December 2005

OIG says CMS overpaid modifier 59 claims

The Centers for Medicare and Medicaid Services (CMS) may be scrutinizing the use of modifiers 59 and 25. According to a report issued by the Office of Inspector General, the watchdog of the Department of Health and Human Services (HHS) programs, 40 percent of code pairs billed with modifier 59 in fiscal year 2003 did not meet program requirements, resulting in an estimated $59 million in improper payments.

The report also found that 35 percent of claims for E/M (evaluation and management) services allowed by Medicare in 2002 did not meet program requirements, resulting in $538 million in improper payments.

The OIG report did not differentiate between medical and chiropractic payments.

Modifier 59 is used to indicate that a provider performed a distinct procedure or service for a beneficiary on the same day as another procedure or service. Modifier 59 should be attached to the secondary, additional, or lesser service in the code pair.

The report showed that in 15 percent of modifier 59 cases, the services coded were not distinct. And in 25 percent, the services were not adequately documented. The audit also found that 11 percent of code pairs billed with modifier 59 in fiscal year 2003 were paid when modifier 59 was billed with the incorrect code.

To correct the problem, OIG recommended that CMS:

• Encourage carriers to conduct prepayment and post-payment reviews of the use of modifier 59 and

• Ensure that carriers’ claims processing systems only pay claims with modifier 59 when the modifier is billed with the correct code.

CMS concurred with these recommendations.

Modifier 25 is used to flag separate significant same-day evaluation and management (E/M) services performed on the same beneficiary.

The report said that 35 percent of claims using modifier 25 did not meet program requirements.

The agency recommended that CMS work with carriers to reduce the number of claims submitted using modifier 25 that do not meet program requirements, emphasize that providers must maintain appropriate documentation of both the E/M services and procedures, and remind providers that modifier 25 should only be used on claims for E/M services.

CMS concurred with OIG's recommendations.

The reports are available online at the OIG Web site, www.oig.hhs.gov.

Source: Office of Inspector General, www.oig.hhs.gov

Industry News from:
Chiropractic News from: