Coding Trends of Medicare Evaluation and Management Services

WHY WE DID THIS STUDY

Between 2001 and 2010, Medicare payments for Part B goods and services increased by 43 percent, from $77 billion to $110 billion. During this same time, Medicare payments for evaluation and management (E/M) services increased by 48 percent, from $22.7 billion to $33.5 billion. E/M services have been vulnerable to fraud and abuse. In 2009, two health care entities paid over $10 million to settle allegations that they fraudulently billed Medicare for E/M services. CMS also found that certain types of E/M services had the most improper payments of all Medicare Part B service types in 2008. This report is the first in a series of evaluations of E/M services. Subsequent evaluations will determine the appropriateness of Medicare payments for E/M services and the extent of documentation vulnerabilities in E/M services.

HOW WE DID THIS STUDY

Using the Part B Analytics Reporting System, we analyzed E/M services provided to beneficiaries to determine coding trends from 2001 to 2010. Using Part B Medicare claims data, we analyzed physicians' E/M claims to identify physicians who consistently billed higher level (i.e., more complex and more expensive) E/M codes in 2010. We did not determine whether the E/M claims from these physicians were inappropriate.

WHAT WE FOUND

From 2001 to 2010, physicians increased their billing of higher level E/M codes in all types of E/M services. Among these physicians, we identified approximately 1,700 who consistently billed higher level E/M codes in 2010. Although these physicians differed from others in their billing of E/M codes, they practiced in nearly all States and represented similar specialties. The physicians who consistently billed higher level E/M codes also treated beneficiaries of similar ages and with similar diagnoses as those treated by other physicians.

WHAT WE RECOMMEND

CMS concurred with our recommendations to (1) continue to educate physicians on proper billing for E/M services and (2) encourage its contractor to review physicians' billing for E/M services. CMS partially concurred with our third recommendation, to review physicians who bill higher level E/M codes for appropriate action.