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HHS says wrong coding leads to millions in physician overpayments



The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) found that many physicians billed incorrect place-of-service codes on Medicare Part B claims paid by Medicare contractors. These errors led to approximately $33.4 million in improper payments from January 2010 through September 2012. Specifically, services provided in the facility setting, such as an ambulatory surgery center or hospital outpatient department, were improperly coded as if they were performed in the non-institution or “office” setting. This miscoding resulted in overpayments because Medicare pays a higher rate for services provided in the non-facility setting.

The OIG urged the Centers for Medicare & Medicaid Services to direct its contractors to:

• Initiate immediate recovery of $7.3 million in potential overpayments

• Monitor the recovery of $7.1 million from 87 physicians who said they would refund their overpayments

• Recover $19 million in potential overpayments identified through a computer match

• Educate physicians and billing personnel about the importance of internal controls to ensure proper place-of-service coding

• Expand and strengthen efforts to perform coordinated data matches of non-facility-coded physician services and facility claims in order to identify physician services that are vulnerable to place-of-service miscoding

• Improve overpayment recovery efforts

More information and the OIG report are available on the HHS website at

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