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Tuesday, August 25, 2015

Wrestling with the ACA's 60-day rule for overpayments

The Affordable Care Act (ACA) requires physicians to report and return Medicare and Medicaid overpayments within 60 days of when the overpayment is “identified.” An improperly retained overpayment becomes an “obligation” under the False Claims Act (FCA), possibly resulting in fines of up to $11,000 per claim and treble damages. Unfortunately, the ACA does not define “identified.”

The Centers for Medicare & Medicaid Services (CMS) attempted to define the term by issuing a proposed rule in February 2012. However, CMS announced this past February that it would delay finalizing the rule for at least a year because of the complexity of the issue and the volume of comments it had received, much of them opposed to CMS’s proposed definition.

On Aug. 3, the U.S. District Court for the Southern District of New York weighed in on the matter. Its decision in U.S. ex rel. Kane v. Continuum Health Partners, Inc. et al. is the first to interpret the ACA’s 60-day rule. In its decision, the court concluded that awareness that overpayments likely existed triggered the 60-day clock. This means that a 60-day time frame begins when a physician has established the mere possibility of overpayments.

Thankfully, the court also concluded that its ruling should not be read to create FCA liability in the case of a physician who is diligently working to investigate a potential overpayment and has not returned the overpayment within 60 days, as long as the physician can establish that he or she did not intend to withhold repayment once he or she established the amount to be repaid. The court stated that “it is only when an obligation is knowingly concealed or knowingly and improperly avoided or decreased that a provider has violated the FCA. Therefore, prosecutorial discretion would counsel against the institution of enforcement actions aimed at well-intentioned healthcare providers working with reasonable haste to address erroneous overpayments.”

Consequently, if you discover the possibility that an overpayment exists, you should work diligently to uncover the scope of the problem and make the necessary repayments without unnecessary delay, preferably within 60 days of when you are aware of the possibility of an overpayment. Likewise, you should promptly investigate reports of potential overpayments and ensure the investigation is well-documented.

More information on the court’s decision and its implications for physicians is available online.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Tuesday, August 18, 2015

Avoid errors when coding pulmonary diagnostic procedures

The latest issue of the Medicare Quarterly Provider Compliance Newsletter includes a useful reminder that billing for evaluation and management (E/M) services and pulmonary diagnostic procedures provided to the same patient on the same date often requires the use of a modifier. Failure to use the appropriate modifier may result in getting paid only for the procedure and not the E/M service. Alternatively, it may result in Medicare identifying it as an overpayment and requesting repayment.

The newsletter notes that at least one Medicare recovery auditor conducted an automated review and identified overpayments associated with limited E/M services (identified by Current Procedural Terminology (CPT) codes 99211-99212) billed without modifier 25 on the same date of service as a pulmonary diagnostic procedure (CPT code range 94010-94799). According to the National Correct Coding Initiative Policy Manual for Medicare Services (especially Chapter 11, Section J.2), when a physician performs a pulmonary function study and obtains a limited history and exam, separately coding for an E/M service is inappropriate. However, if the physician performs a significant, separately identifiable E/M service unrelated to the technical performance of the pulmonary function test, the physician may report an E/M service with modifier 25 appended to the E/M code. (You can find the National Correct Coding Initiative Policy Manual in the “Downloads” section of the National Correct Coding Initiative Edits web page.)

As a reminder, you use modifier 25 to indicate that on the day you performed a procedure or service identified by a CPT code, the patient’s condition required a significant, separately identifiable E/M service above and beyond the procedure that you performed. You must document the separate E/M service consistent with CPT E/M services guidelines. Note that the E/M service may be prompted by the symptom or condition for which you provided the procedure and/or other service. As such, you do not need different diagnoses for reporting the E/M services on the same date.

