David Donald stories from The Center for Public Integrity

Hospitals grab at least $1 billion in extra fees for emergency room visits

2013-01-23T12:40:21-05:00

Judging by their bills, it would appear that elderly patients treated in the emergency room at Baylor Medical Center in Irving, Texas, are among the sickest in the country — far sicker than patients at most other hospitals.

In 2008, the hospital billed Medicare for the two most expensive levels of care for eight of every 10 patients it treated and released from its emergency room — almost twice the national average, according to a Center for Public Integrity analysis. Among those claims, 64 percent of the total were for the most expensive level of care.

But the charges may have more to do with billing practices than sicker patients. A Baylor representative conceded hospital billing for emergency room care “did not align with industry trends,” but said that the hospital since 2009 has reined in its charges.

The Texas hospital’s billing pattern is far from unique. Between 2001 and 2008, hospitals across the country dramatically increased their Medicare billing for emergency room care, adding more than $1 billion to the cost of the program to taxpayers, a Center investigation has found. The fees are based on a system of billing codes — so-called evaluation and management codes — that makes higher payments for treatments that require more time and resources.

Use of the top two most expensive codes for emergency room care nationwide nearly doubled, from 25 percent to 45 percent of all claims, during the time period examined. In many cases, these claims were not for treating patients with life-threatening injuries. Instead, the claims the Center analyzed included only patients who were sent home from the emergency room without being admitted to the hospital. Often, they were treated for seemingly minor injuries and complaints.

While taxpayers footed most of the bill, the charges also hit elderly patients in the pocketbook, increasing the amount of their 20-percent co-payments for emergency room care.

Hospitals and federal officials say the rise has likely been caused by an increase in sicker patients seeking care in emergency rooms, more accurate billing on the part of hospitals, and an increasing number of options for patients who aren’t as sick — options that include retail-based clinics and urgent care facilities. But the Center’s investigation found that the surge in billing also reflects lax government oversight, confusion about proper billing standards, and widespread payment errors that have plagued Medicare for more than a decade. And the data suggest that some hospitals are working the billing system — and its flaws — to maximize payments.

Dr. Donald Berwick, the immediate past administrator of the Centers for Medicare and Medicaid Services (CMS), which administers the Medicare program, said a small portion of the billing increase is likely caused by outright fraud, but in the majority of cases hospitals are legally boosting profits by targeting the vulnerabilities of Medicare’s payment system. “They are learning how to play the game,” Berwick said about the hospitals.

Hospital industry insiders say it’s no secret that hospitals are pushing the limits to bill higher-priced Medicare codes, a practice known as upcoding. “There is such financial pressure to upcode,” said Barbara Vandegrift, a health care consultant at Tennessee-based Quorum Health Resources. “It’s ‘wait until we get caught and we’ll fight it at that point.’ ”

Few hospitals, however, are being scrutinized. Medicare officials are aware of the rising expense of emergency room billing for evaluation and management services, but the agency has downplayed the problem and done little to verify the accuracy of hospital emergency room charges. Instead, it has given hospitals a free hand to set their own billing policies, with little agency guidance and even less auditing.

Medicare lacks rules for hospital ER billing

Since 2000, hospitals have chosen among five codes to bill Medicare and other insurers for evaluating emergency room patients and coordinating their treatment. This hospital “facility fee,” which can add millions of dollars to the hospital’s bottom line in the course of a year, ranges from $50 to $324, depending on which code is chosen for any given case. It comes on top of physician charges.

The system dates back to a change in federal law requiring hospitals be paid a set fee for services, rather than a blanket payment based on the cost of providing care, which was meant to save the program money. Yet instead of developing specialized billing codes just for hospitals, CMS since 2000 has required hospitals to file claims using a set of codes developed and licensed for physician billing by the American Medical Association — so-called Current Procedural Terminology, or CPT, codes. The lack of specific hospital codes, or guidelines for how hospitals should use physician codes, has left the system open to broad interpretation by hospitals.

“All the hospitals looked at each other and said, ‘OK, how are we going to do this?’ To make a long story very short, we still have no guidelines,” said Duane Abbey, a hospital billing consultant in California.

Medicare administrators acknowledge as much. Since 2000, CMS has repeatedly announced plans to develop new hospital evaluation and management codes, or at least provide national guidelines for hospital billing. But the agency has failed to deliver. Instead, CMS requires hospitals to develop their own guidelines for billing those codes designed for doctors. Some follow strict internal policies, Abbey and other hospitals billing consultants said, while others wildly inflate charges, regularly change their billing criteria, and sometimes fail to follow even their own lax internal policies.

“The whole issue of the E and M levels for the emergency department … is an absolute mess,” Abbey said.

Chasing dollars

Left to develop their own billing rules, hospitals have flocked to higher paying emergency room codes. Leatrice Ford, an independent consultant in Louisville, Ky., who uses Medicare claims data to advise hospitals on their emergency room billing, said it’s well known in the industry that many hospitals inflate their charges. But Ford said it’s a tough sell for a consultant to convince hospitals their billing is too high. “In my experience hospitals are reluctant to give up their overpayments,” Ford said. The reason, she said, is that Medicare and the contractors it employs to administer payments are not checking.

“I have never once seen or heard of anyone being audited or called on the carpet for their distribution of E and M codes,” Ford said. “That’s a standard audit for physician practices, but I’ve never seen a hospital get in trouble for it.”

In 2008, more than 500 hospitals of the more than 2,400 in the database billed the two most expensive codes for more than 60 percent of patients. More than 100 billed the two most expensive codes for at least 70 percent of patients.

Some — like Baylor Medical Center in Irving — were even higher. In 2007, Yuma Regional Medical Center, a 369-bed nonprofit hospital in southwestern Arizona, billed the top two most expensive codes for eight of every 10 Medicare emergency room patients. Billing at the hospital made Yuma, Arizona, the nation’s regional leader for the percentage of billing of the top two levels of E and M codes, far higher than metropolitan areas like New York City and Chicago.

Yuma’s CEO Pat Walz, however, said the charges are accurate. When the Center first asked about the claims, Walz said elderly winter visitors have driven up the hospital’s number of serious emergency room cases. Yuma claims data reviewed by the Center for Public Integrity, however, suggest the average age of the hospital’s emergency room patients remained steady from 2001 to 2008 at around 77 years old.

Walz also conceded that the installation of Medhost, an electronic emergency department information system, was likely one of the most significant drivers of the hospital’s push toward more expensive codes. Before Medhost, nurses and doctors wrote patient notes by hand, Walz said. Computerized charting captured much more of the work they actually performed, which he said resulted in higher E and M levels.

