Review of Place-of-Service Coding for Physician Services Processed by First Coast Service Options, Inc., During Calendar Years 2004 and 2005

EXECUTIVE SUMMARY:

Physicians did not always correctly code the place of service on claims submitted to and paid by First Coast Service Options, Inc. (First Coast), during 2004 and 2005.  Physicians are required to identify the place of service on the health insurance claim forms that they submit to Medicare Part B carriers to ensure that Medicare does not duplicate payment to the physician and the facility.  Physicians correctly coded the claims for 15 of the 100 sampled services.  However, physicians incorrectly coded the claims for 85 sampled services by using the office place-of-service code for services that were actually performed in outpatient hospitals or ambulatory surgical centers.  Based on these sample results, we estimated that First Coast overpaid physicians $1.5 million for incorrectly coded services provided during the 2-year period that ended December 31, 2005.

We recommended that First Coast (1) recover the $2,900 in overpayments for the sampled services, review our information on the nonsampled services to identify services estimated at $1.5 million that were potentially billed with incorrect place-of-service codes and work with the physicians who provided the services to recover any overpayments, (3) 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) work with the program safeguard contractor to develop a data match that will identify physician services at high risk for place-of-service miscoding and recover any identified overpayments.  First Coast agreed with our recommendations.

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