Suggesting physician upcoding practices on a major scale, an Office of Inspector General report Thursday said Medicare overpaid physicians $6.7 billion in 2010.
The overpayments were claims reimbursements for evaluation and management (E/M) services submitted with frequently exaggerated severity codes, the report said.
After examining medical records for a large sample of those claims, the OIG found that 26% of the claims were upcoded to reflect a higher level of severity than what was justified by the patient's record, amounting to $4.6 billion in overpayments. Another 14.5% were downcoded, reflecting a lower level of severity than what was warranted, for an underpayment of $1.8 billion.
Another 12% of the claims were insufficiently documented, which meant Medicare overpaid $2.6 billion and 7% were undocumented, representing $2 billion in overpayments. About 2% of claims had other coding errors, amounting to about $500 million in overpayments.
In all, 55% of claims for E/M services had incorrect codes or lacked the necessary documentation.
Medicare paid $32.3 billion for E/M services in 2010, an amount that represented 30% of all Part B payments that year.