But Walz said the electronic system is not overcharging Medicare. Rather, it is simply helping the hospital make money from care that once fell through the cracks. “If you look at any industry — as it goes from human to electronic input, the same thing is going to happen,” Walz said.

Walz said Medhost has paid for itself through increased billing, but he said the decision to install it was not financial. “We did it to improve the quality of patient care,” he said. Medhost did not respond to requests for comment.

CMS: hospital billing increase “slight”

The Centers for Medicare and Medicaid Services has so far downplayed the spike of hospital billing. In 2011 comments published in the Federal Register, CMS said it noticed a “slight shift” toward hospital billing of more expensive evaluation and management codes. The agency said it also noticed that emergency room charges for the higher-level visits “seem to be trending upward year over year.”

Presented with the Center’s analysis, which shows a far more dramatic shift toward expensive codes, CMS declined interview requests. But in written responses to questions, the agency’s press office said the trend is only “notable” over several years. Considered year to year, as the agency said it examined the data, the higher level codes increase at no more than 2 percent.

Further, the agency wrote that the trend may reflect more accurate coding by hospitals and physicians rather than upcoding. Indeed, the agency said its advisory panel, which is made up of physicians, hospital administrators and other hospital financial staff, told CMS that the rise in billing is a result of hospitals getting better at capturing their costs.

“They would argue that the costs were inadequately reflected in our data several years ago,” the agency wrote, “so the increases we are seeing now are bringing the payment system to where it should have been all along.”

Dr. Scott Manaker, a professor of medicine at the University of Pennsylvania Perelman School of Medicine, a member of the panel, said there are a number of possible causes for the rise in high-level billing, including more accurate hospital coding. Manaker said he doubts upcoding is the major cause, but said it’s impossible for the panel to determine without examining individual patient charts and hospital billing records, which it has not done.

Another panel member said hospital emergency room billing has not been a critical issue during meetings. “In my four years in the panel there has not been a lot of discussion of E and M leveling on the facility side,” said Judith Kelly, director of health information management at Unity Health System in Rochester, N.Y. To address the issue, Kelly said CMS should issue hospital-specific billing codes or guidelines for emergency care. “When there is ambiguity, there are problems,” she said.

In response to questions, CMS said some hospitals have been audited. But the agency said the process of auditing and seeking reimbursement of overpayment is “expensive and time consuming relative to the potential return that will be realized on individual claims for relatively low cost services.”

But some question whether CMS contractors — who help administer Medicare payments — can effectively audit hospital billing. Without national billing guidelines, said Abbey, the hospital auditor, it would be difficult for CMS contractors to determine who is cheating the system. Indeed, he said they would need first to ask each hospital for a copy of its internal billing guidelines. “They should have one of their famous committees developing guidelines right now,” Abbey said. “My sense is they aren’t, but they should be.”

A never-ending quest for billing guidelines

During the 12 years that CMS has allowed hospitals to set their own billing policies for E and M codes, a host of organizations have proposed national guidelines. So far, none of them have made the cut.

In 2002, the American Hospital Association (AHA) and the American Health Information Management Association, an association representing health information management professionals, formed an expert panel to develop guidelines for hospital emergency room billing at the urging of CMS. In 2003, the groups submitted detailed recommendations for a billing system that measured hospital emergency room care. The recommendations went nowhere. “It just died a slow death,” said William Briggs, a nurse who represented the Emergency Nurses Association on the expert panel.

CMS has called the AHA proposal the “most appropriate and well-developed guidelines” available. Yet the agency has not required hospitals to follow them. Not long after the AHA proposed the guidelines, a CMS-funded outside study found a number of problems with the guidelines.

A separate small-scale study, however, suggested the guidelines save money. In 2009, the Ohio-based company Permedion, which reviews medical claims for state and federal agencies, found that 37 percent of a sample of Ohio Medicaid emergency room claims should have been coded at lower levels, based on the AHA guidelines. The remainder were in agreement with the guidelines.

The AHA remains one of the loudest voices pushing for guidelines, but it is discouraged over the long delay. “We keep asking them to issue national guidelines,” said Nelly Leon-Chisen, the association’s director of coding and classification. “We do it every year and they don’t do anything about it.”

By 2007, though, it appears CMS had effectively given up on releasing new guidelines. The effort “was proving more challenging than we initially thought,” the agency wrote in the Federal Register.

Industry insiders say there are a number of reasons why the agency never established guidelines. Some suggested a working set of rules that accurately reflects costs for all hospitals may be impossible to develop. Others say CMS is reticent to sign off on an outside group’s system, as it has with the American Medical Association, which licenses the use of the CPT codes it owns and administers.

In written responses to questions submitted by the Center, CMS said “it seems unlikely that one set of straightforward national guidelines could apply to the reporting of visits in all hospitals and specialty clinics.” It also said the agency believes that “as a whole, hospitals have worked diligently and carefully to develop and implement their own internal guidelines that reflect the scope and type of services they provide.”

Asked about the hospital shift toward billing more expensive codes, Roslyne Schulman, the hospital association’s director of policy development, said she was unaware billing had risen at the rate revealed by the Center’s data analysis, and could only speculate on the reasons without comparing billing to patient charts. Asked if hospitals were simply billing for levels of care they did not provide, Schulman said, “I would hope that would not be an issue.”

Hospitals say patients are “sicker and older”

In 2008, Sentara Virginia Beach General Hospital, a 276-bed hospital a few miles from the Atlantic Ocean, billed the top two emergency room codes for 80 percent of all patients, up from about 29 percent in 2001. Hospital spokeswoman Amy Sandoval said the hospital since 2001 has used the electronic charge system Optum Lynx to determine evaluation and management billing levels.

In a written response to questions about the hospital’s billing, Sandoval said Optum reviewed the hospital’s billing and found it within acceptable limits. Sandoval said “possible” reasons for the high level of billing include an older and sicker patient population, the intensive resources required to treat psychiatric patients before transfer, and a trend of less sick patients seeking care outside of emergency rooms to avoid long waits and high co-pays. The hospital, she added, is a level III trauma center, located within a mile of seven assisted-living centers and nursing homes.

Representatives from small-town hospitals and major urban trauma centers generally offered the same justification for their rising charges. These explanations could be accurate for individual hospitals, but they are not borne out in the national Medicare billing data analyzed by the Center. The average age of emergency room patients in data examined by the Center was 77 and remained constant from 2001 to 2008. The total number of emergency room claims rose 31 percent during that time, however, as compared to a less than 10 percent increase in Medicare beneficiaries, which suggests urgent care clinics have not sapped overall business levels.

