Medicare Audits Reveal Areas of Under- and Overpayment

Medicare RAC auditors have identified an area where physicians tend to be underpaid: multiple surgeries.

This is one of the frequent errors highlighted in Medicare's 2014 first-quarter guidance for avoiding billing errors (PDF), based on findings from Recovery Audit contractors (RACs) andComprehensive Error Rate Testing (CERT) review contractors, and other Medicare audits. Do any of these apply to your practice?

Multiple surgery reduction errors: single line modifier 51 underpayments (RAC audit)  Multiple surgeries are separate procedures performed on the same patient at the same operative session or on the same day for which separate payment may be allowed. Using modifier 51 on claims identifies such services. Medicare pays the procedure with the highest physician fee schedule (PFS) amount at 100 percent and pays the second through fifth procedures at 50 percent of the PFS. (If a sixth procedure is billed, it is suspended for manual review). When billing Medicare for multiple surgeries, you would report two or more stand-alone surgical procedure codes, appending modifier 51 to the code(s) with the lower physician fee schedule amount.

The error: If you perform or report one surgical procedure and append modifier 51, your payment will be reduced by 50 percent.

For more information about Medicare billing and payment for surgeries, see:

Office visits billed for hospital inpatients (RAC audit)  Billing Medicare for an evaluation and management (E&M) service using an office code when your patient is admitted to the hospital will result in an overpayment to you. When billing for E&M services rendered to patients admitted to an inpatient hospital setting, use CPT codes 99221-99223, 99231-99233, and 99238-99239. For E&M services provided in the physician's office, or in an outpatient or other ambulatory facility, use CPT codes 99201-99215.

Psychiatry and psychotherapy services (CERT review)  The main error CERT has identified with the revised psychiatry and psychotherapy codes is not clearly documenting the amount of time spent only on psychotherapy services. When billing Medicare, select the correct E&M code based on elements of the history and exam and medical decisionmaking required by the complexity/intensity of the patient's condition. Choose the psychotherapy code on the basis of the time spent providing psychotherapy.

Improper payments for preventive services (CERT review) — The CERT review contractor studied claims for the following four preventive services submitted for payment from July 2012 through September 2012.

  • Screening and behavioral counseling interventions in primary care to reduce alcohol misuse;
  • Annual alcohol misuse screening, 15 minutes (G0442);
  • Brief face-to-face behavioral counseling for alcohol misuse, 15 minutes (G0443);
  • Annual depression screening, 15 minutes (G0444); and
  • Annual, face-to-face intensive behavioral therapy for cardiovascular disease, individual, 15 minutes (G0446).

The improper payment rates for these four preventive services ranged from 22 percent to 46 percent, mostly due to insufficient documentation. For example:

  • No record of the amount of time spent providing a timed service,
  • No record of the billed service, or
  • No physician's signature on the medical record.

The CMS MLN Catalog (PDF) contains downloadable coverage guides for various types of preventive services.

For details and examples (PDF) for each of the above topics, see the Medicare Quarterly Provider Compliance Newsletter, April 2014. See TMA's online Medicare Resource Center for information about Medicare coding, enrollment, audits, and more.

Published June 24, 2014

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Last Updated On

May 13, 2016

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Audits | Coding | Medicare | RAC