Auditors estimate that Medicare overpaid physicians $28.8 million in 2008 and 2009 for ambulatory and outpatient services that were performed in hospitals instead of doctors' offices, according to two reports released Friday. But federal officials say they may not investigate because of the cost of reviewing paid claims.
Auditors: Medicare overpaid docs $28.8 million
Under Medicare, the entity that provides the space for a medical procedure is compensated for its overhead costs. Physicians, or their independent billing consultants, can increase Medicare reimbursements by claiming to have provided space for the services that were actually done at hospitals or freestanding ambulatory surgery centers.
Investigators with HHS' Office of the Inspector General reported that they found more than one million Medicare claims for which both hospitals and physicians were paid for providing facility space for the same procedure on the same day for the same patients in 2008 and 2009.
The audits released Friday found that in two samples, more than 80% of those claims resulted in overpayments to physicians. Those mistakes gave physicians an extra $19.3 million in 2008 (PDF) and $9.5 million in 2009 (PDF), estimates found.
It's not a new controversy: Numerous previous audits have found physicians claiming space they didn't provide.
In response to the audits, the CMS said it would consider investigating the estimated $28.8 million in overpayments. However, the agency noted also that it must consider "return on investment" in such reviews. Similar overpayment estimates from auditors in a 2005 and 2006 were never investigated after the CMS concluded it would cost more to investigate the claims than it would be able to recoup, according to an Aug. 4 letter from CMS Administrator Dr. Donald Berwick.
For their part, physicians interviewed by the auditors explained that Medicare's billing system is extraordinarily complex, and either their staffs or billing agents may have been confused about the precise selection of a facility on claims forms. Some doctors also told the auditors that their billing agents were unaware that place-of-service can change the payments for services.
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.