Some of the rise could be accounted for by emergency room care advances. In the eight years from 2001 to 2008, advances in medical care allowed emergency rooms to treat patients without later admitting them to the hospital. Since the Medicare data the Center for Public Integrity examined includes only treat-and-release patients, these sicker patients would be included in the data more often in 2008 than in 2001. But some experts strongly doubt this accounts for the extent of the rapid rise.

Moreover, the ten most common “primary diagnoses” — the chief complaints for why patients seek care in emergency rooms — remained unchanged during the time period of the data reviewed by the Center. Although those top diagnoses including dangerous symptoms like chest pain and loss of consciousness, the list also included seemingly minor complaints like lower-back discomfort, urinary tract infections and limb pain.

But while the most common diagnoses remained constant, billing of the most expensive codes surged. Take the case of emergency room headaches. From 2001 to 2008, hospital billing of the top two evaluation and management codes for headache patients more than doubled to 43 percent. The number of tests and procedures doctors performed on headache patients also rose. In 2001, hospital emergency rooms billed an average of six revenue codes (which represent areas of the hospital where costs occur, including imaging, labs, and supplies) for headache patients, according to Medicare billing data. In 2008, they billed an average of nine.

In addition to changes in standards of care over those eight years, hospitals say they simply are seeing sicker Medicare patients than in the past. But some disagree.

Berwick, the former CMS head, said patients haven’t changed. What’s changed is the aggressiveness of how hospitals bill. “They are smart,” Berwick said. “If you create a payment system in which there is a premium for increasing the number of things you do or the recording of what you do, well, that’s what you’ll get.”

Dr. Stephen Pitts, an emergency physician and associate professor in the Emory University School of Medicine, examined data from the Centers for Disease Control and Prevention’s National Hospital Ambulatory Medical Care Survey, a well-established nationally representative survey of emergency department visits. Pitts found that between 2001 and 2008 emergency patients did not appear to be getting sicker.

“It’s total nonsense,” Pitts said of hospital claims that sicker patients have led to higher charges.

Emergency physician billing also rises

A more likely cause, Pitts said, is the pressure hospitals put on emergency room physicians to bill every patient at the highest rates possible. Emergency room salaries at many hospitals are tied in part to how much profit doctors generate per patient, Pitts said. From the business side, this makes sense. “If you don’t bill maximally, your ER is going to die,” Pitts said. But from a patient perspective, it means doctors perform more tests and procedures than they did in the past, which increases the costs of care.

Although hospital facility charges are separate from physician charges, billing and coding experts say the two are linked. And like hospital charges, emergency room physician charges for evaluation and management services are soaring. In 2008, emergency room physicians billed the most expensive code for 44 percent of patients, up from 27 percent in 2001, according to Center analysis of Medicare claims data.

The cost associated with this rise is substantial. In 2010, the top level physical evaluation and management code for emergency care cost the program nearly $1.6 billion, up 21 percent form 2008.

Unlike hospital billing, CMS requires that physicians follow American Medical Association criteria for billing emergency room evaluation and management services. The top level code 99285, for example, requires doctors to perform a comprehensive medical history, a comprehensive exam and engage in highly complex medical decision making.

Yet a number of probes have found physicians are over-billing the top-level code. A 2012 probe of physician billing of 99285 in Iowa, Kansas, Missouri, and Nebraska found an error rate of almost 50 percent. The probe, performed by Medicare contractor Wisconsin Physicians Service Insurance Corporation, found that physician documentation did not support the 99285 level.

David McKenzie, the reimbursement director of the American College of Emergency Physicians, said upcoding is not to blame for the rise in physician charges. Emergency room doctors are simply getting better at documenting their work, and Medicare patients in general are getting sicker, McKenzie said. In addition, nurse practitioners and physician assistants are treating less sick patients who in the past would have been treated by doctors, which is skewing their numbers.

Evaluation and management of health care in seniors takes time, McKenzie said. “A broken leg in a 17-year-old football player is not the same as a broken leg in an 88-year-old diabetic.”

CMS says rise unlikely caused by upcoding

In written comments, CMS said upcoding is unlikely to account for the rapid rise in hospital emergency room billing since the trend appears “to be consistent across hospitals and physicians.” But billing at some hospitals is rising much faster than at others. Asked if the agency is monitoring hospitals, like Baylor Medical Center in Irving, Texas, with rates that were nearly twice the national average, CMS said it is inappropriate for the agency to discuss audits involving specific hospitals.

But Baylor Irving’s president, Cindy Schamp, said CMS never questioned the hospital’s 2008 evaluation and management code billing. In 2009, Schamp said, the hospital instituted new billing rules that led to fewer claims for the top two codes. She said the change was voluntary.

Asked if the hospital returned Medicare overpayments, Schamp said it has not. “To date, we have not made any payments back to Medicare,” Schamp wrote in response to questions. “However, continuing to work to do the right thing, we feel it is appropriate to review."

Four months later, a Baylor spokeswoman said the review was complete. “We looked at a sample set of (emergency room) charges made at Baylor Irving during that time period to see if they were accurate in the context of the billing guidelines at that time,” Nikki Mitchell wrote. “That is the appropriate way to review charges. In the review, no overcharges were found.”

Methodology for 'Cracking the Codes'

2012-09-15T17:00:01-04:00

For this series, the Center for Public Integrity and Palantir Technologies analyzed Medicare claims data obtained from the Centers for Medicare and Medicaid Services (CMS).

For privacy purposes and other reasons, the Center was limited to a 5 percent sample of national Medicare Part B data that contain claims for medical procedures, such as doctor office visits and emergency room procedures, and used mainly by researchers and consultants. Over and above the limitations of sampling, the data have only the quarter in which a procedure was performed, not actual dates. And a permanent federal injunction against the Department of Health and Human Services prevents data users from naming individual doctors who received payment for the claims. Some physicians subsequently contacted by the Center agreed to discuss their billing practices.

For the upcoding analysis, the Center and Palantir used a subset of the data submitted by physicians, hospitals and clinics from 1999 to 2008, the last year available at the time the data were acquired. The year 2002 was not included in the data, and any results for that year are imputed based on averaging 2001 and 2003 data. In addition, the Center and Palantir used CMS formulas for facility fees and co-payments, as CMS publishes formulas and modifier values to determine reimbursement amounts. Finally, Medicare Utilization reports published by CMS were used to look at specific billing codes for 2009 and 2010.

