Incorrect place-of-service codes resulted in Medicare overpayments totaling in the millions
Coding errors caused Medicare to overpay claims by millions of dollars in 2019 and 2020, according to the results of a recent Office of Inspector General (OIG) audit.
The investigation revealed that Medicare overpaid by approximately $22.5 million due to incorrect place-of-service coding completed by practitioners.
When providing services to Medicare beneficiaries, practitioners are required to report a two-digit place-of-service code that designates where their services took place (hospital, clinic, skilled nursing facility, etc.). These codes determine reimbursements to providers and, if done incorrectly, can result in overpayment for services, depending on where they actually took place.
OIG conducted the audit because its analysis of Medicare claims gave reason to believe that providers might not be adhering to the Centers for Medicare & Medicaid (CMS) regulations related to place-of-service billing.
OIG noted that such actions would increase “the risk of Medicare making an overpayment for physician services furnished to inpatients of a SNF or hospital.”
For the years of 2019 and 2020, OIG identified a total of 2.1 million physician service claims at risk of incorrect payments due to being out of line with CMS policies. This revealed that Medicare overpaid by $22,463,193 for 1,130,182 claim lines by paying the nonfacility rate for services coded as provided in a nursing facility or skilled nursing facility (SNF) setting without Part A coverage while Part A enrollees were inpatients at SNFs.
Following the audit, OIG recommended that CMS:
Direct its Medicare contractors to recover the overpayments.
Notify practitioners found to be incorrectly coding services to educate them on proper policy and have them report and return overpayments received.
Establish procedures that can detect future place-of-service coding errors related to SNFs.
Revise regulations to ensure that Medicare appropriately pays for physician services at SNFs.
Consider developing a system that would alert facilities when an inpatient leaves a facility and returns the same day.
Provide additional educational material pertaining to appropriate place-of-service coding.
CMS agreed to comply with recommendations one, two, three and six, and said that the additional recommendations would be considered “along with other available information” to determine whether further action is needed.
The full OIG report can be viewed here.
In addition to her background in journalism, Hannah also has patient-facing experience in clinical settings, having spent more than 12 years working as a registered rad tech. She began covering the medical imaging industry for Innovate Healthcare in 2021.