Pulmonary diagnostic procedures, such as spirometry, are commonly done in family medicine in conjunction with another E/M service. When this happens, first ensure that your documentation of the E/M service supports that it can stand alone from the pulmonary function procedure (i.e., the E/M service was above and beyond the limited history and exam typically associated with the procedure). Then, append modifier 25 to the E/M service on your claim. Doing so will go a long way toward ensuring that you are appropriately paid for both services and that Medicare will not demand an overpayment from you somewhere down the road.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Friday, August 14, 2015

The whys and hows of ICD-10 testing now

As I write this, the ICD-10 implementation date is just 47 days away. Hopefully you have tested your systems and processes by now. But if you have not, we’ll discuss how to get started.

It's important to start ICD-10 testing as soon as possible. First, testing is vital to ensure you can actually create and submit claims using ICD-10 come Oct. 1. Second, the earlier you test, the more time you have to resolve any issues you encounter. Finally, testing is one of the best ways to make sure you avoid cash flow issues after the compliance date.

To get started, map out your workflows and identify where you use ICD-10 codes. This includes any system that stores, processes, sends, receives, or reports diagnosis code information. Examples include:

•    Generating a claim
•    Performing eligibility and benefits verification
•    Preparing to submit quality data
•    Updating a patient’s history and problems
•    Coding a patient encounter

Then prioritize your testing by focusing first on the most important workflows using the diagnoses you see most often. Doing so will likely lead you to focus on your highest-risk scenarios (e.g., claims processing).

Testing is not limited to inside your practice. You also need to test with trading partners, such as vendors, clearinghouses, billing services, and health plans. Test with trading partners to:

•    Verify that you can submit, receive, and process data with ICD-10 codes
•    Understand how ICD-10 updates affect the transactions you submit
•    Identify and address specific issues before Oct. 1

Because time is short, test inside your practice and with partners at the same time if you are just getting started. You can check for testing opportunities at the website of the Cooperative Exchange, an association of clearinghouses.

When testing claims processing with trading partners, be aware that there are two types of testing. In acknowledgement testing, you submit claims with ICD-10 codes. While claims are not adjudicated, you receive an acknowledgement that your claim was accepted or rejected. During end-to-end testing, you submit claims containing valid ICD-10 codes and health plans process the claims through system edits to return an electronic remittance advice.

To get the most out of testing for your practice, you should:
•    Review testing requirements to understand the scope and format of the testing available
•    Focus on your highest-risk scenarios, such as claims processing and the diagnoses you see most often
•    Prioritize testing with health plans, concentrating on those that account for the majority of your claims
•    Test as often as you can

Also, remember that you can test even if you have not yet installed an ICD-10-ready system. One good way to start is to look at the ICD-10 codes for the top 10 conditions you see. Consider volume of conditions and those that account for most of your revenue. Look at recent medical records for patients with these conditions, and try coding them in ICD-10 for practice. Do the records include the documentation needed to select the correct ICD-10 code? You can use any cases of insufficient documentation to create a checklist for physicians and other health care professionals in the practice to consult.

To learn more about getting ready, visit the Centers for Medicare & Medicaid Services website for free resources including the Road to 10 tool designed especially for small and rural practices, but useful for all health care professionals. You can also check out the AAFP ICD-10 resources online.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Friday, August 7, 2015

Studies show differing opinions on enforcing patient care quality

A pair of recent studies demonstrate that the medical community is far from unified on the subject of rewarding or penalizing physicians based on the quality of patient care.

The American Association of Physician Leadership and the Navigant Center for Healthcare Research and Policy Analysis jointly polled almost 2,400 physician leaders and medical executives and reported that 69 percent of them agreed or strongly agreed that physicians should be held accountable for both the cost and quality of care they provide to patients.

Sixty-three percent of those surveyed disagreed or strongly disagreed that the ongoing shift from fee-for-service reimbursement to payments based on value will hurt the quality of patient care.