To calculate the possible taxpayer costs to upcoding, the Center and Palantir analyzed 14 sets of Current Procedure Terminology Evaluation and Management (E and M) codes published by the American Medical Association and used by most providers when filing their claims. Within each set are three to five billing codes requiring varying levels of Medicare reimbursement, based on the complexity of the treatment and the time spent by the doctor. We focused on a set of 84 million claims from office visits for established patients and five million emergency department visits in which E and M codes were billed, as well as 12 other E and M categories. Denied claims were excluded from the analysis.

From those data subsets, we calculated costs from 2001 through 2008 for each code and compared trends within each of the 14 E and M groups. Data from 2009 and 2010 for some E and M code groups were added from the utilization reports. Using 2001 as a baseline, a percentage for each code from the total billing in each group was calculated, giving a decade-long trend line for a code in comparison with the other codes in its group. Then the 2001 ratio was applied to each subsequent year and dollar amounts adjusted for inflation. This allowed for comparisons of the actual trends to hypothetical trends if 2001 ratios had remained constant. The difference between the actual inflation-adjusted dollar amounts and the 2001-based projected dollar amounts were summed.

To look at trends in age among Medicare patients, the age at the time of a claim was averaged over geography, hospital or E and M code as needed. The CMS data only provided age ranges — under 65, 65-69, 70-74, 75-79, 80-84, and over 85 — in order to protect patient privacy. The under-65 age group typically represents exceptionally sick individuals with end-stage renal disease and was excluded from the analysis; the median values of the remaining age buckets (67, 72, 77, 82, and 87 for those over 85) were used to calculate the average age.

A geographical analysis revealed the nationwide trend of higher E and M billing. Claims were grouped by county and state, according to the beneficiary’s residence and visualized with heat maps to show geospatial and temporal trends of billing codes. A heat scale was applied with light red indicating a low percentage and a dark red indicating a high percentage of claims billed at the highest two codes for office visits emergency department visits.

In addition to the nationwide trends, hospitals, physicians, and counties with especially high rates of billing for the most expensive codes were examined in detail. E and M claims were aggregated by hospital, physician, or county, excluding those buckets that fell below a threshold for the minimum number of claims per year (50 claims per year for physicians, 100 for counties, and 100 for hospitals). Physicians who billed 50 percent, 75 percent, 90 percent, or 100 percent of claims at the highest two codes for a given year were analyzed for patterns of geography and specialty. Billing information was integrated with hospital affiliation, ownership, and electronic health-record use information to analyze patterns of billing within group practices and hospital chains.

Results from the 5 percent sample were multiplied by 20 to give a national scope to analyzed trends, an accepted survey research technique. However, even with a sample this large, it is impossible to account for all types of errors in the data. This means all calculations are estimates and rounded and must be considered imprecise. The Center and Palantir used accepted rounding practices. For analysis about specific doctors and some of their coding practices — not billing totals — sums were not multiplied by 20 and reported only as in the sample. When faced with a potential range of costs, we chose the smallest amount to keep estimates conservative. And dollar amounts were adjusted for inflation to prevent over-estimation so that the rising costs were indexed to 2001, the base year in the analysis.

How doctors and hospitals have collected billions in questionable Medicare fees

2013-02-13T17:55:11-05:00

Thousands of doctors and other medical professionals have steadily billed higher rates for treating elderly patients on Medicare over the last decade — adding $11 billion or more to their fees and signaling a possible rise in medical billing abuse, an investigation by the Center for Public Integrity has found.

Medical groups argue that the fee hikes are justified because treating seniors has grown more complex and time-consuming, both due to new technology and declining health status. The rise in fees may also be a reaction, they say, to years of under-charging, and reflect more accurate billing. The fees are based on a system of billing codes that is structured to make higher payments for treatments that take more time and effort.

But the Center’s analysis of Medicare claims from 2001 through 2010 shows that over time, thousands of providers turned to more expensive Medicare billing codes, while spurning use of cheaper ones. They did so despite little evidence that Medicare patients as a whole are older or sicker than in past years, or that the amount of time doctors spent treating them on average was rising.

While it’s impossible to know precisely why doctors and hospitals moved to better-paying codes in recent years, it’s likely that the trend in part reflects “upcoding,” — the practice of charging for more extensive and costly services than delivered, according to Medicare experts, analysis of the data and a review of government audits.

And Medicare regulators worry that the coding levels may be accelerating in part because of increased use of electronic health records, which make it easy to create detailed patient files with just a few mouse clicks.

Many health policy experts have long believed that billing errors and abuses, from confusion over how to pick proper payment codes to outright overcharges, are common in Medicare. But the Center’s year-long examination has outlined their scope in an unprecedented manner, uncovering a range of costly medical coding mistakes and abuses that have plagued the government-paid health care plan for years and are worsening amid lax federal oversight.

“This is an urgent problem,” said Dr. Mark McClellan, who directs the Engelberg Center for Health Care Reform at the Brookings Institution in Washington. McClellan, a former director of the Centers for Medicare and Medicaid Services, or CMS, said the agency must send a message that it “won’t stand by and do nothing … that they are paying attention to this.”

Among the investigation’s key findings:

Doctors steadily billed Medicare for longer and more complex office visits between 2001 and the end of the decade even though there’s little hard evidence they spent more time with patients or that their patients were sicker and required more complicated — and time-consuming — care. The higher codes for routine office visits alone cost taxpayers an estimated $6.6 billion over the decade.
More than 7,500 physicians billed the two top paying codes for three out of four office visits in 2008, a sharp rise from the numbers of doctors who did so at the start of the decade. Officials said such changes in billing can signal overcharges occurring on a broad scale. Medical groups deny that.
The most lucrative codes are billed two to three times more often in some cities than in others, costly variations government officials said they could not explain or justify. In some instances, higher billing rates appear to be associated with the burgeoning use of electronic medical records and billing software.
Medicare administrators have struggled for more than a decade to crack down on medical coding errors and abuses, often in the face of opposition from medical groups including the American Medical Association, which helped design, and now controls the codes. Whether they make honest mistakes or engage in willful misconduct, there’s little chance doctors who pad their charges will face any serious penalties.

CMS officials declined numerous interview requests. However, in an e-mail response to written questions, officials said while they believe most doctors and hospitals are “honest and try to bill Medicare correctly,” the agency also “is keenly aware that certain Medicare providers and suppliers seek to defraud the program.”

Dr. Robert Berenson, a former vice chairman of a federal commission that recommends Medicare payment strategies to Congress, called the Center’s findings “clearly significant,” and said they indicate an urgent need to revamp the pay scales.

“It is really time to deal with this issue. There are so many perverse outcomes, including spending for taxpayers,” Berenson said.

That so many doctors deviate widely from billing norms — and have done so for years with apparent impunity — spotlights Medicare’s chronic vulnerability to abuse and fraud, several experts said.

