Doctors are too often using the wrong codes to bill Medicare and Medicaid for their services, and that's costing the government billions of dollars.
The Centers for Medicare and Medicaid Services spent $6.7 billion in 2010 for evaluation and management services claims that were wrongly coded or lacked required documentation, according to the inspector general of the Department of Health and Human Services. CMS is part of HHS.
The codes determine how much the government reimburses providers for their services — which vary from an emergency room visit to an inpatient hospital stay — and are based on the complexity of the physician’s work.
Professional coders, hired for the IG investigation, reviewed 657 records to determine if the claims were justified. They found that more than half were improperly coded or documented.
In most cases, physicians used the higher-paying codes that worked in their favor. In one sample, 21 cases of basic outpatient visits were coded higher than they should have been, while only seven were coded at the appropriate level or lower than they should have been.
The overpayments took up nearly a quarter of the $32.3 billion CMS budget for evaluation and marketing.
Despite a recommendation by the inspector general, CMS decided to stop claims-case reviews because the task costs more than it has uncovered in overpayments, the report said.
Medicare’s manual says "physicians are responsible for ensuring that the claims they submit to Medicare accurately reflect the [evaluation and management] services provided and the billing levels corresponding to those services."
The report stressed educating physicians on appropriate coding practices and documentation.
In 2012, more than 1,800 doctors were discovered to be exclusively billing at the most expensive level, according to a report by ProPublica, a watchdog journalism nonprofit.
The full IG report can be read here.