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«CIN: A-09-01-00084 The Group physicians failed to ensure that their presence during the hemodialysis procedure was documented in the medical records ...»

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DEPARTMENT OF HEALTH & HUMAN SERVICES Office of Inspector General

CIN: A-09-01-00084

The Group physicians failed to ensure that their presence during the hemodialysis procedure

was documented in the medical records before billing hemodialysis services, and

The Group established a standard procedure to provide a repeated evaluation of patients

during the hemodialysis procedure without considering the Medicare requirement for

medical necessity.

Page 2 - Dr. Henry E. Elson

We recommend that the Group:

1. Refund the overpayment of $151,566 to the Medicare program, and 2. Develop policies and procedures to ensure that the physician’s presence and medical necessity requirements are met and documented in the medical records before billing the Medicare program for hemodialysis services.

In a written response to our draft report (see APPENDIX A), the Group agreed with our findings.

INTRODUCTION

BACKGROUND

The Medicare program, established by Title XVIII of the Social Security Act, provides health insurance coverage to people age 65 and over, the disabled, and people with end-stage renal disease (ESRD)1. Administered by the Centers for Medicare & Medicaid Services (CMS)2 within the Department of Health and Human Services (HHS), the program consists of two components Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B). Part B covers a multitude of medical services including physician services. The Medicare Carriers Manual (MCM), published by CMS, sets forth the billing requirements for paying physician services under Part B.

Medicare claims for Part B are processed by Acarriers@ which are agents contracted by HHS.

In our audit, we reviewed physician services provided to Medicare beneficiaries requiring dialysis services. There are two types of renal dialysis, hemodialysis3 and peritoneal dialysis4. Dialysis services can be provided at either an inpatient or outpatient setting. Our audit focused on inpatient hemodialysis procedure services provided by physicians.

The term ESRD means that Astage of kidney impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life@ [MCM '2230.1.A].

The former name of Centers for Medicare & Medicaid Services (CMS) was Health Care Financing Administration (HCFA).

Hemodialysis is a process A[w]here blood is passed through an artificial kidney machine and the waste products diffuse across a man-made membrane into a bath solution known as dialysate after which the cleansed blood is returned to the patient’s body@ [MCM 2230.1.B.1].

Peritoneal Dialysis is a process A[w]here the waste products pass from the patient’s body through the peritoneal membrane into the peritoneal (abdominal) cavity where the bath solution (dialysate) is introduced and removed periodically” [MCM 2230.1.B.2].

Page 3 - Dr. Henry E. Elson The Physician’s Current Procedural Terminology (CPT)5 includes the following codes for

hemodialysis services provided on an inpatient basis:

CPT 90935 - Hemodialysis procedure with single physician evaluation, and CPT 90937 - Hemodialysis procedure requiring repeated evaluation(s) with or without substantial revision of dialysis prescription.

For physicians to receive payments based on inpatient dialysis procedure codes, the MCM requires:

–  –  –

The medical record must document that the physician was physically present with the patient at some time during the course of the dialysis [MCM '15062.1.C.2], and

–  –  –

In the September 1988 Medicare Newsletter, the Carrier6 informed physicians of the presence requirement by stating, “[p]hysicians may bill inpatient dialysis procedure codes only if they visit the patient during the dialysis treatment and the medical record documents this.” In addition, in the July 1989 Medicare Newsletter, the Carrier informed physicians of the medical necessity requirement by stating, “…multiple visits on the same day must be documented to indicate the visits were at different times and were medically necessary.” [Emphasis Added.] The Group, located in Oxnard, California was incorporated on December 26, 1991. There were five physicians practicing under the Group in CY 1998 and 1999.

OBJECTIVE, SCOPE AND METHODOLOGY

OBJECTIVE

The objective of our audit was to determine whether hemodialysis services provided by Group physicians to California beneficiaries during CY 1998 and 1999 were allowable and documented in the medical records in accordance with Medicare requirements.

Current Procedural Terminology (CPT) is a listing of descriptive terms and identifying codes for reporting medical services and procedures performed by physicians. The CPT book is published by the American Medical Association annually.

Transamerica Occidental Life Insurance was the former Carrier, which handled Medicare billings for the area where the Group was located. National Heritage Insurance Company is the current Carrier for the State of California.

Page 4 - Dr. Henry E. Elson SCOPE Our audit was conducted in accordance with generally accepted government auditing standards.





Our audit was limited to determining whether:

The place of service was an inpatient hospital, The medical record documented the physician’s presence with the patient during the hemodialysis procedure, and The medical record documented the medical necessity for the physician’s repeated evaluation of patients during the hemodialysis procedure.

Our review of the Group=s internal control structure was limited to those controls relating to the submission of claims to Medicare. The objective of our audit did not require an understanding or assessment of the entire internal control structure at the Group.

Our fieldwork, which included visits to hospitals in the Oxnard, California area; the Carrier; and the Group’s office in Oxnard, California, was performed during the period April 2001 to August 2001.

METHODOLOGY

To accomplish our objective, we performed the following steps:

–  –  –

Interviewed appropriate CMS and Carrier officials to obtain an understanding of how the hemodialysis services should be documented in the medical records,

–  –  –

Reviewed all other services provided to beneficiaries associated with the 100 services and determined if additional Evaluation and Management (E & M)7 services were paid to the same physician who received the payment for hemodialysis services, E & M services represent the classification of physicians= work. They are divided into broad categories such as office visits, hospital visits and consultations.

