News: Medicare overpaid $22.5 million because of incorrect place-of-service codes, OIG finds
In 2019 and 2020, Medicare overpaid $22.5 million for physician services while beneficiaries were hospital inpatients or at skilled nursing facilities, an Officer of Inspector General (OIG) audit found. This was calculated by researchers who analyzed 2.1 million physician service claim lines at risk of overpayment because of non-compliance with the place-of-service policy, HealthLeaders reported.
The OIG stated that this can happen when practitioners don’t correctly report the place-of-service code on a claim line, which causes Medicare to pay more at higher non-facility rates rather than at lower facility rates while they were inpatients of such facilities.
“CMS has expressed reluctance to take enforcement action for these claim lines because neither statute nor CMS's regulation specifically addresses situations in which a SNF or hospital inpatient leaves to receive a physician service in a non-facility setting,” the report stated.
After summarizing their findings, the OIG recommended CMS do the following:
- Direct Medicare to recover the $22.5 million in overpayments
- Notify the practitioners so they can identify, report, and return overpayments within 60 days
- Establish and apply common work file edits to detect when practitioners incorrectly use the non-facility place-of-service code
- Take steps to revise its regulations to ensure that Medicare make appropriate payments for physician services
- Consider developing a mechanism for facilities to indicate when an inpatient leaves a facility and returns the same day
- Provide additional education to practitioners on properly using place-of-service codes
In the report, the OIG stated that CMS agreed with and will take action on four of the recommendations and will consider the findings for the rest before taking action.
Editor’s note: To read HealthLeaders’ coverage of this story, click here. To read the OIG audit, click here.