This morning it was reported that the Inspector General of the Department of Health and Human Services issued a report that roughly 20% of all Medicare payments for evaluation and management claims in the United States are overpayments to physicians, based on a study of cases from the calendar year 2010. This amounts to $6.7 billion out of a total expenditure of $32 billion.
Similar method used in Texas
This is important to Medicaid providers in Texas because the conclusion reached by the federal agency is based on the same kind of statistical approximation that is used by Texas HHSC-OIG to determine how much a Medicaid provider in Texas has overbilled, etc. We have seen for a provider a sample of around 60 cases used to represent thousands of cases and millions of dollars in Medicaid payments.
In fact, the federal example is even worse. The agency based their conclusions on a review of only 657 cases. This is only 10 times as many cases as used for a single provider in Texas. Yet this small number was used to determine overpayments for the entire nation.
Not reviewed by doctors but “professional coders”
Worse yet, it wasn’t physicians that reviewed the cases for correctness in Medicare billing relating to the health condition of the case. It was done by “professional coders.”
Here is an excerpt from the Texas Public Radio story about the report:
For this review, the inspector general gathered the medical records associated with 657 Medicare claims and asked professional coders to see whether the records justified the rates charged.
Overall, more than half of the claims were billed at the wrong rate or lacked documentation to justify the service. Sometimes physicians billed for a lower-cost service than the one they delivered, but more often they billed for a more expensive one. The inspector general extrapolated from its sample to estimate the amount Medicare overpaid on all 2010 evaluation and management claims.
“We have to do a better job of curbing improper payments and protecting taxpayer dollars,” Sen. Bill Nelson, D-Fla., chairman of the U.S. Senate Special Committee on Aging, said in a statement.
CMS prefers to work on provider education
The Centers for Medicaid and Medicare Services commenting on the report said it was administratively too costly to go after high billers and they would prefer to work on provider education rather than enforcement.
Probable 20% expectation of overpayments in audits
What this means is that if you have a successful or large practice you are more likely to be scrutinized by state and federal agencies and it will be expected that about 20% of your billings are overpayments.
It, therefore, behooves providers to be very careful and ensure each case is well documented.