Page 5 - Dr. Henry E. Elson Interviewed dialysis nurses to obtain an understanding of how physicians care for patients during the hemodialysis procedure, Interviewed Group officials to obtain an understanding of how physicians care for patients during the hemodialysis procedure,

–  –  –

Details on our statistical sampling methodology are presented in APPENDIX B.

FINDINGS AND RECOMMENDATIONS

The audit included a review of a random sample of 100 hemodialysis services to determine if they met the inpatient hospital place of service, the physician’s presence, and the medical necessity requirements as stated in the MCM. These 100 services were comprised of 6 services for hemodialysis procedure with single physician evaluation (CPT 90935) and 94 services for hemodialysis procedure requiring repeated evaluation (CPT 90937).

We found that all 100 services met the inpatient hospital place of service requirement. However, 11 of the 100 services did not meet the Medicare requirement for documenting the physician’s presence during the hemodialysis procedure. For these 11 services, the Group billed and was paid for CPT 90935 and CPT 90937 even though the documentation in the medical records did not support the physician’s presence during the hemodialysis procedure. In addition, 61 of the 100 services did not meet the Medicare requirement for documenting the medical necessity for the physician’s repeated evaluation of patients during the hemodialysis procedure. For these 61 services, the Group billed and was paid for CPT 90937 even though the documentation in the medical records did not support the medical necessity for the physician’s repeated evaluation of patients during the hemodialysis procedure.

As a result, we determined that, of the $13,245 reviewed, $4,113 was unallowable. We projected the results of the statistical sample to the population using standard statistical methods and estimated that at least $151,566 of the $542,996 paid to the Group for CY 1998 and 1999 was ineligible for Medicare reimbursement. These overpayments occurred because the Group physicians failed to ensure that their presence during the hemodialysis procedure was documented in the medical records before billing hemodialysis services. Also, the Group established a standard procedure to provide a repeated evaluation of patients during the hemodialysis procedure without Page 6 - Dr. Henry E. Elson considering the Medicare requirement that the repeated evaluation be medically necessary to bill CPT 90937. Details of our findings are presented in APPENDIX C.

PHYSICIAN PRESENCE

We determined that 11 of the 100 services reviewed did not have sufficient documentation to support the physician’s presence during the hemodialysis procedure. Of 11 services, 1 service was billed and paid for as CPT 90935, and 10 services were billed and paid for as CPT 90937.

In order to be paid for the hemodialysis service, the MCM '15062.1.C.2 requires that the physician be physically present with the patient during the hemodialysis procedure and the medical record must

document the physician’s presence. It also states that:

If the physician visits the dialysis inpatient on a dialysis day, but not during the dialysis treatment, do not pay the physician on the basis of a [hemodialysis] procedure code.

The nature of these services is the same as physicians= services furnished to any inpatient during a hospital visit. Therefore, use the same hospital visit codes that apply to any other physicians treating hospital inpatients. [MCM '15062.1.C.2] In addition, the July 1989 Medicare Newsletter issued by the Carrier states that the physician’s repeated evaluation of patients on the same day must be documented to indicate that the physician’s evaluations were at different times and were medically necessary.

For one service that was billed and paid for as CPT 90935 and lacked documentation to support the physician’s presence, we determined that this service would be allowable as a subsequent hospital care service. Because the payment for CPT 90935 is higher than the one for subsequent hospital care, the Group received an overpayment of $36, representing the difference between the payment for CPT 90935 and subsequent hospital care service.

For 108 services that were billed and paid for as CPT 90937 and lacked documentation to support the physician’s presence for the repeated evaluation, we determined that these services would be allowable as CPT 90935. The documentation in the medical records supported only a single physician evaluation of patients during the hemodialysis procedure. Because the payment for CPT 90937 is higher than the one for CPT 90935, the Group received an overpayment of $580, representing the difference between the payment for CPT 90935 and CPT 90937.

These overpayments occurred because the Group physicians failed to ensure that their presence during the hemodialysis procedure was documented in the medical records before billing hemodialysis services.

These 10 services also did not meet the medical necessity requirement.

Page 7 - Dr. Henry E. Elson

MEDICAL NECESSITY

We determined that 61 of the 100 services reviewed did not have sufficient documentation to support the medical necessity for billing CPT 90937.

The MCM '15062.1A.1 and 15062.1C.1 states that the Medicare program covers physician’s services that are medically necessary. The MCM '15062.1A.1 further states, “[t]he hospital medical record must document the services furnished and the medical reasons for them.” The July 1989 Medicare Newsletter issued by the Carrier states, “… multiple visits on the same day must be documented to indicate the visits were at different times and were medically necessary.” [Emphasis Added.] For 61 services that lacked documentation to support the medical necessity, we determined that these services would be allowable as CPT 90935. Because the payment for CPT 90937 is higher than the one for CPT 90935, the Group received an overpayment, representing the difference between the payment for CPT 90937 and CPT 90935. The following example illustrates our decision making process for the medical necessity and the calculation of the overpayment for one service reviewed.

The physician billed a service as CPT 90937 and received a payment of $129.30. A review of the documentation in the medical records revealed that the physician visited the patient twice during the hemodialysis procedure. His two visits were 20 minutes apart. The patient was stable and tolerated the hemodialysis procedure well with no obvious problems. We determined that the documentation did not support the medical necessity for the physician’s repeated evaluation of patients during the hemodialysis procedure.

We allowed the payment for CPT 90935 for this service. We disallowed the difference between the payment made for CPT 90937 and the payment that would have been made for CPT 90935.

CPT 90937.…..………

CPT 90935………………………................ 75.38 (Allowed) Unallowable



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