Skip Navigation
United States Flag

An official website of the United States government. Here's how you know >

A New Look for HHS-OIG. Learn More >>

Change Font Size

Audit (A-01-10-00516)

Review of Place-of-Service Coding for Physician Services Processed by Medicare Part B Contractors During Calendar Year 2009

Executive Summary

Based on our sample results, we estimated that Medicare contractors nationwide overpaid physicians $9.5 million for incorrectly coded services provided during calendar year 2009. Physicians correctly coded the claims for 17 of the 100 services that we sampled. However, physicians incorrectly coded the claims for 83 sampled services by using nonfacility place-of-service codes for services that were actually performed in hospital outpatient departments or ambulatory surgical centers (ASC).

To account for the increased overhead expense that physicians incur by performing services in nonfacility locations, Medicare reimburses physicians at a higher rate for certain services performed in these locations. However, when physicians perform these same services in facility settings, such as hospital outpatient departments or ASCs, Medicare reimburses the overhead expenses to the facility, and the physician receives a lower reimbursement rate.

We recommend that the Centers for Medicare & Medicaid Services (CMS) instruct its Medicare contractors to (1) recover approximately $3,000 in overpayments for the sampled services; (2) immediately reopen the claims associated with the nonsampled services, review our information on these claims (which have estimated overpayments of $9.5 million), and work with the physicians who provided the services to recover any overpayments; (3) continue to strengthen their education process and reemphasize to physicians and their billing agents the importance of correctly coding the place of service and the need for internal controls to prevent Medicare billings with incorrect place-of-service codes; and (4) continue to work with program safeguard contractors and, if necessary to coordinate Part A and Part B data matches, with other Medicare contractors to develop a data match that will identify physician services at high risk for place-of-service miscoding and recover any identified overpayments. CMS concurred with our recommendations and described the corrective actions that it was taking or planned to take.

Complete Report

Download the complete report

Adobe® Acrobat® is required to read PDF files.

Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201