High Error Rates Are Prevalent In Site-Of-Service Coding

High Site-Of-Service Coding Error Rates

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Important Points

A recent report from the Department of Health and Human Services Office of Inspector General (OIG) shows rampant site-of-service errors on physician claims.
The OIG report reviewed Medicare claims for 2005 and 2006 and found more than 857,000 claims valued at $75 million that were coded as office services, but appeared to match hospital outpatient or ambulatory surgery center services provided to the same patient on the same day. OIG then randomly selected 150 randomly selected claims, 100 from outpatient centers and 50 from ambulatory centers, and found out that 120 of the claims were coded incorrectly and potentially overpaid.
Look for higher scrutiny from Medicare in the future

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The time is now for setting up a Medicare site-of-service coding system within your practice to check accuracy since Medicare will be looking more closely at these codes in the future. A recent report from the Department of Health and Human Services Office of Inspector General (OIG) shows rampant site-of-service errors on physician claims. Some of the errors can be attributed to automation since most billing software automatically lists the Physician’s office as the default place of service. Medicare increases its fees for certain codes when they are performed in the Physician’s office so the site-of-service designation is crucial. Medicare wants physicians to realize that when they provide procedures in a facility other than their own, that facility also receives a fee to cover its expenses.

The OIG report reviewed Medicare claims for 2005 and 2006 and found more than 857,000 claims valued at $75 million that were coded as office services, but appeared to match hospital outpatient or ambulatory surgery center services provided to the same patient on the same day. OIG then randomly selected 150 randomly selected claims, 100 from outpatient centers and 50 from ambulatory centers, and found out that 120 of the claims were coded incorrectly and potentially overpaid.

Reasons OIG found for coding errors

Default physician billing software settings
Physicians’ billing personnel/agents were confused about the precise definition of a “physician’s office” or were simply following established practice in applying the office place-of-service code
Physicians’ billing agents were unaware that an incorrect place-of-service code could change the Medicare payment for a specific service
Personnel made isolated data entry errors

The Government Plans
OIG recommends that CMS seek to recover overpayment verified in the 120 claims sample and further investigate the other 856,000+ claims that were also potentially overpaid. It also suggests to push education about the need to double check site-of-service codes. Also, expect your Part A/Part B Medicare administrative contractor to run regular claims-data matches between physician services and facilities to catch site-of-service errors and recover the payments.