Medicare Made $6.7 Billion Wrong Payments In 2010 On Office Visits Alone

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Medicare paid $6.7 billion wrong payments in 2010 for office visits and patient evaluations alone, according to an inspector general report released Thursday.

The improper payments make up 21 percent of all such Medicare spending on evaluation and management services, which totaled $32.3 billion that year. Just doctor office visits, emergency room assessments and inpatient hospital evaluations make up the evaluation and management services category — which consumed nearly 30 percent of all Medicare Part B payments in 2010.

The Health and Human Services inspector general report recommended that the Medicare administrator take several steps to prevent improper payments in the future, but the agency, the Centers for Medicare and Medicaid Services (CMS) does not plan to take the report’s advice and actually review the $6.7 billion in incorrect payments, arguing it’s not cost-effective.

CMS did agree to educate physicians on how to code Medicare claims for the evaluation and management services category in the future, but also declined to encourage contractors to review the Medicare claims by physicians most likely to commit the errors.

The report examined a sample of claims from Medicare providers to determine whether claimed payment rates were justified. In the end, over half of all claims in the office visit category alone were billed incorrectly — whether providers charged the wrong rate or lacked the documentation to back up the claim. Forty-two percent of claims charged the federal government the wrong rate and 19 percent did not include the proper paperwork.

The report notes that at least some of the mistakes were claims that turned out to be less expensive than justified, but physicians are not as likely to underbill as they are to request higher Medicare payments.

Physicians have significantly increased billing Medicare at higher reimbursement rates for office visits and assessments since 2001, according to a previous inspector general report, forewarning the vast number of improper payments.

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