Medicare paid for more than 200 million office visits for established patients in 2012. Overall, health professionals classified only 4 percent as complex enough to command the most expensive rates. But 1,800 providers billed at the top level at least 90 percent of the time, a ProPublica analysis found. Experts question whether the charges are legitimate.

by Charles Ornstein and Ryann Grochowski Jones ProPublica, May 15, 2014, 11:45 a.m.

Office visits are the bread and butter of many physicians’ practices. Medicare pays for more than 200 million of them a year, often to deal with routine problems like colds or high blood pressure. Most require relatively modest amounts of a doctor’s time or medical know-how.

Not so for Michigan obstetrician-gynecologist Obioma Agomuoh. He charged for the most complex — and expensive — office visits for virtually every one of his 201 Medicare patients in 2012, his billings show. In fact, Medicare paid Agomuoh for an average of eight such visits per patient that year, a staggering number compared with his peers.

Doctors and other health providers nationwide charged the top rate in 2012 for just 4 percent of office visits for patients they had seen before. But Agomuoh was one of more than 1,800 health professionals nationwide who billed Medicare for the most expensive type of office visits at least 90 percent of the time that year, a ProPublica analysis of newly released Medicare data found.

Dr. John Im, who runs a Florida urgent care center, charged the program at that level for all 2,376 visits by his established patients. Kaveh Farhoomand, an Oceanside, California, internist facing disciplinary charges from his state medical board, collected the highest rate to see almost all of his 301 Medicare patients an average of seven times each.

By exposing such massive variations in how doctors bill the nation’s health program for seniors and the disabled, experts said, ProPublica’s analysis shows Medicare could—and should—be doing far more to use its own data to sniff out cost-inflating errors and fraud.

“I think this is a smoking gun,” said Dr. Robert Berenson, a former senior Medicare official who is now a fellow at the Urban Institute, a Washington, D.C., think tank. “Who’s asleep at the switch here?”

The Centers for Medicare and Medicaid Services, which runs Medicare, declined an interview request and said in a statement that it could not comment on ProPublica’s analysis because it had not seen it.

“CMS is working to ensure that physicians and health care providers appropriately bill” for office visits, part of a category known as evaluation and management (E&M) services, the agency said. “Some providers have sicker patients, thus are more likely to bill at E&M coding levels that carry higher payments. Every day we work with providers to make patient care the priority, and at the same time ensure they use E&M codes that reflect the level of service provided.”

The agency also said “it would be highly unusual for a provider to knowingly use the highest E&M billing code for all or nearly all of his or her outpatient visits.”

American Medical Association President Dr. Ardis Dee Hoven cautioned that billing data can be misleading without considering further details about doctors’ practices. Even those who handle medical billing professionally sometimes disagree about the right way to classify a visit.

Agomuoh, Im and Farhoomand insist that they treat older, sicker or more difficult patients than their peers. Agomuoh also suggested that the Medicare data contained errors; the agency stands behind it.

Individually, office visits for established patients cost taxpayers little, ranging from an average of $14 for the simplest cases to more than $100 for the most extensive. But collectively, they add up. Medicare shelled out more than $12 billion for them in 2012. Agomuoh received $174,000 for the visits he billed at the top rate alone, tens of thousands of dollars more than he would have taken in if his charges were more in line with his peers’.

In April, Medicare released data showing 2012 payments for outpatient services, and for the first time specified how much money went to individual health providers. Since then, most of the attention has focused on doctors who made the most from the program.

Looking at raw numbers, though, can unfairly flag some doctors who have multiple providers billing under their IDs or who justifiably use expensive services. It can be more revealing to look at which procedures doctors are performing and how frequently, and how their billings compare with those of their peers. (ProPublica has created a tool calledTreatment Tracker that allows users to do just that.)

Treatment Tracker

Medicare recently released, for the first time, details on 2012 payments to individual doctors and other health professionals. Use this tool to find and compare providers.

Office visits are a case in point. Doctors or their staffs determine how to bill for a visit based on a variety of factors, including the thoroughness of the review of a patient’s medical history, the comprehensiveness of the physical exam, and the complexity of medical decision-making involved. The AMA’s coding system gives them five options.

An uncomplicated visit, typically of short duration, should be coded a “1”; a visit that involves more intense examination and often consumes more time should be coded a “5.” The most common code for visits is in the middle, a “3.”

ProPublica focused its analysis on the 329,500 physicians and other providers who charged for at least 100 office visits for established patients. (Medicare did not release data on services that a provider performed on fewer than 11 patients.)

We found that while most providers had a tiny percentage of level 5 cases, more than 1,200 billed exclusively at the highest level. Another 600 did it more than 90 percent of the time. About 20,000 health professionals billed only at levels 4 or 5.

The AMA’s Hoven warned that the data could reflect errors or attribute high-priced visits to one doctor when the services were actually provided by another. Further, she said, because a growing number of seniors have multiple chronic conditions and complex medical histories, more level 4 or 5 office visits may be justified.

But other health industry leaders called the billing patterns identified by our analysis troubling.

“I can’t see a situation where every visit would be a level 5, especially on an established patient,” said Cyndee Weston, executive director of the American Medical Billing Association, an industry trade group. “I was trying to talk myself into it, but I just can’t see it.”

She said such providers “would be ripe for audit,” because they are outliers.

Medicare has long known that office visits are susceptible to fraud and what’s known as “upcoding,” or billing for a more expensive service than was actually performed.

May 2012 report from the U.S. Department of Health and Human Services’ inspector general found that doctors are choosing higher codes more often for evaluation and management services, the broad category that includes office visits. The proportion of level 4 visits by established patients increased by 15 percentage points from 2001 to 2010, while level 3 visits dropped

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