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The Office of Inspector General of the Department of Health and Human Services (OIG) is investigating CPT billing codes used by physicians for Evaluation and Management Services.

The OIG issued a report in May 2012 identifying problems in the use of CPT billing codes relating to Evaluation and Management Services by physicians and other healthcare providers.

Evaluation and management services are visits with beneficiaries ("beneficiaries" is the term used for patients by the OIG) by physicians and non-physician practitioners to assess and manage patients' health. The Inspector General considers these services to be vulnerable to fraud and abuse, and therefore issued this report and announced that additional reports will follow as the OIG continues to study this problem area.

Evaluation and management services are billed using CPT codes that define the complexity of the service during patient visits with physicians. Such visits can occur in an office or in a hospital. Visits have five different CPT codes. The more complex the visit, the greater the amount of payment from Medicare. The OIG study revealed that between 2001 and 2010 Medicare payments for evaluation services increased by 48%, from $22.7 billion to $33.5 billion.

Evaluation and Management codes for a new patient visit to a physician's office can be billed under one of five different CPT codes. The lowest level CPT code is 99201 and the highest is 99205. The amount that Medicare pays depends upon the complexity of the visit. The amounts paid in 2010 for the five different CPT codes ranged from $19 to $213.

The level of the evaluation and management services by the physician corresponds to the amount of skill, effort, time, responsibility, and medical knowledge required for the physician to deliver the service to the patient. There are three key components a physician must use in determining the appropriate CPT code to bill. These three components are the patient's history, physical examination, and medical decision making.

The CPT codes are not necessarily easy to understand and are subject to different interpretations. In addition, the CPT codes change over time. The Centers for Medicare and Medicaid Services routinely updates its coverage requirements for evaluation and management services. As a result of the periodic changes and the obligations of healthcare providers to bill properly and maintain appropriate records to justify billing, healthcare providers are placed in a precarious position. In order to avoid problems involving not only repayment for improper billing but also potential criminal investigation and prosecution, care must be taken at all times to ensure that billing and code selection is properly documented, using the most recent announcements of the Center for Medicare and Medicaid Services.

The OIG has announced it will continue to study this area and recommended that physicians be educated on proper billing for evaluation and management services, and that contractors be encouraged to review physicians' billing for evaluation and management services. The OIG also recommended that physicians who bill using evaluation and management codes higher than those used by other similarly situated physicians be reviewed for appropriate action.

In its report the OIG made reference to two civil cases filed against healthcare providers under the False Claims Act. In addition, there is always the possibility of a criminal investigation and prosecution if the investigation leads the OIG to believe that fraud occurred in the use of improper CPT codes.

A healthcare provider should take seriously any Medicare or Medicaid audit or visit from special agents of OIG or state investigators.

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