Article
OIG Review of Medicare Payments Exceeding Charges By $500 to $1,000 for Outpatient Services Processed by Highmark Medicare Services in Jurisdiction 12 for the Period January 1, 2006, Through June 30, 2009 (There has been another OIG study with payments exceeding LINE ITEM charges by $1,000. It also had very large error rates and over payments - http://oig.hhs.gov/oas/reports/region4/41006120.pdf )
Highmark Medicare Services is the Part B Medicare Administrative Contractor for Pennsylvania, Delaware, Maryland, New Jersey, and the District of Columbia Metropolitan Area. For Part B services, A/B MAC Jurisdiction 12 includes the Counties of Arlington and Fairfax in Virginia and the City of Alexandria in Virginia. Services for the remainder of the state of Virginia will be covered under A/B MAC Jurisdiction 11.
The OIG audit found that 418 of the 739 selected line items for which Highmark Medicare Services (Highmark) made Medicare payments to providers for outpatient services for the period January 1, 2006, through June 30, 2009, were incorrect. This is a 57% error rate and the OIG identified overpayments totaling approximately $532,000 this is an average of $1,273 per record with error and $720 per record for the sample. Some of the changes were under payments but I doubt that many were underpayments because of the size of the overpayment per record.
The following is a link to the OIG Report:
http://oig.hhs.gov/oas/reports/region3/31100004.pdf
My observations:
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Over billed units totaled $435,099 or 82% of the $532,000 in total identified over billing. There were 343 line items in error for an average error of $1,269 per line item in over billing.
The following is a partial break down:
- Fifty providers billed Medicare on 285 line items with incorrect units involving 42 different drugs, biologicals,6 and blood products. Rather than billing between 1 and 350 service units, providers billed between 3 and 10,000 service units. These errors occurred because of human error or because the provider’s chargemaster7was incorrect. As a result of these errors, Highmark paid the 50 providers a total of $475,556 when it should have paid $112,763, an overpayment of $362,793 or 76%.
- Twelve providers billed Medicare for 23 line items with an incorrect number of surgical procedures performed. Rather than billing for the number of surgical procedures performed, providers either billed the wrong number of procedures or billed for the units of time (e.g., minutes, quarter hours, and hours) spent in the surgical suite. For each of the 23 cases, the provider performed from 1 to 9 surgical procedures but billed for between 3 and 30 services. As a result of these errors, Highmark paid the provider a total of $77,594 when it should have paid $37,049 an overpayment of $40,545 or 52%.
Also the total sample of 739 line items represented provider payments of $1,232,239. The over payments identified $532,000 represent a 43% over payment for the selected records.
Any MAC without edits/audits based on this issue will initiate them ASAP. I am also sure the RACs will start to use the criteria in their record selection if they are not already. The bottom line is even if you are not in the Highmark MAC Part B area you likely will feel the impact of this study.
When hospitals audit outpatient claims I suggest using the study criteria from both OIG reports as the selection criteria (line items with payment of $500 more than charges) as part of the sample to determine your exposure. Then initiate corrective education along with policy/procedure and charge master corrections.
The following is from the OIG report:
SUMMARY OF FINDINGS
Of the 739 selected line items for which Highmark made Medicare payments to providers for outpatient services during our audit period, 280 were correct. Providers refunded overpayments on 41 line items totaling $31,179 prior to our fieldwork. The remaining 418 line items were incorrect and included overpayments totaling $531,797 that the providers had not refunded by the beginning of our audit.
Of the 418 incorrect line items:
• Providers reported incorrect units of service on 343 line items, resulting in overpayments totaling $435,099.
• Providers did not provide supporting documentation for 26 line items, resulting in overpayments totaling $31,005.
• Providers billed for unallowable services on nine line items, resulting in overpayments totaling $19,257.
• Providers billed separately for services on 18 line items for which payment was packaged in the payment for the primary service, resulting in overpayments totaling $18,722.
• Providers reported a combination of incorrect units of service and incorrect HCPCS codes on nine line items, resulting in overpayments totaling $11,600.
• Providers used incorrect HCPCS codes on 11 line items, resulting in overpayments totaling $10,766.
• One provider billed for the unlabeled use of a drug/biological on one line item, resulting in an overpayment totaling $3,657.
• Highmark incorrectly calculated the payment for one line item that resulted in an overpayment of $1,691.
The providers attributed the incorrect payments to clerical errors or to billing systems that could not prevent or detect the incorrect billing of units of service and other types of billing errors. Highmark made these incorrect payments because neither the Fiscal Intermediary Standard System nor the CWF had sufficient edits in place during our audit period to prevent or detect the overpayments.
RECOMMENDATIONS
We recommend that Highmark:
• recover the $531,797 in identified overpayments.
• implement system edits that identify line item payments that exceed billed charges by a prescribed amount, and
• use the results of this audit in its provider education activities.