Fraud police announce targets for next year

ABNs, E/M, procedure codes in for close scrutiny

One of the best indicators of where federal fraud cops are focusing is the Office of the Inspector General’s (OIG) so-called work plan, which outlines its investigative and regulatory priorities for the coming year.

Items high on the OIG’s recently released 2002 work plan include:

Use of advance beneficiary notices (ABNs) and their financial impact on beneficiaries and physicians. Physicians must provide advance notices before they provide services that they know or believe Medicare does not consider medically necessary or that Medicare will not reimburse. Beneficiaries who are not notified before they receive such services are not responsible for payment. "Indications are that practices vary widely regarding when advance beneficiary notices are provided, especially with respect to noncovered laboratory services," notes the OIG.

Reacting to physician frustration with the language and administrative burden presented by the ABN form, the Centers for Medicare and Medicaid Services (CMS) has proposed a revised one-page ABN that would eliminate the term "not medically necessary," which has caused consternation among physicians and confused beneficiaries. (See "Beneficiary notices get closer attention from feds," in this issue.)

Consultations. Last year, Medicare paid some $2 billion for physician consultation services. Regulators want to know if these consultations are being properly billed. (See related story, Physician’s Payment Update, October 2001, p. 154.)

Coding of evaluation and management (E/M) services provided in physician offices and use of documentation guidelines. OIG will work with Medicare carriers to identify potential patterns of incorrect E/M coding and corrective actions taken.

This seems to be the next step in the long-running saga over how best to revise the E/M coding system. Separate sets of 1995 and 1997 guidelines — which CMS admits are cumbersome for physicians to use — already exist. Meanwhile, Medicare has halted work on its latest attempt to create a consensus set of E/M codes and is rethinking its strategy.

Review of the procedure codes billed by both a hospital and physician for the same outpatient service. Preliminary studies by the OIG have found that nearly 25% of outpatient claims billed by hospitals and the corresponding physician procedure code don’t match.

Services and supplies "incident to" physicians’ services. OIG investigators are turning up the heat again on "incident to" billing, this time looking at when physicians bill incident-to services and supplies. Physicians may bill for the services provided by allied health professionals, such as nurses, technicians, and therapists, as incident to their professional services. Incident-to services, which are paid at 100% of the Medicare physician fee schedule, must be provided by an employee of the physician and under the physician’s direct supervision.

Medical necessity of durable medical equipment. The OIG wants to study the appropriateness of Medicare payments for certain items of durable medical equipment, including wheelchairs, support surfaces, and therapeutic footwear. The OIG is especially interested in whether the suppliers’ documentation supports the claim, whether the item was medically necessary, and whether the beneficiary actually received the item.

Laboratory services. Whether laboratories conduct tests and bill Medicare within the scope of their certifications under the Clinical Laboratory Improvement Amendments (CLIA) of 1988 will be a focus of the OIG next year. Laboratories with certifications of waiver or physician-performed microscopy procedures may perform only a limited menu of test procedures. Moderate- and high-complexity laboratories are also restricted to testing within certain preapproved specialty groups and must meet CLIA standards.

Bone density screening. As the number of claims for bone density screening increases, there are questions about the appropriateness and quality of some services, which the OIG plans to investigate.

Medicare billings for cholesterol testing. The OIG wants to know if cholesterol tests billed to Medicare are medically necessary and accurately coded, especially relating to the frequency of testing and the medical necessity of lipid panels.

While total cholesterol testing can be used to monitor many patients, Medicare claims reflect a preponderance of claims for lipid panels, which include HDL cholesterol and triglycerides also. Systems capable of doing all three tests plus glucose are advertised on the Internet as CLIA-waived.

Clinical laboratory proficiency testing. The agency will also look at the policies and procedures used for proficiency testing under CLIA and examine the quality of the testing results. CLIA requires all moderate- and high-complexity laboratories to enroll with an approved proficiency testing agency for certain tests. These agencies are responsible for grading the accuracy of a laboratory’s results. Repeated failures can cause the laboratory to lose approval to perform those and similar tests.

End-stage renal disease. Questions have been raised about Medicare payments for a wide range of services for end stage renal disease beneficiaries, along with medical necessity and accuracy of related coding.

Physicians at teaching hospitals. A long-time favorite topic of the OIG, this effort will include verification of compliance with Medicare rules governing payment for physician services provided in the teaching hospital setting and will seek to ensure that claims accurately reflect the level of service provided to patients.

Billing for residents’ services. The OIG wants to find out if hospitals have been improperly using residents’ physician identification numbers to bill Medicare. Medicare regulations allow residents, who are licensed physicians, to be issued physician identification numbers for purposes of billing Medicare for their services. Residents can bill Medicare only when they are "moonlighting," which is defined as providing medical treatment, other than in their field of study, in an outpatient clinic or an emergency room.

Inpatient dialysis services. This review will determine whether Medicare payments for inpatient dialysis services met the billing requirements of Medicare Part B. The Medicare Carrier Manual requires that the physician be physically present with the patient at some time during the dialysis and that the medical records document this in order for the physician to be paid on the basis of dialysis procedure codes. If the physician visits the dialysis inpatient on a dialysis day, but not during the dialysis treatment, physician services are billable under the appropriate hospital visit codes. Fee schedule amounts for inpatient dialysis codes are higher than those for hospital visit codes.

Medicare payments for EPOGEN. There is concern that Medicare is overpaying claims submitted by dialysis facilities for the drug EPOGEN.

Medicare coverage of prescription drugs. The OIG will examine whether prescription drugs paid for by Medicare met coverage requirements and determine the extent to which drug coverage decisions varied among Medicare carriers. Medicare does not pay for over-the-counter drugs or most outpatient prescription drugs. However, under specific circumstances, Medicare Part B covers drugs used with durable medical equipment or infusion devices. Medicare also covers certain drugs used in association with organ transplantation, dialysis, chemotherapy, and pain management for cancer treatment.

Additionally, the program covers certain vaccines, such as those for influenza and hepatitis B.

Drug prices paid by Medicare vs. other sources. A study will compare Medicare reimbursement for prescription drugs with costs incurred by the Department of Veterans Affairs, the physician/supplier community, and Medicaid. Previous OIG reports showed that Medicare reimbursed for prescription drugs at significantly higher levels than did these other sources.