In a released statement, Paul Keckley, Navigant’s managing director, said the leaders' support for greater accountability would likely cause “tension at home,” given that many physicians object to being held accountable when they have little or no control over the costs of tests, procedures, and medical devices.

“If leaders think their rank-and-file members need to be held accountable for costs,” Keckley said, “we had better quickly come to some consistent methodology for determining how a clinician is to know what costs are, and then a methodology for incenting them for lower cost and protecting them from frivolous lawsuits (if they deny care to control costs).”

Partially echoing Keckley’s comments, a new study by The Commonwealth Fund and the Kaiser Family Foundation found that half of the 1,624 primary care physicians who participated said the increased use of quality measures to evaluate provider performance was hurting the quality of care. Interestingly, that percentage was the same whether the physician was currently receiving quality-based incentive payments or not.

Only 22 percent of physicians said they felt the use of quality performance measures was improving care (the number was slightly higher, 28 percent, among physicians currently paid based on quality).

In total, 55 percent of the physicians reported receiving some sort of financial incentive based on quality or efficiency.

Fifty-two percent of physicians also said financial penalties for unnecessary hospital admission or readmissions were hurting care quality. Only one in six said programs with those types of penalties were helping.

Tuesday, August 4, 2015

PQRS interim claims feedback for 2015 now available

Physicians who have used claims-based reporting to file at least one quality measure this year under the Physician Quality Reporting System (PQRS) can now view their quarterly data with the 2015 PQRS Interim Feedback Dashboard. The dashboard allows participants to monitor, on a quarterly basis, the status of their claims-based measures to see if they are meeting PQRS reporting requirements. Authorized users view the dashboard by accessing the Enterprise Identity Management System. For assistance, refer to the Centers for Medicare & Medicaid Services (CMS) 2015 Interim Feedback Dashboard User Guide.

As a reminder, failure to satisfactorily report under PQRS in 2015 will result in a 2 percent Medicare pay cut in 2017. Given that Medicare’s value-based payment modifier (VBPM) is tied to PQRS, failure to satisfactorily report under PQRS in 2015 will also result in an automatic payment decrease under VBPM in 2017. On the other hand meeting the PQRS reporting requirements this year can help avoid both penalties and potentially contribute to a payment incentive under VBPM in 2017.

Note, if you or your group is reporting 2015 PQRS data through a mechanism other than claims, such as an electronic health record or a registry like the PQRS Wizard, you will not be able to view your interim feedback reports through the dashboard. CMS has indicated that data submitted with alternative 2015 reporting methods will be available for review in the fall of 2016 through final PQRS feedback reports.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Friday, July 31, 2015

CMS, AMA offer additional guidance on ICD-10 coding flexibility

As you may have heard, earlier this month the Centers for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA) announced a series of changes aimed at easing physicians’ transition this fall from ICD-9 to ICD-10 coding.

In particular, the changes provided flexibility for practices still grappling with the large number of new diagnosis codes and the increased level of specificity required. CMS said that for the first year ICD-10 is implemented, physician claims will not be denied solely because the diagnosis code is not specific enough as long as it is from the appropriate “family” of ICD-10 codes.

Like everything else attached to the Oct. 1 switch to ICD-10, this announcement generated its own share of confusion. To help clarify the situation, CMS this week released a series of frequently asked questions and answers about the changes.

Some of the more important points:

• This is not a delay in the implementation of ICD-10. Medicare claims with a date of service on or after Oct. 1 will be rejected if they do not include a valid ICD-10 code. “Valid” is defined as having the full number of characters required for that code to be billed, which could require up to seven characters.

• CMS has defined “family of codes” as the ICD-10 three-character category, such as H25 (age-related cataract). Most categories include additional characters that provide additional information, such as the type of condition and what part of the body is affected (for example, H25.22 for age-related cataract, morgagnian type, left eye). Physicians still must provide a "valid" code, which means they will likely have to report more than just the initial three category characters.