Thomas Scully, an architect of the Medicare pay scales during his White House days under the first President Bush, is now critical of the system. He said it was put in place in order to curb rising doctors’ fees, but Medicare’s pay hikes have been too small to match rising medical office expenses. Many doctors have responded by picking the highest codes possible, he said.

“You are going to pedal faster and code more aggressively,” said Scully, also a former director of the federal Medicare agency and now a Washington lobbyist with a range of health care clients. “I’m not sure it’s malicious. It’s a fact a life,” he said.

However, the U.S. Department of Health and Human Services inspector general in a May report stated that payments made under the doctor-visit codes rose 48 per cent between 2001 and 2010, from $22.7 billion to $33.5 billion. The report also noted that the coding system has been “vulnerable to fraud and abuse.”

And agency officials acknowledge that the surge in these billings has been driven at least partly by potentially illegal “upcoding” which the government has largely failed to stamp out through the years.

“We have some people who will use any excuse to get more money for the services they do,” said Jennifer Trussell, who heads the investigations unit for the HHS inspector general’s office. “They don’t see it as a crime.”

AMA president Jeremy A. Lazarus agreed that doctors have shifted toward billing higher priced codes. But the “contributing factors are unclear,” he said in a written statement. “There could be several possible reasons for this trend, but more analysis is needed,” Lazarus said.

Secret Code

The current billing scales, known as Evaluation and Management codes, were unveiled in 1992 as part of an unusual and secretive arrangement between Medicare officials and the AMA, the nation’s most influential doctors’ group.

The AMA wanted Medicare to reward doctors for the “thinking part” of medicine, or their skill in diagnosing and treating illness, as well as the time it takes. Medicare expected the pay scales to cut down on billing abuses and to save taxpayers money by setting measurable standards that all doctors would follow.

On paper, the process seems straightforward enough: the lowest of the five coding levels for an office visit, 99211, signifies a minimal health problem and five minutes either spent treating the patient or supervising a nurse or other health worker who does so.

That simple visit pays the doctor about $20 from Medicare.

The top code, 99215, requires much more effort. Doctors must do two of three things: a comprehensive examination, a detailed history of the patient’s health status, or make a medical decision of “high complexity.”

That typically requires 40 minutes of face-to-face contact between doctor and patient and pays about $140.

Medicare officials expect medical professionals to bill a range of the five fee codes because some patients require more time and effort to treat than others. The government trusts them to bill correctly and medical groups say the vast majority of America’s physicians follow the complex coding rules as best they can. Medicare pays for more than 200 million office visits each year.

However, doctors and hospitals have increasingly abandoned the lower-level codes for better paying ones. Medicare officials have largely failed to challenge these surges in billing across a broad spectrum of medicine, from doctors working in hospital emergency departments and nursing homes to family physicians and specialists seeing patients in their offices.

Government officials and medical data experts note that sharp spikes in billing strongly suggest some doctors and hospitals engage in “upcoding,” by finding ways to bill for higher codes than justified.

Medical groups counter that most doctors charge less than they deserve. The only way to tell for sure is to review patient records that support each of the 370 million such claims Medicare pays annually, which officials say is impractical and not cost-effective.

Physician groups don’t dispute that coding errors are commonplace in medicine or that a tiny fraction of doctors may exploit loose federal oversight to fatten up their fees.

But they argue that coding guidelines are vague and subjective and that just as many doctors undervalue their work by picking lower codes as might be tempted to bill too much.

The medical organizations also argue that more elderly patients over the past decade have been diagnosed with multiple health problems that require additional time and effort to treat, a contention undercut by much health care research.

And they cite growing use of computerized medical records and billing systems for enabling doctors to document the level of treatment they provide more easily than by hand, which pays off in higher codes. Federal officials are spending as much as $30 billion in economic stimulus money to help doctors and hospitals purchase the digital gear, and more than half the doctors billing Medicare are using it, with more expected to follow.

Dr. Thomas Weida, a family physician in Hershey, Pa., said that wiring up his office has boosted the amount of time spent face-to-face with a typical patient by five minutes or more, both from the amount of stored information he reviews and increased time writing and prescribing treatments. That alone could justify higher billing codes in many instances, he said.

“You’re having to do a lot more than you did before,” said Weida, a medical coding expert for the American Academy of Family Physicians.

But digital systems also can prompt doctors to “code at the highest possible level,” said Dr. David Kibbe, who has consulted with the family physicians’ group. Often, that means that with “the push of a button” doctors can create reams of documentation to support higher codes, Kibbe said.

Some doctors identified by the Center’s data analysis as disproportionately billing high codes for office visits cited the poor health condition of their patients as a key justification for doing so.

“I know they are high,” said Dr. Brantley B. Pace, who has practiced family medicine for more than a half century in Monticello, Miss., when asked about his billing practices, among the highest in the Medicare billing sample.

Pace said many of his longtime patients live with multiple infirmities that require his attention. “I rarely have a person who comes to me for a cold,” he said.

Data experts noted that some individual doctors may in fact be justified in billing much higher than their peers. But they stressed that the sheer numbers of physicians from a range of medical specialties who do suggests some degree of manipulation of the payment scales.

Billing Norms

The Center for Public Integrity analyzed a representative 5 percent sample of Medicare patients and their claims submitted by more than 400,000 medical practitioners and 7,000 hospitals and clinics, starting in 2001. The cost analysis projected the increase in Medicare costs as more doctors picked higher codes each year over the decade.

The added fees totaled at least $11 billion, adjusted for inflation — more than half of it from higher doctor fees for office visits and the rest from other services, including treatment in nursing homes and hospitals.

The investigation identified thousands of doctors, from a broad range of specialties and locales, who adjusted their billing patterns sharply upward and netted higher fees as a result. A 1979 federal court injunction in Florida bars HHS from publicly releasing doctors’ names and Medicare reimbursements.

The Center sued HHS to obtain the Medicare data but had to agree not to publish the names of individual doctors, unless they agreed to discuss their billing histories. Most who were contacted declined to do so.

From 1999 through 2008, the number of doctors who billed at least half of their office visits at one of the two most expensive codes more than doubled to at least 17,000 practitioners. Those who quit using the two least expensive codes rose 63 percent, climbing to more than 13,000 in 2008.

“Those are codes we see abused quite frequently,” said Trussell, of the HHS inspector general’s office.

In 2010 alone, Medicare paid for more than six million more visits at the second highest pay rate than the year before. That upsurge cost Medicare more than $1 billion, government records show.

