OIG J9 Audit Finds $1.7M in Overpayments
The Department of Health & Human Services (HHS) Office of Inspector General (OIG) recently completed an audit of claims filed in Medicare administrative contractor (MAC) Jurisdiction 9, which consists of Florida, Puerto Rico, and the U.S. Virgin Islands. The results of the audit found $1,691,958 in improper payments for just 253 line items.
Among the most prominent problem areas identified in the audit were:
- Providers reported incorrect units of service on 203 line items, resulting in overpayments totaling $1,411,370.
For example, one provider billed Medicare for incorrect service units on six line items. Rather than billing between 1 and 485 service units (the correct range for the HCPCS Level II codes associated with these line items), the provider billed between 250 and 4,850 service units. The units were overstated because the pharmacy’s drug conversion factor table was not current. As a result of these errors, the provider was paid $135,671 when he should have received $7,311.
- Providers used HCPCS Level II codes that did not reflect the procedures performed on 17 line items, resulting in overpayments totaling $101,310.
For instance, because of human error, a provider billed Medicare for nine line items of infusion therapy using incorrect HCPCS Level II codes, which resulted in a payment of $76,488. The correct payment should have been $830.
- Providers reported a combination of incorrect units of service claimed and incorrect HCPCS Level II codes on 22 line items, resulting in overpayments totaling $93,353.
In one case, a provider billed Medicare on two separate occasions for a procedure with 200 units of service; both the procedure billed and the units of service were incorrect. The provider should have billed using a different procedure code, with one unit of service. The resulting payment was over $27,000 greater than it should have been.
- Providers did not provide the supporting documentation for 11 line items, resulting in overpayments totaling $85,925.
Incorrect units of service, improper HCPCS Level II/CPT® coding, and lack of medical necessity (generally due to poor provider documentation) are common problems the OIG has identified for claims of all types, and these errors have been high priority for the OIG for many years.
The Jurisdiction 9 audit covered dates of service January 2006 through December 2007, which included approximately 91 million line items for outpatient services. From this pool, 368 line items had: (1) a Medicare line payment amount that exceeded the line billed charge amount by at least $1,000; and (2) three or more units of service. Of these, the OIG reviewed only 326 items because one provider associated with 42 line items was in bankruptcy. Of the 326 items reviewed, 67 were correct.
Since September 2008, First Coast Service Options, Inc., of Jacksonville, Fla., has held the MAC contract for Jurisdiction 9. The specific objective of the OIG audit was to determine whether certain Medicare payments in excess of charges that First Coast made to providers for outpatient services were correct. As a result of the audit, the OIG recommended that First Coast recover the $1,691,958 in identified overpayments, implement system edits that identify line item payments that exceed billed charges by a prescribed amount, and use the results of the audit in its provider education activities.
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