OIG Report Identifies Dialysis Facility Billing Mistakes

The Office of Inspector General (OIG) estimates that National Government Services, Inc. (NGS) overpaid dialysis facilities $3.9 million for laboratory tests provided to end-stage renal disease (ESRD) beneficiaries during 2004-2006. The overpayments, according to the April 27 report, were due to insufficient controls to ensure compliance on the part of dialysis facilities and NGS’s limited ability to detect billing errors and lack of post-payment medical record reviews for claims submitted by dialysis facilities that separately billed ESRD-related laboratory tests.

The OIG reviewed 339,342 claims totaling $7,381,070 paid by NGS for tests provided by 326 dialysis facilities in 2004-2006 and found that dialysis facilities incorrectly billed and were reimbursed $11,325 for ESRD-related laboratory tests in 270 of the 360 beneficiary quarters sampled.
The Centers for Medicare & Medicaid Services (CMS) specifies the laboratory tests that are included in the composite rate and the frequencies at which the tests are reimbursable as part of that rate. When tests are performed at the specified frequencies, they must not be billed separately. When tests are performed at a frequency greater than specified, additional tests are separately billable and payable if they are medically justified by accompanying documentation. Certain routine tests that are not included as part of the composite rate may be billed separately, but payment for more than one of these tests performed in a three-month period requires medical documentation.
A diagnosis of ESRD alone is not sufficient medical evidence to warrant coverage of additional tests. The nature of the illness or injury (diagnosis, complaint, or symptom) requiring the performance of the test(s) must be present on the claim.
Special rules apply when specimen collection services are furnished to dialysis patients. The specimen collection fee is not separately payable for patients dialyzed in the facility or at home. Payment for specimen collection services is included under the ESRD composite rate, regardless of whether the laboratory test itself is included in the composite rate or is separately billable.
In other words, dialysis facilities should not separately bill for both the specimen collection services and the test each time the test was performed.
When ordering an automated multichannel chemistry (AMCC) profile test, dialysis facilities must specify whether the test is:

• Part of the composite rate and not separately payable;
• A composite rate test but is, on the date of the order, beyond the frequency covered under the composite rate and separately payable; or
• Not part of the ESRD composite rate and separately payable.

For example, a patient has a potassium test four times in a single month in conjunction with his dialysis treatments. One potassium test is included in the composite rate each month. In order for the dialysis facility to separately bill for three potassium tests performed in that month after the first test, its records must contain accompanying documentation that medically justifies the three additional tests.
Apply the following rules to AMCC tests for ESRD beneficiaries:

• If 50 percent or more of the covered tests on a given date of service are included in the composite rate payment, then all submitted tests for that date are included in the composite rate payment. In this case, no separate payment in addition to the composite rate payment is made for any of the separately billable tests.
• If less than 50 percent of the covered tests on a given date of service are composite rate tests, all AMCC tests submitted for that date of service for that beneficiary are separately payable.

An example of incorrect coding: A patient has a calcium test and phosphorus test (both AMCC composite rate tests) on a single date of service. According to the dialysis facility’s records, the date of service was the only time during the month that these two test were performed. The tests were composite rate tests with the specified frequency. However, the dialysis facility incorrectly codes the claim to indicate that the tests were composite rate tests beyond the specified frequency. The contractor applies the 50 percent rule to this information (0 divided by 2) and separately pays for both tests. Because 100 percent of the tests actually performed were composite rate tests (2 divided by 2), these two tests were not separately payable.
In the report, the OIG recommends NGS coordinate with CMS and other involved Medicare Administrative Contractors (MAC) to identify and recover overpayments and educate dialysis facilities about Medicare ESRD billing requirements.

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