Some doctors relied on the same code for nearly every patient visit despite Medicare guidelines calling for a balance because not all patients who see the doctor require the same degree of attention or time.

More than 750 doctors billed the two highest-paying codes exclusively for office visits, some for as long as seven years straight, for instance.

The changes in billing patterns vary sharply by region. For instance the Milwaukee area saw a steep jump in use of the two highest codes, from 19 percent at the start of the decade to 45 percent in 2008. The Phoenix and Salt Lake City areas also saw hefty jumps. By contrast, some major urban areas, including New York City and Los Angeles, decreased slightly over the decade.

Medicare has been paying for longer and more complex office visits despite annual surveys by the federal Centers for Disease Control and Prevention showing that the average time doctors spent with patients didn’t change much over the years.

Jerry Cromwell, a researcher with RTI International in North Carolina, in a 2006 study found the average Medicare doctor visit lasted about 18 minutes, or less. Yet Medicare billing records show a sharp rise in services over the decade that were supposed to take 25 minutes or longer in face-to-face contact with a patient.

Cromwell said it has been a “real challenge” for Medicare officials to verify how much time doctors typically spend with patients. He identified “upcoding” as one possible explanation for the discrepancy.

The Medicare billing data do not show that patients are getting more infirm; their reasons for visiting the doctor’s office were essentially unchanged over the decade. And the May report by the HHS inspector general said its review of 2010 Medicare claims found that many high-end billers tended to treat patients who were slightly younger than average.

Researchers also said there’s not much evidence that elderly people on Medicare have been getting sicker over time — certainly not enough to justify the sharp rise in more costly billings.

Eric Seiber, an Ohio State University researcher who has studied physician billing trends, said Medicare officials have yet to conduct studies to determine to what extent the pay scales are being manipulated.

“There is a lot of money there and we have almost no handle on it. It’s so hard to pin down,” Seiber said.

The Medicare billing data also lend little support to the argument that many doctors on average choose codes that are too low. In 2008, three times as many physicians were billing only the two top codes as picked the two lowest ones, for instance.

In addition, federal officials projected that Medicare overpaid nearly $658 million in 2010 as a result of wrongly coded bills for office visits at the second most expensive payment level. Officials found underpayments to be a tiny fraction of that amount, or about $6.1 million, according to government records.

Malcolm Sparrow, a health care fraud expert and professor at the John F. Kennedy School of Government at Harvard University, said: “If there are changes [in billing] over time costing the public billions of dollars, there should be an explanation.”

Coding Errors

Medicare manuals state that the government trusts doctors to bill accurately and pays bills “generally based solely on your representations” in the claim.

“When you submit a claim for services performed for a Medicare [patient], you are filing a bill with the federal government and certifying that you have earned the payment requested and complied with the billing requirements,” the manual reads.

Yet Medicare auditors through the years have repeatedly detailed high rates of doctor billing errors, though mostly in obscure audits which captured little public notice and spurred little government action.

In June 2000, Medicare officials identified incorrect coding as Medicare’s third most prominent error, triggering $1.7 billion in suspect payments. Much of the time, errors paid doctors too much, not too little.

“These improper payments, as in past years, could range from inadvertent mistakes to outright fraud and abuse. We cannot quantify what portion of the error rate is attributable to fraud,” auditors wrote.

In 2001, members of a government panel were so fed up with the payment scales that they recommended junking them. Two years later, Congress passed Medicare reform legislation that called for studies to consider alternatives to the pay scales.

But the law required Medicare officials to consult physicians’ groups before making any changes, a legacy of the decision to allow the AMA to develop the codes. Medical groups have since been able to block any reform effort, according to former government official Scully and other insiders.

Scully said it was a “big mistake” for the government to give the AMA such a prominent role in creating the doctor payment yardstick. “As a result the AMA has amassed enormous power,” he said.

Medicare officials deny the AMA and other medical groups have outsized influence over the payment system. But they concede that the system has been left in place for years because they could not reach an agreement on ways to improve it.

Most patients have no idea doctor pay scales exist because Medicare and other insurers don’t typically help people decipher them. As owner of the copyrights on the codes and their definitions, the AMA controls their publication and aggressively enforces its copyright.

Princeton University Professor Uwe E. Reinhardt, a prominent health care economist, said government officials could have paid the AMA a lump sum to develop the codes, simplified them and retained their ownership for taxpayers. Doing so would have opened up the process to public scrutiny and given patients a better understanding of health care finances. Other critics note that millions of seniors might help the government check on the veracity of medical bills if they knew the lingo and how to crack the codes.

“I wish I had some way to check up on the billing process,” said Judy Ryden, a retired community college teacher who is on Medicare and lives in Grants Pass, Ore. “Unless I had a degree in medical coding I have no idea what all that means. I can’t tell whether a charge is legitimate or not,” she said.

AMA president Lazarus in his statement noted that while the AMA provides “guidance for the appropriate use” of billing codes, it “does not profit in any way if physicians bill an insurer for a complex service rather than a simple service.”

Lazarus noted that the group “does not receive a single taxpayer dime” for its oversight of the codes. He said the system “saves taxpayers millions of dollars” by allowing medical information to be communicated efficiently and reliably.”

Without the system, “the transfer of vital information between physicians, hospitals and health plans would break down under an even greater burden of costly paperwork,” Lazarus said.

The payment system also has given rise to a cottage industry of coding experts and medical practice consultants who conduct seminars for doctors that often encourage higher coding — in some cases through Internet pitches that promise doctors significantly higher profits.

Medical organizations also teach their members ways to code at higher levels legitimately. In one 2009 article, the academy of family physicians noted that using the second-highest level for most office visits could put an additional $30,000 to $75,000 in a doctor’s pocket.

As a result, the billing codes intended to hold medical fees in check have instead contributed to spiraling Medicare costs.

Error Prone

Today, startlingly high rates of billing mistakes — many of them overcharges — persist, according to Medicare audits conducted in several states.

In May 2011, Medicare contractor Palmetto GBA notified more than 11,000 California doctors that it would begin auditing their claims for office visits after concluding that too many were being billed at high-level codes.

Another Medicare contractor called Trailblazer audited patient office visits in early 2010 in Virginia and found mistakes in half the records it reviewed. A similar audit in Colorado, New Mexico, Oklahoma and Texas reported a 91% error rate for billing for office visits.

Billy Quarles, a spokesman for BlueCross BlueShield of South Carolina, which owns both companies, said “inadequate documentation” was the primary reason for the high denial rates in the Trailblazer audit.

“In some cases the documentation available did not support the level of service billed, but more often, the documentation was not sufficient to determine medical necessity or evidence of a face-to-face encounter with the patient,” Quarles said.

