Medicare Overpaid Physicians $6.7B For Miscoded Claims

Cheryl Clark, May 30, 2014

An examination of medical claims records by federal officials finds that more than half of doctors' claims for patient evaluations and related services had incorrect codes or lacked the necessary documentation.

Suggesting physician upcoding practices on a major scale, an Office of Inspector General report Thursday said Medicare overpaid physicians $6.7 billion in 2010.

The overpayments were claims reimbursements for evaluation and management (E/M) services submitted with frequently exaggerated severity codes, the report said.

After examining medical records for a large sample of those claims, the OIG found that 26% of the claims were upcoded to reflect a higher level of severity than what was justified by the patient's record, amounting to $4.6 billion in overpayments. Another 14.5% were downcoded, reflecting a lower level of severity than what was warranted, for an underpayment of $1.8 billion.

Another 12% of the claims were insufficiently documented, which meant Medicare overpaid $2.6 billion and 7% were undocumented, representing $2 billion in overpayments. About 2% of claims had other coding errors, amounting to about $500 million in overpayments.

In all, 55% of claims for E/M services had incorrect codes or lacked the necessary documentation.

Medicare paid $32.3 billion for E/M services in 2010, an amount that represented 30% of all Part B payments that year.

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