In a July 28, 2010 report, the Department of Human Services, Office of Inspector General (OIG) estimated that incorrect place-of-service coding on claims for physician services under the Medicare Part B program has resulted in millions of dollars in overpayments to providers nationwide. The report, titled “Review of Place-of-Service Coding for Physician Services Processed by Medicare Part B Carriers During Calendar Year 2007,” recommended that the Centers for Medicare & Medicaid Services (CMS) instruct its contractors to reopen the claims identified during the audit, recover overpayments from providers, and to take other steps to prevent incorrect place-of-service coding.
Medicare reimburses physicians different rates based on the location of where the services are performed. For example, nonfacility settings, such as a physician’s office, are reimbursed higher than hospital settings. In its audit of 2007 claims, the OIG found that 90 of the 100 services sampled were incorrectly coded for place-of-service. Based on the audit results, the OIG estimates that Medicare overpaid physicians $13.8 million for incorrectly coded services in 2007. The OIG further concluded that physicians “knew, or should have known” that incorrect place-of-service coding was used on claims for reimbursement for physician services under the Medicare Part B program.
CMS has agreed with the results of the report and requested the underlying data needed to begin recovery of overpayments, which the OIG has agreed to provide. Physicians may see increased enforcement and overpayment recovery efforts in connection with place-of-service coding on claims for reimbursement under the Medicare Part B program.