Medicare Compliance & Reimbursement

Keep your practice out of OIG crosshairs for electrodiagnostic tests.

An April 2014 report from the HHS Office of the Inspector General (OIG) shows the sharp rise in Medicare spending on electrodiagnostic tests between 2002 and 2011. Learn what you need to do — and not do — to avoid unwanted attention from the enforcement agencies. 

Learn What Led to the Investigation

Electrodiagnostic testing became a point of focus for the OIG because of recent spending patterns. Medicare reimbursement for electrodiagnostic testing has outpaced the growth in overall Medicare spending in recent years. According to the report, Medicare Part B spending on electrodiagnostic testing increased 74 percent from 2002 to 2011 ($279 million to $486 million). Overall Medicare spending for Part B items and services during the same time frame increased 50 percent.

What’s covered: Medicare Part B pays for electrodiagnostic tests that are medically reasonable and necessary and are performed by physicians or licensed, certified non-physician personnel under appropriate physician supervision. Medicare requires a physician or other qualified non-physician practitioner to order the test and to use the test results to manage a specific medical problem.

The Medicare physician fee schedule sets payment rates for electrodiagnostic tests based on the location where the physician performed the service. In 2011, Medicare’s payment amounts for nerve conduction tests (NCTs) ranged from $46 to $84 and its payment amounts for needle EMGs ranged from $57 to $174. OIG’s investigation found that physicians in the New York, Los Angeles, and Houston areas had the highest total questionable Medicare billing for electrodiagnostic tests in 2011.

Guard Against Questionable Billing Practices

The investigation led to CMS developing seven measures of questionable billing for electrodiagnostic tests that you need to adopt.

If you submit an unusually high percentage of electrodiagnostic test claims to Medicare with the following, you could wind up being investigated:

1. Modifier 59. This modifier is used to bill for a significant, separately identifiable non-E/M service by the same physician on the same day as another procedure. However, payments for both services are appropriate only under certain circumstances. Past OIG studies have found that some physicians and providers used this modifier to increase payments inappropriately.

2. Modifier 25. This modifier is used to bill for a significant, separately identifiable E/M service by the same physician on the same day as another procedure. However, payments for both services are appropriate only under certain circumstances. Past OIG studies have found that some physicians and providers used this modifier to increase payments inappropriately.

3. Electrodiagnostic tests by physicians in specialties other than neurology and physiatry is questionable because they may be overutilizing these tests to evaluate beneficiaries or billing for services that were never performed.

4. Claims that did not include both an NCT and a needle EMG test. High billing of electrodiagnostic tests with such claims is questionable because these two tests are typically performed together. However, needle EMGs are optional when diagnosing carpal tunnel syndrome. Therefore, the OIG did not count a physician’s claims for an NCT performed without a needle EMG as questionable when the associated diagnosis was carpal tunnel syndrome.

5. High average number of miles between the physicians’ and beneficiaries’ locations. Physicians with an unusually high average number of miles between the two are questionable because they may be billing for services that were not medically necessary or were never performed.

6. High percentage of beneficiaries for whom at least three physicians billed Medicare for electrodiagnostic tests. When multiple physicians bill for services provided to the same beneficiary in a given period, there is potential for fraud (i.e., beneficiary-sharing).

7. High average number of electrodiagnostic test claims for the same beneficiary on the same day. A high number of electrodiagnostic claims for the same beneficiary on the same day by the same physician is questionable because the physician may be overutilizing electrodiagnostic tests to evaluate the beneficiary on the same day, or billing for services that were never performed.

According to the report, “Although some of this billing may be legitimate, physicians who have an unusually high amount of questionable billing warrant further scrutiny. We classified physicians into two groups on the basis of their specialty to ensure that physicians’ billing was compared to that of their peers. That is to say, we accounted for individuals who have special training in electrodiagnostic medicine, and therefore may see more patients who require electrodiagnostic testing, and may bill for more of these tests. One group consisted of neurologists and physiatrists, and the second group consisted of the remaining physicians in other specialties.”

Hitting home: A total of 4,901 physicians met or exceeded the threshold for at least one measure of questionable billing, representing 23 percent of the 21,663 physicians who billed for electrodiagnostic services in 2011. These questionable billings accounted for 31 percent ($139 million of $486 million) of the Medicare payments for electrodiagnostic tests in 2011.

Overall, 13 percent (644 of 4,901) of physicians with questionable billing exceeded the thresholds for two or more measures of questionable billing.

Know What Your MAC Expects

Medicare Administrative Contractors (MACs) have the power to develop and implement policies to ensure that providers file claims and get paid appropriately. These Local Coverage Determinations (LCDs) provide guidance when no national policy exists, and can further define the national policy’s coverage requirements, such as including a list of diagnosis codes that meet medical necessity.

For example, MACs can establish LCDs that set utilization limits or clinical requirements for specific types of electrodiagnostic test claims in their coverage area. These coverage rules can vary across MAC jurisdictions. Other directives found in some LCDs for electrodiagnostic tests include:

Append modifier 59 (Distinct procedural service) to a claim if the physician conducts needle EMG testing on more than one limb during the same day.

Include modifier 25 (Significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service) when the physician’s documentation supports a separate, identifiable physician visit was performed beyond the low level physician exam that is typically performed to determine the medically necessary patient-specific electrodiagnostic tests.

Maximum units of service that the physician can bill under most circumstances for a single patient on the same day. For example, CMS had a medically unlikely edit (MUE) in 2011 stating that two tests for a patient on the same day was the maximum “units of service” (or, in this case, the maximum number of tests) for a single NCT (code 95905, Motor and/or sensory nerve conduction, using preconfigured electrode array[s], amplitude and latency/velocity study, each limb, includes F-wave study when performed, with interpretation and report).

Bottom line: The OIG report’s recommendations are twofold:

Increase monitoring of billing for electrodiagnostic tests including both MAC and ZPIC contractors and Medicare’s response to also involve the RAC contractors for possible review and overpayment recovery

Develop comparative billing reports on electrodiagnostic testing that includes all specialties, including neurology and physiatry.

With electrodiagnostic tests back on the OIG’s radar, now is the perfect time to verify that you’re meeting local and national coding guidelines for NCT and needle EMGs. To read the entire OIG report, visit http://oig.hhs.gov/oei/reports/oei-04-12-00420.pdf.