Review of Place of Service Coding for Physician Services Processed by National Heritage Insurance Company During Calendar Years 2002 and 2003

EXECUTIVE SUMMARY:

The objective of our audit was to determine whether physicians properly coded the place of service on claims submitted to and paid by National Heritage Insurance Company (NHIC). Physicians did not always properly code the place of service on claims submitted to and paid by NHIC. Specifically, physicians incorrectly coded the place of service on 81 of the 100 sampled claims by using the office place of service code even though they performed the services in an outpatient hospital or an ambulatory surgical center. We recommended that NHIC: recover the $5,423 in overpayments for sampled services, review the additional 122,054 services estimated at $4,249,190 that were potentially billed with an incorrect place of service code and work with the physicians who provided the service to recover the overpayments, strengthen the education process, and work with the payment safeguard contractor to develop a data match that will identify high-risk physician services. NHIC generally agreed.

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