A third Medicare contractor, WPS Medicare, conducted a similar review of doctors in Wisconsin, Illinois, Michigan and Minnesota after discovering unusually high levels of the second highest code, most of them coding errors on routine patient visits.

In both cases, the audits focused on family practice doctors and specialists in internal medicine. Doctors who failed to respond could face denials of their claims.

“Upcoding”

Deliberately inflating bills to boost profits can constitute health care fraud, but few offenders face any liability.

And chances of getting caught are very small because Medicare rarely audits closely and typically has no way of finding out unless someone on the inside comes forward and alerts them. Federal officials have recently stepped up efforts to use computers to detect abnormal billing patterns, however.

Many of the more than 50 “upcoding” court cases reviewed by the Center for Public Integrity resulted from whistleblower lawsuits, often filed by an employee who fears retribution after alerting superiors to the billing problems. They can share in money the government recoups, and most cases are settled with no admission of wrongdoing.

Minnesota family doctor David Lang offers an example. He sued his employer, the Apple Valley Medical Clinic in suburban Minneapolis, as a whistleblower after concluding that some of the 14 doctors working there were upcoding Medicare claims.

He also took his findings to federal officials, who joined the civil case.

In his suit, Lang said that when he brought up some “extraordinarily high” doctor billings to the clinic’s board, he faced threats and retaliation.

For instance, he said he was accused of seeing patients with “alcohol on his breath,” an allegation Lang refuted by demanding a test, which showed no liquor in his body, according to court filings.

The Apple Valley clinic’s managers denied wrongdoing, though they settled the suit by paying the government more than $180,000 in December 2010. The clinic did not respond to requests for comment. But Lang, a partner in the clinic, says it now bills properly.

“We’ve cleaned it up,” he said.

Lang said in an interview that he believes billing irregularities are “prevalent” in medical offices. He said some doctors overbill “consciously and without remorse,” while others may regard inflating a few service codes as a relatively harmless way to help defray rising office expenses — or to silently protest what they regard as stingy pay from Medicare.

According to Lang, Medicare officials should publicize these cases widely to limit what he called “robbing from the public.”

But that seldom happens.

Like many others, Lang’s lawsuit file was sealed by a federal court judge with only his initial allegations made public.

Even criminal prosecutions conducted in open court may not bring a significant penalty. Several criminal cases reviewed were settled with a plea bargain that not only kept the doctor out of jail, but also let him continue participating in Medicare.

Billing administrator Lynne Lewis helped trigger such a case after concluding that her boss, Massachusetts pain specialist Dr. Anil Kumar, was “upcoding” some bills.

When she confronted Kumar about his billing tactics, he testily told her that he did business that way “long before you came,” and would do so “while you are here” and “long after you are gone,” according to her lawsuit.

The tongue lashing didn’t deter Lewis. She filed a whistleblower lawsuit against the doctor and federal authorities charged Kumar with health care fraud.

Prosecutors accused Kumar of fraudulently billing every new patient visit as if it were a consultation referred by another doctor. At the time, Medicare paid more for consultations than for simple office visits.

In June 2010, Kumar agreed to pay the government $586,000 in a settlement deal in which he did not admit any wrongdoing. He still practices in Stoneham, Mass., and is in good standing with Medicare. He had no comment.

Growing Tensions

Though the Obama administration has made a significant commitment to cracking down on Medicare fraud and abuse, officials don’t appear to have an aggressive strategy for cutting down on medical coding abuses.

CMS acting Administrator Marilyn Tavenner earlier this year confirmed that the agency planned to contact as many as 5,000 doctors it identified as billing outside norms, but said the effort was “not intended to be punitive or sent as an indication of fraud.”

She said the agency would focus on the top ten high billers in each Medicare region as a first step, but that it might cost the agency more to investigate suspicious claims than it could collect.

The agency, Tavenner wrote in a letter published in the May IG report, “must take into account the respective return on investment of medical review activities.”

It is clear that CMS is meeting resistance to fraud-control audits from doctors’ groups — and threats that some physicians might dump Medicare patients if the government doesn’t back off.

In December of 2011, California Medical Association president Dr. James T. Hay fired off a letter to federal officials in Washington noting that audits of doctor billings have “created great consternation” among the state’s doctors and saddled them with what he deemed an “enormous administrative burden” on their office staffs.

“Clearly, physicians want their purposefully overbilling and illegally behaving peers to be found and stopped. We also want to be paid fairly,” Hay later wrote in a CMA publication.

Hay added a threat that targeting doctors for review unfairly “will only further induce physicians to decrease or stop their participation in the Medicare program.”

Asked about the controversy, Medicare officials said they didn’t believe the limited number of proposed audits would lead doctors to dump Medicare patients. Officials said they had responded to the letter by “conducting a telephone conference and additional discussions with [Medicare payment contractor] Palmetto,” but declined to offer details.

These sorts of clashes are likely to become more common. Several provisions in the health care reform law step up penalties for doctors and hospitals who fail to return any overpayments within 60 days, for instance.

In draft regulations, Medicare officials predicted the new policies would result in about 125,000 medical providers returning from three to five overpayments each during a typical year.

Many experts also predict an even sharper clash lies ahead over electronic health records, which Medicare officials are pushing doctors and hospitals to purchase, and also are widely marketed for their power to document higher billing codes — and thus boost the bottom line. More than half of doctors billing Medicare used the devices in 2011, and more are expected to do so.

Reinhardt, the health economist, said that government must be cautious to pay health professionals properly for their work, and that under the current coding system, fees often are too low, which in turn encourages higher coding.

“If it is a dishonest payment system, doctors will be dishonest,” Reinhardt said.

Methodology

2011-11-07T05:06:01-05:00

The Poisoned Places series relied on analysis of four datasets relating to sources of air pollution regulated by the U.S. Environmental Protection Agency: the Clean Air Act watch list, the Air Facility System (AFS), the Toxics Release Inventory (TRI) and the Risk Screening Environmental Indicators model (RSEI).

The Clean Air Act watch list

The Center for Public Integrity’s iWatch News and NPR obtained the “watch list” through a Freedom of Information Act request to the EPA. Two versions of the list were obtained: one current as of July 2011, the other as of September 2011.

While these facilities are regulated by the states and the EPA, not all facilities report to the EPA’s Toxics Release Inventory (TRI); certain criteria must be met.

Further research indicated that two of these facilities are under construction, two are temporarily closed and nine are permanently closed. Additionally, not all were flagged in the data as high priority violators (HPVs) as of August 2011. iWatch News and NPR placed watch list facilities into industry categories and used the primary four-digit Standard Industrial Code; data entry for the more current North American Industry Code System was not as consistent.

