Medicare Compliance & Reimbursement

Medicare needs to better scrutinize dialysis and nonemergency transport claims.

The HHS Office of Inspector General has worried for years that the Medicare ambulance transport benefit is "highly vulnerable to abuse"--and a recent analysis of 720 claims has validated those worries.

One in four ambulance transport claims doesn't meet Medicare requirements, the OIG finds in a new report. Improper claims resulted in $402 million in unwarranted payments during the 2002 claim year, the OIG says. The report reviews both emergency and nonemergency ambulance transports, as well as transports to and from dialysis facilities.

The OIG blames the high improper payment rate on insufficient contractor safeguards, which it claims fail to identify and prevent improper payments for ambulance transports. Less than half of the contractors the OIG surveyed conducted post-payment reviews of ambulance claims, according to the report.

The OIG attributes more than half of the improper payments it identified to just 13 percent of the cases it analyzed--Medicare paid $220 million in improper claims for patients with conditions that didn't warrant ambulatory transport. Another 9 percent cost $31 million in improper payments by failing to meet level-of-service criteria. Plus, 5 percent of ambulance suppliers failed to respond to OIG requests for documentation, leaving a whopping $150 million in improper payments in their wake.

Dialysis and nonemergency transports have significantly higher error rates than emergency transports, the report indicates. Dialysis error rates peaked at 27 percent, and nonemergency error rates follow closely at 20 percent. Emergency error rates were 7 percent, the OIG reports.

To reduce improper payments, the OIG recommends that the Centers for Medicare & Medicaid Services implement prepayment edits that target dialysis and nonemergency transport claims, instruct contractors to obtain proper documentation during post-payment reviews, and direct contractors to educate third-party providers who initiate transports about proper use of the benefit. CMS agrees with the OIG's findings and is taking steps to implement its recommendations, the report indicates.

To view the full report, go to www.oig.hhs.gov/oei/reports/oei-05-02-00590.pdf.