Poorly coded doctor claims cost Medicare $33 million: OIG report

The Health & Human Services' Inspector General is advising the agency to have its Medicare contractors chase down more than $33 million that might have been overpaid to physicians as a result of seemingly innocent coding errors for services.

The discovery came after an audit of claims from January 2010 through September 2012, the OIG noted in a new report released late last week.

The claims were for services physicians performed in ambulatory care centers and other outpatient settings. But coding errors led contractors to believe they were performed in physicians' offices or clinics, the OIG found. The Congressional watchdog attributed the overpayments to “internal control weaknesses at the physician billing level and to insufficient post-payment reviews at the Medicare contractor level to identify potential place-of-service billing errors.”

For contractors, the easy part will be the 87 physicians who expressed their intent to refund approximately $7.1 million in potential overpayments for incorrectly coded services they rendered in hospital outpatient locations, according to report authors. Another $7.3 million in potential overpayments could possibly be recovered from physicians who incorrectly coded physician services performed in ambulatory surgical centers. The biggest chunk of $19 million in potential overpayments will have to be traced for services that may have been performed in hospital outpatient locations.

The OIG also recommended that the Center for Medicare & Medicaid Services continue to educate physicians and billing personnel on the importance of internal controls to ensure the correct place-of-service coding for physician services. It also recommends expanding and strengthening efforts to identify physician services that are at a high risk for place-of-service miscoding.