CMS Releases Physician Payment Data – Should E/M Providers Be Concerned?

Earlier this month, CMS released its first set of Medicare Provider Utilization and Payment Data for physicians and physician practices. As part of the Obama Administration’s efforts to make Medicare more transparent, CMS has prepared a public data set providing information on services and procedures provided to Medicare beneficiaries under Medicare Part B. This information includes the types and number of services and procedures provided by physicians, as well as the amount of payments each physician received from the Medicare program in calendar year 2012.

According the data, office/outpatient evaluation and management services (e.g., CPT codes 99213 and 99214) were the most frequently billed services by physicians and accounted for nearly $11 billion of the $77 billion in Medicare payments to physicians in 2012.

Physician evaluation and management (E/M) services have been an increasing focus of audits by CMS contractors – typically, Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs). Furthermore, with the moratorium on Recover Audit Contractors (RACs) ability to audit Part A hospital claims being extended to March 2015, we expect the RACs to shift their audit focus from Part A to Part B claims. Based on the changing audit landscape and the utilization and payment data recently released by CMS, physicians can only expect to be an even greater target of Medicare audits.

Wachler & Associates has extensive experience defending physicians against Medicare audits of E/M services. During reviews of E/M services, CMS contractors often determine that the level of E/M service billed by the physician is not supported by the corresponding medical records, which results in the contractor down-coding the level of E/M service (e.g., 99214 is down-coded to 99213). Although the difference in reimbursement between the original and down-coded E/M service is not substantial, we often see CMS contractors review hundreds of E/M services during a single audit and/or use statistical extrapolation to audit all of the E/M services provided by the physician during a two-year time frame. Thus, when hundreds, or even thousands, of E/M claims are included in an audit, a negative determination by the contractor can be financially devastating to a physician’s practice. Furthermore, contractors will often review a small sample of E/M claims only to come back at a later time to audit a much larger sample or place a physician on prepayment review.

Regardless of the type of audit at issue, physicians and physician practices should fully understand the implications of a Medicare audit and must not take an audit lightly. If you or your practice needs assistance in defending against a Medicare audit, or have questions about how you can start preparing for an audit in an effort to mitigate potential risks, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888 or wapc@wachler.com.