• CMS noted that claims may still be denied for being insufficiently specific because automated claims processing edits that are tied to Local Coverage Determinations or National Coverage Determinations are not changing based on the new guidance. Also, Medicare fee-for-service prior authorization requests and prepayment reviews will still require ICD-10 codes with the correct level of specificity.

• The loosening of the specificity requirement does not extend to Medicaid claims, only to those billed under the Medicare fee-for-service Part B physician fee schedule. It also doesn’t extend to private payers unless those payers determine to offer similar flexibility.

Wednesday, July 29, 2015

Does physician compensation differ in an accountable care organization?

A new study published in the Annals of Family Medicine suggests that family physicians in accountable care organizations (ACOs) may not be paid that much differently than their counterparts in non-ACO practices. The study also raises questions about the ability of ACOs to affect cost and quality if physician payment incentives are not aligned with those of the ACO.

The study in question used data from a national survey of physician practices to compare primary care physicians’ compensation among three types of practices:

•    practices not participating in a Medicare ACO and with no substantial risk for primary care costs
•    practices not participating in an ACO but with substantial risk for primary care costs
•    practices participating in an ACO regardless of their risk for primary care costs.

Researchers measured physicians’ compensation based on salary, productivity, clinical quality or patient experience, and other factors. They then used regression models to estimate physician compensation as a function of ACO participation and risk for primary care costs while controlling for other practice characteristics. Among the findings:

•    Physicians in ACOs and non-ACO practices with no substantial risk for costs were compensated similarly; on average, they received nearly one-half of their compensation from salary, slightly less from productivity, and about 5 percent from quality and other factors.

•    Physicians not in ACOs but with substantial risk for primary care costs received two-thirds of their compensation from salary, nearly one-third from productivity, and slightly more than 1 percent from quality and other factors.

•    Participation in ACOs was associated with significantly higher physician compensation for quality; however, ACO participation was not significantly associated with compensation from salary, whereas financial risk was associated with much greater compensation from salary.

The authors concluded that although practices in ACOs provide higher compensation for quality, compared with practices at large, they provide a similar mix of compensation based on productivity and salary. The authors also concluded that incentives for ACOs may not be strong enough to encourage practices to change physician compensation policies for better patient experience, improved population health, and lower per capita costs.

As the study authors themselves ask, if physicians in ACOs and physicians outside ACOs are paid similarly, will they practice differently? The corollary question would seem to be, if they don’t, will ACOs still be able to deliver the lower cost and better quality that they otherwise promise? Only time and additional research will likely tell.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Tuesday, July 28, 2015

Primary care pay rises faster than that of specialists

Compensation for primary care physicians outpaced that of specialists last year, although the median for primary care physicians remains far less.

The Medical Group Management Association (MGMA) released its annual Provider Compensation and Production Survey Report this week, comparing information gathered from almost 70,000 physicians and other providers.

Primary care physicians received a median compensation of $241,273 in 2014, a 3.6 percent gain from the previous year, according to the report. By comparison, the median compensation for specialists rose 2.4 percent to $411,852. MGMA defines compensation as salary, bonuses, incentive payments, research stipends, honoraria, and profit sharing. It does not include retirement or health care benefits, automobile allowances, or expense reimbursements.

The median compensation for a family physician who performed obstetrics was $227,883; without obstetrics, the median was $221,418.

Halee Fischer-Wright, MD, the president and CEO of MGMA, said in a release that the study confirmed that compensation models have begun shifting from being purely based on productivity to ones that incorporate value.

“We hope to see physicians’ salaries remain healthy throughout this transition,” Fischer-Wright said.

Wednesday, July 22, 2015

Update on access to Quality and Resource Use Reports

The Centers for Medicare & Medicaid Services (CMS) on July 13 retired its Individuals Authorized Access to CMS Computer Services (IACS) system. Physicians used the IACS system to access their Quality and Resource Use Reports (QRURs) data. To still use QRURs, you will need to sign up for an account under the new Enterprise Identity Management (EIDM) system and access it at the CMS portal.

