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HHS-OIG: Medicare E&M costs increasing

September 12, 2012

Medicare Part B costs for evaluation and management (E&M) services are rising more rapidly than other Part B costs, according to a report issued last month by the U.S. Department of Health & Human Services’ Office of the Inspector General (HHS-OIG).

“Between 2001 and 2010, Medicare payments for Part B goods and services increased by 43 percent, from $77 billion to $110 billion. During this same time, Medicare payments for evaluation and management (E/M) services increased by 48 percent, from $22.7 billion to $33.5 billion,” the HHS Inspector General noted.

The report shows that use of higher-level E&M codes is increasing, compared with lower-level E&M codes.

“E&M services have been vulnerable to fraud and abuse,” the report added. A U.S. Centers for Medicare & Medicaid Services (CMS) study found that certain types of E/M services had the most improper payments of all Medicare Part B services.

However, the report does not establish that the increased use of higher level E&M codes is the result of improper claims, the AOA Advocacy Group noted.

Much of the increase in E&M code use over the past decade is attributable to care provided in hospitals or emergency rooms, according to the HHS Inspector General.

However, the report also finds physicians have increased their billing of higher-level E&M codes for all types of patient visits.

The report suggests optometrists use E&M codes less often than some other health care professionals.

Because E&M codes are used to report complete physician-patient encounters, which are relatively less expensive than individual procedures billed separately, and patient management can help avoid unnecessary procedures, particularly in facilities, proper use of E&M codes could actually help to slow overall cost increases in Medicare, the AOA Advocacy Group noted.

“As with all coding, it is critical that all physicians, including optometrists, continue to provide the care each patient needs, keep an excellent record of all that is done, and choose all codes based purely upon the content of the record and the CPT definitions for the services,” said Charles B. Brownlow, O.D., AOA coding consultant.

The HHS Inspector General has identified approximately 1,700 physicians who consistently billed higher-level E&M codes in 2010, according to the report.

The majority of physicians found to be billing with the highest-level E&M codes specialize in internal medicine, family practice, and emergency medicine, according to the HHS Inspector General.

Together, those professions represent more than 40 percent of the top E&M code billers, according to the report (see chart).

Ophthalmologists represent 3.2 percent of the practitioners who consistently use higher-level E&M codes to bill Medicare.

Optometrists account for only 2.2 percent of the practitioners who consistently use higher-level E&M codes, according to the HHS Inspector General.

Last month’s report is the first in a series of planned HHS Inspector General evaluations of E&M services.

Subsequent evaluations will determine the appropriateness of Medicare payments for E&M services and the extent of documentation vulnerabilities in E&M services.

The CMS has formally concurred with HHS-OIG recommendations, included in last month’s report, to continue physicians’ education on proper billing for E&M services and encourage Medicare payment contractors to review physicians’ billing for E&M services.

The CMS “partially concurred” with a third recommendation to review physicians who bill higher-level E&M codes for appropriate action, according to the report.

AOA members can review Medicare guidance on the use of E&M codes on the AOA’s Coding Today website (http://aoacodingtoday.com) and also access webinars and other materials related to accurate coding at www.aoa.org/archivedwebinars and www.aoa.org/coding.
The complete HHS Inspector General’s report, “Coding Trends of Medicare Evaluation and Management Services” (OEI-04-10-00180), can be accessed online at http://go.usa.gov/Vyt.

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