procedures correctly; and (3) conduct post payment data analysis to detect claims billed incorrectly. NHIC generally agreed with our finding and recommendations.