Government Targets “Office-Based” Claims
By Justin Vaughn, M.Div, CPC
Director of Compliance

9/29/2011

The Office of the Inspector General (OIG), working under the U.S. Department of Health and Human Services (DHHS), recently announced that 83% of sample claims were incorrectly coded and ultimately overpaid in 2009.  Remarkably, the claims’ deficiency was tied to an incorrect place of service (POS) code.  While the claims were listed with POS 11 (office), the services were actually performed in a facility, such as a surgery center (POS 24), resulting in inappropriate overpayments to physicians.

Due to such a high incidence of incorrect POS coding uncovered in its review, and a determination via extrapolation that this miscoding error is occurring on a vast scale, the OIG has recently recommended that CMS undertake the following actions:

• Immediately reopen and review claims associated with nearly a half-million services not yet sampled, and work with providers to recover any identified overpayments (which the OIG estimates to be in the neighborhood of $9.5 million).

• Strengthen educational processes to re-emphasize to physicians and their billing agents the importance of correctly coding the POS.

The lesson providers should take away from this article is to ensure you are consistently identifying the correct place of service (office, outpatient hospital, inpatient hospital, ASC, etc.) when submitting documentation of services to Medac.  You should also make sure that Medac has on record the correct place of service as it concerns your main practice locations.  For example, if you have informed us that your “clinic,” which may be located within an ASC or outpatient hospital, is an “office” setting (POS 11), you may want to confirm the accuracy of that information.  Is it really an office?  Are you leasing the space?  Are there sufficient walls of separation between the leased space and the rest of the facility?  Getting the place of service right is the first step to surviving the government’s newest effort at recouping a portion of your payments.

The information presented herein reflects general information that is current as of the date it was first published.  In light of changes that may occur in the health care regulatory and compliance environments, the author's presentation of this information might become outdated.  Please check with your individual legal and/or compliance advisor(s) prior to taking any significant actions based upon the information and advice presented.