CMS has provided new details on physicians' options going forward:

•    If you did not have an IACS account and do not already have an EIDM account, then follow these instructions on the CMS website to sign up for an EIDM account with the correct role.
•    If you had an IACS account that you previously used to access QRURs and don’t have an EIDM account, then follow these instructions  to sign up for an EIDM account. You will be able to perform the same tasks using your EIDM account that you were able to perform with your IACS account.
•    If you already have an EIDM account, then follow these instructions to sign up for the correct role in EIDM.

For additional assistance regarding IACS or EIDM, you can contact the QualityNet Help Desk Monday through Friday from 8:00 a.m. to 8:00 p.m. (EST) at 1-866-288-8912 (TTY 1-877-715-6222), by fax at 888-329-7377, or via email at  

Additional information on accessing QRURs is available on the CMS website.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Thursday, July 16, 2015

Survey shows rise in solo practice physician searches

The number of solo practices looking for new physicians or advanced practitioners rose last year, one of the largest physician recruiters says.

Physician search firm Merritt Hawkins in its annual review says 4 percent of the 3,120 search assignments conducted by itself and affiliated firms between April 1, 2014, and March 31, 2015, were for solo practices. This represents a sizable increase from the year before when solo practice assignments made up less than 1 percent of the company’s workload.

Physician-owned medical groups also made strides, making up 20 percent of search assignments, compared with 13 percent the year before, while those from hospitals fell from 64 percent to 51 percent. But the trend is still clearly with employed practice. Merritt Hawkins said 95 percent of its assignments during the review period were for employed positions, compared with less than half in 2004. Assignments from community health centers and academic positions also increased.

Family physicians continued to be the most frequent search assignment for the ninth year in a row, followed closely by internal medicine, psychiatrists, hospitalists, and nurse practitioners. The firm noted that advanced practitioners, a category combining nurse practitioners and physician assistants, would have been fourth on the list, up from fifth last year. Four years ago, neither made Merritt Hawkins’ top 20 assignments, either together or separately.

“Concierge” and other practice models where patients pay their physician directly for care without going through third-party payers, while gathering increasing attention from physicians, remained a tiny piece of the assignment mosaic. The company said it fielded only 25 assignments for concierge practices during the review period, down from 32 in the previous year.

After hitting a five-year high last year, the average base salary for family physician assignments during the study period fell slightly, declining from $199,000 to $198,000.

While policymakers have increasingly discussed the switch of reimbursement from fee-for-service to models based on quality and value, Merritt Hawkins said only 23 percent of its assignments included bonuses tied to quality metrics, down from 24 percent during the previous year. Fifty-seven percent of assignments still relied on relative value units (RVUs) for measuring physician productivity.

Wednesday, July 15, 2015

CMS opens up 2014 Open Payments data to the public

On June 30, CMS published Open Payments data for 2014 that detail transfers of value, such as direct payments, honoraria, or research grants, by drug and medical device makers to physicians and other health care providers. The data include information about 11.4 million financial transactions, attributed to more than 600,000 physicians and more than 1,100 teaching hospitals, totaling $6.49 billion. The Open Payments program is a product of the Affordable Care Act.  

With this data release, both the 2014 and 2013 financial records are now available to the public. CMS will continue to update the Open Payments website annually to incorporate data collected from the previous year and to include updates to data disputes and other data corrections made since the initial publication. For more information about the program, including how physicians can register so they can review payments tied to them and report potential errors, please visit the Open Payments page on the CMS website.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Thursday, July 9, 2015

CMS considers separate payment for advance care planning

The Centers for Medicare & Medicaid Services (CMS) has released its proposed Medicare Physician Fee Schedule for the 2016 calendar year. Among the many updates is a proposal to pay physicians separately for providing advance care planning to Medicare patients.

