Improper coding for doctors' evaluation and management visits costs Medicare billions, OIG report

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Documentation coding errors related to routine patient evaluation and management (E/M) visits are costing the Medicare program billions of dollars in improper payments a year — nearly $7 billion alone in 2010 — according to a new government report. But the investigation involved few claims involving nursing homes.

Those losses were the result of bills that were incorrectly coded and/or lacking documentation, the Department of Health and Human Services Office of Inspector General report said. In all, 42% of claims for E/M services in 2010 were incorrectly coded (either higher or lower than warranted), and 19% lacked proper documentation.

Only about 4% of the visits the OIG analyzed were for initial or subsequent skilled nursing care, according to the report. The highest number of sampled claims — about 63% — were for “established patient office/outpatient visits.”

Nearly a third of all Part B payments in 2010 involved evaluation and management services, according to the OIG. The agency reports that such payments jumped considerably in 2001, when physicians increased their billing of higher level codes. The agency also repeated an earlier Centers for Medicare & Medicaid Services finding that at least half of all E/M services “are more likely to be paid in error” than other Part B Services.

The OIG recommended efforts to better educate physicians on proper coding and documentation.

Earlier this year, HHS officials revealed that the Medicare program lost about $50 billion overall last year from so-called “improper payments.”

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