Revenue Cycle Insider

Federal agencies uncovered double payments after providers billed Medicare and the VA.

A recent Office of Inspector General (OIG) audit found that Medicare was billed and paid providers for medical services authorized and paid for by the Department of Veterans Affairs (VA). The audit identified overpayments of upward of $128 million.

Background: Medicare Secondary Payer (MSP) is intended to protect the Medicare program from paying for items and services provided to Medicare patients when another entity should pay first. Medicare participation provisions require providers determine upfront if other insurance is primary over Medicare.

Problem: Over the five-year audit period (2017-2021), the OIG found that Medicare was billed and it paid for services that were the sole responsibility of the VA. The audit also revealed that duplicate Medicare payments largely increased during this same timeframe.

What the Audit Uncovered

The OIG audit determined that duplicate payments were made for various types of medical services. Of the almost 300,000 claims found with erroneous Medicare payments, the type of claims incorrectly paid consisted of:

• Inpatient care (1 percent of claims),
• Professional services (91 percent of the claims), and
• Skilled nursing facility services, home health services, and durable medical equipment (the remaining less than 1 percent of claims).

Note: The claims for professional services, such as physician’s evaluation and management (E/M) visits, amounted to 30 percent of the overpaid amount. Inpatient services, such as acute care hospital services, accounted for 56 percent of the overpayment amount, as these claims are much higher than the claims for professional services. These were followed by outpatient services at 11 percent of the total overpayment and all others at 3 percent.

You can read the full report to find out more about how the Centers for Medicare & Medicaid Services (CMS) overpaid in such circumstances.

Understand Provider and Supplier Responsibilities

Medicare pays first for patients who don’t have other primary insurance coverage.

There are certain situations when the patient has other coverage, but Medicare may pay first.

These circumstances include, but are not limited to:

1. The patient hasn’t met their primary payer deductible.
2. The insurer doesn’t cover the service.
3. The patient exhausted the other insurers’ benefits.

Warning: Providers, physicians, and other suppliers must collect accurate MSP information from the patient to ensure claims are filed properly.

Understand Provider and Supplier Responsibilities

There are three main obligations providers and suppliers need to know.

1. Obtain accurate MSP data by asking patients (or their representatives) about other (potential) health insurance coverage that could be primary to Medicare.

This must be done at each visit before providing services.

2. Check eligibility to verify other primary insurance information exists.

To prevent incorrect billing and overpayments, it’s important for providers to maintain an admissions process that identifies primary payers other than Medicare. Based on this requirement, providers and suppliers are required to document and maintain patient MSP data.

3. Identify all known primary payers on the Medicare claim and bill any primary payer before billing Medicare.

Submit MSP information on the claim using proper payment information, value codes, condition, occurrence codes, etc. If submitting an electronic claim, include the necessary MSP claims processing fields, loops, and segments.

Important: It’s imperative to know the correct payer order for proper billing.

Warning: If it takes time to figure out who pays first, don’t deny service — doing so is against Medicare laws and policies.

Smart idea: Review Medicare’s eligibility response for specifics. It can help determine the primary payer of services, but remember that the information can be inaccurate. Ultimately, you are responsible for properly determining MSP.

Best bet: In order to make the correct primary insurer determination, it’s important to get current and accurate patient health insurance coverage information during the registration or admissions process.

Patricia Zubritzky, BS, CRCE-I, Contributing Writer, Pittsburgh, Pennsylvania