Medicare currently pays for such services as part of the “Welcome to Medicare” visit, but patients may not need such services during that first visit. Proponents have said providing a separate payment for advance care planning gives physicians and Medicare patients greater flexibility and the ability to use these services when they are most needed.

CMS is actually proposing two CPT codes: 99497 for the first 30 minutes of advance care planning and 99498 for each additional 30 minutes.

For example, a patient who has been diagnosed and is receiving treatment for heart failure may want to discuss long-term treatment options, such as a heart transplant. The patient may also want to discuss advance care planning in case a health event diminishes his or her decision-making capacity. Under the proposal, the physician in this scenario could report a standard evaluation and management (E/M) code for the E/M service and 99497, as well as 99498 if appropriate. Note, the E/M and advance care planning services would not necessarily have to happen on the same day.

CMS is taking public comments on this and other proposals in the Medicare PFS through Sept. 8. It plans to issue the final rule by Nov. 1.

Tuesday, July 7, 2015

CMS sees smaller approval rate in final ICD-10 acknowledgement test

The Centers for Medicare & Medicaid Services (CMS) says it saw a slight dip in the percentage of accepted claims during its final round of acknowledgement testing ahead of the upcoming ICD-10 change.

During the June 1-5 test, the agency accepted 90 percent of the more than 13,000 test claims it received from 1,238 participants nationally. By comparison, CMS said it accepted almost 92 percent of almost 9,000 test claims during acknowledgement testing in March.

Acknowledgement testing gives physicians and others the opportunity to submit claims with ICD-10 codes to the Medicare Fee-For-Service (FFS) claims systems and receive electronic acknowledgements, confirming that their claims were accepted. CMS did not require volunteers to register, and there was no limit on the number of claims that could be submitted.

CMS officials gave no reason for the slight downturn but did say they didn’t identify any Medicare FFS claims system issues during the test period, as they haven’t in any of the previous acknowledgement tests. They added that most of the rejected claims failed for technical reasons, such as the submitter using an invalid National Provider Identifier (NPI) or the wrong date of service, and not for reasons connected to ICD-10.

Although this was the last special CMS acknowledgement testing week before the ICD-10 code switch on Oct. 1, you are welcome to submit acknowledgement test claims anytime up to the deadline. See MLN Matters Articles MM8858 or SE1501 or contact your Medicare Administrative Contractor for more information.

As a reminder, Medicare claims with a date of service on or after Oct. 1, 2015, will be rejected on and after Oct. 1 if they do not contain a valid ICD-10 code. The Medicare claims processing systems do not have the capability to accept ICD-9 codes for dates of service after Sept. 30 or to accept claims that contain both ICD-9 and ICD-10 codes.

On Monday, the CMS and American Medical Association announced efforts to ease the transition for physicians to the new code set, including a one-year grace period during which CMS will not deny or audit Medicare claims based solely on a diagnosis code being insufficiently specific as long as it is from the appropriate family of ICD-10 codes.

Even though the Oct. 1 implementation date is less than 90 days away, you still have time to prepare for ICD-10, if you have not done so already. CMS has created a number of tools and resources to help you succeed. One tool is the “Road to 10,” aimed at smaller physician practices with primers for clinical documentation, clinical scenarios, and other specialty-specific resources to help you with implementation. The American Academy of Family Physicians also has tools, articles, and other resources available for its members.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Thursday, July 2, 2015

ICD-10 has you covered this Fourth of July

Physician practices will need to switch to ICD-10 coding in about 90 days. It's something to consider as you attend July 4th celebrations this weekend: How would I use ICD-10 to code some frequent holiday-related injuries?

First off, keep hydrated and out of the sun so you don't have to worry about sunstroke (T67.0XXA) or heat exhaustion (T67.5XXA). Also, apply lots of sunscreen to avoid a nasty sunburn (L55.1).

