By Rebecca Mayo, J.D
A review of Medicare Part B payments found that Medicare was often billed by skilled nursing facilities under the Part A consolidated billing and by ambulance suppliers under Part B for the same services.
The HHS Office of Inspector General (OIG) reviewed two years of Medicare Part B payments to ambulance suppliers for services provided to beneficiaries in Part A skilled nursing facilities (SNFs) stays, and found that Medicare was often billed twice for ambulance transportation. The OIG found that out of $25.3 million in payments, an estimated $19.9 million was overpaid for ambulance transportation that was billed twice. These overpayments were due to poorly designed Common Working File (CWF) edits that were not designed to prevent or detect Part B overpayments for all transportation subject to consolidated billing. Additionally, ambulance suppliers did not have the necessary controls to prevent incorrect billing (OIG Report, No. A-01-17-00506, February 6, 2019).
Billing regulations. Medicare reimburses skilled nursing facilities (SNFs) for virtually all of the costs of furnishing post-hospital extended-care services to beneficiaries. Under the consolidated billing regulations, SNFs bill Medicare for the services, including services that are provided by outside suppliers. In turn, the outside suppliers bill the SNFs. The SNF benefit includes medically necessary ambulance transportation provided to a SNF resident during a covered Part A stay, with certain exceptions. Therefore, ambulance transportations should be billed to Medicare by the SNF and the ambulance supplier should bill the SNF.
Review and findings. The OIG reviewed $25.3 million in Medicare Part B payments, from 2014 through 2016, to ambulance suppliers for services provided to beneficiaries in Part A SNF stays. The OIG took a random sample of 100 beneficiary days from the total 58,006 beneficiary days in the sample time frame. Of those 100 days, the OIG found that Medicare made incorrect Part B payments to ambulance suppliers for 78 of those days for transportation services that did not suspend or end the beneficiaries’ SNF resident status and were not related to dialysis and were included in Medicare Part A payments to SNFs. The services were for transporting beneficiaries, mostly to outpatient hospitals, to receive services that included x-rays, blood testing, and evaluations.
This resulted in overpayments to ambulance suppliers totaling $41,456 and $10,723 in deductible and coinsurance amounts that may have been incorrectly collected from beneficiaries or from another payer on their behalf. On the basis of the sample results, the OIG estimated that Medicare made a total of $19.9 million in Part B overpayments to ambulance suppliers for transportation services for beneficiaries in Part A SNF stays. Further, beneficiaries incurred an estimated $5.2 million in coinsurance and deductible liabilities related to these incorrect payments.
Cause. Medicare contractor claims are sent to CMS’s CWF for verification, validation, and payment authorization. The CWF contains system edits that should prevent or detect overpayments for outside services provided during Part A covered SNF stays. However, the edits for ambulance transportation are limited to detecting suppliers’ claims for transporting SNF residents to or from diagnostic or therapeutic site other than a hospital or physician office and claims for transporting SNF residents to or from another skilled nursing facility. The CWF edits were not designed to prevent or detect Part B overpayments for all transportation subject to consolidated billing. Additionally, ambulance suppliers did not obtain confirmation of the beneficiary’s Part A SNF resident status from the SNFs before billing Medicare. Finally, ambulance suppliers did not fully understand that some third-party services did not suspend beneficiaries’ SNF resident status and were, therefore, subject to consolidated billing.
Recommendations. The OIG recommended that CMS redesign the CWF edits to prevent Part B overpayments to ambulance suppliers for transportation services provided to beneficiaries in Part A SNF stays. Additionally, CMS should recover the portion of incorrectly billed claims that resulted in overpayments within the 4-year reopening period. CMS should notify the ambulance suppliers so they can exercise reasonable diligence to investigate and return any identified overpayments. Guidance and education should be provided to ambulance suppliers on what services should not be billed to Medicare Part B and on strengthening billing controls to ensure compliance. Ambulance suppliers that engage in a pattern of incorrect billing should be identified and referred to OIG for possible additional enforcement action.
CMS concurred with the recommendations and will instruct contractors to recover overpayments, review data to identify additional potential overpayments, and notify suppliers. CMS is also working to update the claim processing system and will continue to educate suppliers on the billing requirements. Finally, CMS has issued notices about its planned revisions to the CWF edits which will be implemented in April 2019
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