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wiitalaRIn the near future, Recovery Audit Contractors and Medicare Administrative Contractors (MACs) will take “appropriate action” on erroneously allowed claims identified in a recently completed audit (OEI-07-09-00450) by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG). That action will likely be RAC and MAC reviews of hospital emergency department claims for imaging services without orders or complete interpretations and reports (I&Rs).

The reason for the erroneously denied claims is one that you’ve heard over and over: a high incidence of “insufficient documentation.” This time for claims submitted for the following diagnostic services provided in hospital EDs: computed tomography (CT), magnetic resonance imaging (MRI), and X-ray services

Audit Details

The OIG investigated the accuracy of 2008 Medicare-allowed claims for the professional component (PC), which includes payments for physicians’ interpretations of images and reports on the clinical findings that are included in the hospitals’ medical records. Claims submitted for interpretations without complete written reports do not meet Medicare’s policy requirements and payment conditions.

The OIG pulled a sample of 220 CT and MRI claims and 220 X-ray claims. Their objectives were to determine whether:

Medical record documentation supported the services performed;

Physicians’ orders were present; (This point is of concern to the American College of Radiology [ACR], which stated that “CMS’s ordering physician rule does not apply to hospitals.”)

Services were performed before beneficiaries left the hospital outpatient EDs (i.e., during beneficiaries’ diagnoses and treatments). (Per CMS’s guidance, Medicare contractors reimburse only for the interpretation performed “at the same time” as the diagnosis and treatment of the beneficiary in the ED if they receive multiple claims from, for example, the ED physician and the radiologist.)

Physicians followed ACR’s documentation practice guidelines.

The Findings

In 2008, 19 percent ($29 million) of the 3 million claims for I&Rs of CT and MRI services were erroneously paid. Medicare contractors also paid close to 6.6 million claims for the I&Rs of X-ray services, and 14 percent ($9 million) of that number were paid in error. In all of these cases, the OIG discovered one or both of the following errors.

The documentation did not include physicians’ orders.

The documentation did not support that I&Rs were performed.

In addition, 71 percent of the I&Rs for X-rays did not follow one or more of the ACR’s suggested practice guidelines for documentation. Please Click Here

Finally, Medicare paid more than $10 million (16 percent of claims) for I&R of X-rays that were performed after patients left hospital outpatient EDs, indicating to the OIG (based on previous work) that these interpretations may not have contributed to diagnoses and treatments. The OIG gave several examples of this problem, including the following:

In one medical record, the ED notes included an interpretation of a chest x-ray, but the record indicated, “[T]he radiologist will read this later. If there is any significance to that, we will notify the patient.”

The OIG stated that this documentation suggests that the treating physician was preparing to discharge the beneficiary before receiving the radiology report. Although the final I&R was included in the medical record and was dictated on the same day as the beneficiary’s ED visit, OIG auditors found it “difficult to determine” whether the radiologist verbally communicated the information to the treating physician before discharge.


Recommendations and Responses

In addition to recommending that CMS take appropriate action on the erroneously allowed claims, the OIG recommended the following.

Recommendation: Educate providers on the requirement to maintain documentation on submitted claims. Remind them about the need for the medical record documentation to include (1) physicians’ orders to support diagnostic radiology services performed and (2) complete I&Rs.

Response: CMS agreed will the recommendation, saying that it will issue an educational article to the provider community to emphasize that it will enforce documentation requirements. It will continue to monitor and refine its oversight of diagnostic radiology services.

Recommendation: Adopt one policy for single and multiple claims for I&Rs. Require that claimed services be contemporaneous or identify circumstances in which noncontemporaneous interpretations may contribute to the diagnosis and treatment of beneficiaries in hospital outpatient EDs.

Response: CMS did not agree that a single billed interpretation must, in all cases, be contemporaneous with the beneficiary’s diagnosis and treatment. It believes that continued diagnosis and treatment can extend beyond the emergency encounter to other follow-up settings.

To this second response, the OIG stated that it agrees that diagnosis and treatment may extend to other settings subsequent to the ED encounter; however, it maintains that payment rules should uniformly require that an I&R on an ED x-ray be contemporaneous with the beneficiary’s diagnosis and treatment. If not, they should satisfy some other criteria demonstrating the interpretations’ contribution to patient care.

The OIG believes that CMS’s current payment policy applies requirements inconsistently in different situations. Specifically, when a MAC receives multiple claims for an ED x-ray, it pays only for the I&R that directly contributed to the beneficiary’s diagnosis and treatment. Any other I&R is treated as part of the hospital’s quality assurance program.

In contrast, when a MAC receives one I&R claim in connection with an ED X-ray, current policy drops the requirement for contemporaneity and contribution altogether. The MAC must presume that the one service billed was a medical service to the individual and not quality assurance and pays the claim if it otherwise meets any applicable reasonable and necessary test.

The OIG says, “This inconsistency is not explained, nor do we believe the underlying rationale is obvious.”

The OIG report summarized above is available at:


About the Author

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

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Randy Wiitala, BS, MT (ASCP)

Randy Wiitala, BS, MT (ASCP) conducts CPT coding and chargemaster assessments, reviews provider operations for regulatory agency compliance, evaluates administrative policies and procedures and assists in the development of quality-assurance programs. He's also a frequent seminar presenter, speaking to hospitals, corporations, clinics, state hospital associations and professional organizations. These educational programs cover a variety of areas, such as coding, regulatory compliance and reimbursement for laboratories; chargemaster system management; and APCs. Randy contributes to a number of MedLearn books, as well as the Laboratory Compliance Manager newsletter. He is the project lead on MedLearn's RAC Outpatient Data Analytics. He is a member of the American Society of Clinical Pathologists, the National Certification Agency and Healthcare Financial Management.

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