If you are by the swimming pool, careful when you dive. Lots of people get hurt "jumping or diving into swimming pool striking bottom" (W16.52).

Summer weekends are a popular time to pull out the grill (Y93.G2). This is a wealth of potential harm, including burning your fingers (T23.031A) on the open flame (X03.0XXA) or picking up a hot burger by mistake (X10.1XXA). Alternatively, not cooking things correctly can lead to food poisoning (A05.9). Also, watch it with the beer consumption (F10.129, alcohol abuse with intoxication, unspecified).

Lastly, it wouldn't be Independence Day without some fireworks (W39.XXXA). Don't stand so close, and you won't have to worry about getting torched (T20.25XA) or losing your hearing (H93.11). 

Have fun!

Tuesday, June 30, 2015

Place of service matters in Medicare billing

Last December, I reported that the U.S. Department of Health and Human Services Office of Inspector General (OIG) planned to examine place of service (POS) coding by physicians as part of its fiscal year 2015 work plan. Last month, the OIG revealed its findings: Medicare contractors overpaid physicians $33.4 million between January 2010 and September 2012 as a result of incorrect coding related to POS. Specifically, physicians were incorrectly paid for performing these services in non-facility locations, such as physician offices or independent clinics, when they were actually working at facility locations, such as ambulatory surgery centers (ASCs) or hospital outpatient centers.

The difference between a physician’s payment for services performed in the office and services performed in a facility can be significant. Physicians are paid more for professional services performed in their offices than those they perform at hospital outpatient centers and ASCs. When a physician performs in a facility like an ASC, Medicare pays the facility, not the physician, for the facility’s overhead expense. In turn, Medicare pays the physician less under the physician fee schedule because the physician did not have the overhead and much of the other practice expenses of the facility’s location of service.

In the end, it all boils down to the POS reported on the claim. When a physician provides an office-based service, the physician should bill with the correct POS code, generally a POS code 11. When a physician provides a facility-based service, the physician should bill the services with an appropriate POS code reflecting the type of facility, for example, a POS code 22 for hospital outpatient centers or a POS code 24 for ASCs.

So, what can your practice do to avoid such errors? OIG’s report made a number of suggestions, including making sure:

• Billing staff is clear about the definition of “physician’s office” or other non-facility locations and understands the need to code POS appropriately.

• Billing staff is aware that the POS code can affect Medicare payment and that inaccurate use of non-facility POS codes can mean potential Medicare overpayments.

• Billing systems are not designed to submit all physician professional service claims with a non-facility POS code.

• You implement internal controls to identify potential coding errors before claim submission.

As noted, inaccurate use of POS codes can lead to Medicare overpayments, which, in turn, can lead to overpayment recovery efforts on the part of the Centers for Medicare & Medicaid Services (CMS) and its contractors. For instance, based on its findings, OIG recommend that CMS direct its Medicare contractors to initiate, in accordance with CMS policies, the immediate recovery of $7.3 million in potential overpayments from physicians who incorrectly coded physician services performed in ASCs and $19 million in potential overpayments related to the services that may have been performed in hospital outpatient locations. That’s in addition to the $7.1 million in potential overpayments 87 physicians told CMS they intended to pay back for incorrectly coding physician services performed in hospital outpatient locations.

OIG also recommended that CMS and its contractors continue to educate physicians and billing personnel on the importance of internal controls to ensure the correct POS coding for physician services. Finally, OIG recommended stronger and wider efforts to perform coordinated data matches of non-facility-coded physician services and facility claims to identify physician services that are at a high risk for POS miscoding and recover the overpayments that are identified as a result.

All of which means a likely greater focus and scrutiny on POS coding going forward, especially since this is not the OIG’s first inquiry into POS billing.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

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The views expressed here do not necessarily reflect the opinion of FPM or the AAFP. Some payers may not agree with the advice given. This is not a substitute for current CPT and ICD-9 manuals and payer policies. See Terms of Use.