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Medicare Lost Billions Due to

Improper Payments A
Detailed View
Inappropriate Medicare payments are always a
major concern. There are
several reports showing that
each year through improper
payments to hospitals and
doctors, Medicare is losing
billions. Earlier in 2012,
M! announced several
demonstration programs that will target some
o" the most common "actors that lead to
erroneous payments.
lear and concise medical
record documentation is
crucial "or physicians to
receive accurate and timely
payment "or services
provided to their patients.
Medicare #ee$"or$!ervice
%##!& program provides hospital insurance
%'art (& and supplementary medical insurance
%'art )& to eligible citi*ens. +hile 'art ( is
provided to persons ,- and over who .uali"y
"or !ocial !ecurity bene"its and pay "or
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hospital, s/illed nursing "acility and hospice
care, 'art ) is optional coverage that pays "or
physician, outpatient hospital, home health,
laboratory tests, durable medical e.uipment
and other services not covered by 'art (.
Inaccurate Payment in Evaluation and
Management Services OI !eport
Incorrect coding includes both upcoding and
downcoding. The level o" an E0M service is
based on seven components such as patient
history, physical e1amination, medical decision
ma/ing, counseling, care coordination, the
nature o" the patient2s problem%s&, and time.
The physicians3 documentation must support
the medical necessity and level o" the E0M
service. E0M coding involves translating
physician patient encounters into "ive digit 'T
codes "or medical billing purposes.
( review conducted by the 4""ice o" the
Inspector 5eneral %4I5&, released in May
2016, estimates that overpayments account
"or 21 percent o" the 782.8 billion spent on
'art ) claims "or evaluation and management
services in 2010. In total, the program paid
7,.9 billion "or healthcare visits that were
improperly coded and lac/ed documentation.
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In 2012, another 4I5 study also concluded
that "rom 2001 to 2010, physicians had
increased their billing o" higher level codes "or
these services in all visit types.
#or review purpose, the medical records
associated with ,-9 Medicare claims were
gathered and certi"ied pro"essional coders were
as/ed to see whether the records justi"ied the
rates charged. More than hal" o" the claims
were "ound to be billed at the wrong rate or
lac/ed documentation to justi"y the service.
!ometimes physicians billed "or a lower$cost
service than the one they delivered, but more
o"ten they billed "or a more e1pensive one.
It was "ound that:
62 percent o" claims "or E0M services in
2010 were incorrectly coded, which
included both upcoding and downcoding
%i.e., billing at levels higher and lower than
warranted, respectively&, and
1; percent were lac/ing documentation
They also "ound that claims "rom high$coding
physicians were more li/ely to be incorrectly
coded or insu""iciently documented than claims
"rom other physicians.
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)ased on the "indings, 4I5 has recommended
M! to:
Educate physicians on coding and
documentation re.uirements
onsider ma/ing E0M claims submitted by
high$coding physicians a priority in medical
review strategies< and
#ollow up miscoded claims identi"ied in the
sample with payment adjustments, as
appropriate.
In 2011, through the omprehensive Error
=ate Testing %E=T& program, M! "ound that
E0M services were -0 percent more li/ely to be
paid "or in error than other 'art ) services.
"PI !eports
(n investigation report by the enter "or 'ublic
Integrity %'I&, a nonpro"it, nonpartisan
investigative news organi*ation in +ashington,
>.. "ound that Medicare (dvantage health
plans received nearly 790 billion in improper
payments between 200? and 2018.
)ased on the analysis o" Medicare (dvantage
enrollment data "rom 2009 through 2011, as
well as thousands o" pages o" government
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audits, research papers and other documents,
the center "inds that:
=is/ score errors led to nearly 790 billion in
@improperA payments to Medicare
(dvantage plans "rom 200? through 2018
B mostly overbillings, as per government
estimates.
In at least 1,000 counties nationwide, ris/
scores o" Medicare (dvantage patients
increased sharply in plans between 2009
and 2011, I increasing ta1payer costs by
more than 78, billion over estimated costs
"or caring "or patients in standard
Medicare.
In more than 200 o" these counties, the
cost o" some Medicare (dvantage plans
was at least 2- percent higher than the
cost o" providing standard Medicare
coverage. The wide swing in costs was
most evident in "ive states: !outh >a/ota,
Cew Me1ico, olorado, Te1as and
(r/ansas.
4"ten payment errors occur due to the use o"
wrong medical codes and inaccurate
documentation. 'hysicians relying on
e1perienced healthcare documentation services
can get rid o" such issues ensure clean claims
and receive reimbursement without delay.