The Air Facility System

AFS tracks permit, enforcement and compliance information for sources of air pollution. All major sources and some minor sources are required under the Clean Air Act to obtain operating permits that stipulate what they must do to control air pollution. The data contain information about inspections, enforcement actions, penalties and compliance, including HPV status. The HPV flag is activated when a facility has a high priority violation, as defined by criteria established in a 1998 EPA memo. It is deactivated when the violation is fully resolved. In some cases an HPV flag can remain after a violation has been resolved.

State or local agencies are required to report data to the EPA on a regular basis. However, because of some technical complications or lack of diligence, data are not always entered in a timely manner. Therefore the data do not always present a complete picture of enforcement or compliance for a particular facility. States’ comments on data inaccuracies can be found on the EPA’s website.

iWatch News and NPR downloaded AFS data from the EPA Web site in October, and the data are current as of August 2011. To compensate for incomplete data, iWatch News and NPR contacted multiple state and local agencies, EPA regional offices and the national office in Washington, D.C., to try to corroborate information gleaned from AFS.

iWatch News also obtained a detailed subset of the AFS database through the Freedom of Information Act. It details the steps regulators have taken to address concerns involving what the agency considers "high priority violators" across the country.

The Toxics Release Inventory

The TRI, authorized under the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA), houses emissions data reported yearly by polluting facilities. More than 20,000 facilities reported emissions of some 600 chemicals in 2009, including most of the 187 hazardous air pollutants that the EPA is required to control, as defined in the 1990 amendments to the Clean Air Act.

Not all toxic chemicals or sources of pollution are included in the TRI, however. Smaller sources (such as dry cleaners and gas stations) and mobile sources are not required to report. Only facilities in certain industry sectors, with a minimum level of production and number of employees, must report each year.

In addition, some quantities reported are estimated rather than monitored, and facilities use different estimation methodologies that could result in slightly different amounts. It is widely acknowledged that the TRI also contains some reporting errors, and in some instances facilities underreport.

The EPA also notes that no health risk conclusions can be drawn from the TRI alone, since there is no information on toxicity or distribution of chemicals.

iWatch News and NPR analyzed the most recent complete version of data through 2009. Only fugitive and stack (on-site) air releases were considered when analyzing emissions. Completed 2010 reports became available from the EPA 11 days before publication — after iWatch News and NPR finished their analysis. iWatch News and NPR plan to use the 2010 data as the series continues.

The Risk Screening Environmental Indicators

RSEI was created by the EPA to assess chronic human health risks from chemical releases reported in the TRI. For each release, the model takes into account the toxicity of the chemical, its fate and transport through the environment, the exposure pathway (air or water) and the number of people potentially affected. The model produces a relative risk score for each release. The latest version of the model (version 2.3.0) is based on the 2007 version of the TRI.

The screening model does not produce a measurement of actual risk, nor does it address acute (or immediate) risk from toxic air releases. It produces relative results for comparison, and its primary use is for identifying chemicals, industries or localities that require further investigation.

The model makes some necessary assumptions that should be considered when looking at its risk scores. Chemicals are assigned toxicity weights, but in some cases where chemicals are grouped together, the entire group is assigned the toxicity of its most toxic member. Also, if some facility information (such as stack height) is unavailable, the model will plug in alternate information (such as the national median stack height).

Since the model is based on TRI reports, it is subject to the same caveats. If a facility reported incorrectly in 2007 and later amended the report, the incorrect quantity will be reflected in the RSEI score, which was calculated using the 2007 version of the TRI.

For the interactive map, iWatch News and NPR used the latest version of RSEI to place facilities in one of five risk categories. Before doing this, several RSEI experts were consulted, both inside and outside of the EPA. To place the facilities in a risk category, iWatch News and NPR first averaged the risk screening scores associated with the facilities over the five-year period, from 2003 to 2007 (the latest year of data available).

Because the initial analysis revealed the distribution of those averages to be skewed, iWatch News and NPR applied a Log10 data transformation to place the data in a normal distribution. Once transformed, the data were grouped into five categories based on the transformed quantities, from lowest to highest.

Research methodology

2011-10-07T04:18:01-04:00

The Center analyzed Medicare claims data obtained from the Centers for Medicare and Medicaid Services (CMS). For the analysis on the four cancer screening tests, the Center used a subset of the data submitted by physicians, hospitals and clinics from 2003 to 2008, the last year available at the time the data were acquired. Denied claims were excluded.

For privacy purposes and other reasons, the Center was limited to a 5 percent sample of national Medicare Part B data that contain claims for medical procedures, such as routine screenings, and used mainly by researchers and consultants. Besides limitations of sampling, the data have only the quarter in which a procedure was performed, not actual dates. And a permanent federal injunction prevents naming individual doctors who received payment for the claims.

The analysis of Medicare claims for prostate, cervical, colon and breast cancer screenings was based on procedure codes obtained from documents and guidelines put out by CMS and the U.S. Preventive Services Task Force, a panel of medical experts. Some codes were also confirmed by professionals in the field.

The codes represent a number of different procedures for each type of cancer screening. Colon cancer screenings include screening colonoscopies, sigmoidoscopies, barium enemas and fecal occult blood tests. Cervical cancer screenings include both Papanicolaou smears and liquid-based cytology. Breast cancer screenings include both film and digital mammograms, and prostate cancer screenings include digital rectal exams as well as prostate-specific antigen tests.

The Preventive Services Task Force notes that high risk patients over 65 are excluded from its recommendation against getting routine cervical cancer screenings. After consulting with doctors and available documentation from CMS, we excluded any cervical cancer screening claims for which the high risk code ‘V1589’ was included in the diagnosis.

The Center relied on the number of claims billed to indicate trends and frequency for the corresponding test. However, a claim cannot be equated with a procedure. Certain procedures can be billed in multiple claims. This likely results in a higher number of claims than procedures, making it difficult if not impossible to calculate cost per procedure.

To protect patients’ identities, some information, such as the date of a claim, was removed from the data, making it impossible to isolate procedures.

The overall price for each test included the payments Medicare made to physicians, hospitals, clinics and laboratories. According to CMS’s Research Data Assistance Center (ResDAC), some claims (about 5 percent of the claims analyzed) incorrectly include a small amount of interest on the first line of payment. Therefore the payment amounts, like all else in the data, cannot be considered exact.

For the total mammography cost, the Center included the amount of money Medicare paid for computer-aided detection (CAD), an optional add-on that highlights for radiologists areas on a screening image that may contain tumors.