APA's Office of Healthcare Systems and Financing (OHSF) has learned of a
new reason for denying Medicare claims from Dr. Elliott Stein, an APA member
in Miami Beach, Fla. The denials are the result of a program launched by the
Centers for Medicare and Medicaid Services (CMS) in Florida to weed out
beneficiary fraud and abuse.
According to James Corcoran, the medical director of Florida's Medicare
carrier, First Coast Service Options, approximately 500 Medicare beneficiaries
have been identified as having used far more medical services than program
administrators found "medically believable."
"In the past," said Irvin "Sam" Muszynski, J.D.,
director of OHSF, "we have certainly been aware of CMS flagging
physicians whom it believes are charging for more services than they could
possibly deliver, but this is the first time we're aware of CMS's targeting
Although 500 people may seem like a small portion of Florida's Medicare
population, Stein reported to APA staff that he had received overutilization
denials for three patients. The claims were returned unpaid with a benefits
code of "PR," which stands for "patient
responsibility," and a numeric remark code of 151, which indicates"
payment adjusted because the payer deems the information submitted does
not support this many services."
When Stein first attempted to appeal the denials, he was turned down. In
addition, he received a form letter instructing him to bill the patients for
his services, although doing so would be contrary to his
participating-provider agreement with Medicare.
Stein called First Coast's customer service line to find out why his appeal
request was denied and was advised that his only option was to get each
patient to sign a form authorizing him to appeal on the patient's behalf. This
instruction was given despite the fact that Medicare participating providers
may appeal denials without any special authorization.
The advice turned out to be incorrect. This is not surprising in light of a
report published in July 2004 by the Government Accountability Office (GAO)
stating that when the GAO posed questions to Medicare carrier call centers,
only 4 percent of the responses were complete and accurate (PP&MC,
September 17, 2004).
When OHSF staff contacted Lydia Rogers, the head of Program Integrity at
First Coast Service Options in Florida, Rogers explained that the three claims
denials Stein had received resulted from his patients' having been selected to
undergo a benefit integrity audit after CMS had identified them as "very
high" utilizers of services from a number of providers.
Rogers said that Stein could appeal the claims denials just as he would any
other medical-necessity denials and would receive payment as soon as the
carrier received proper documentation that the medically necessary care had
Rogers confirmed that CMS does identify beneficiaries believed to be
overutilizers of services and automatically denies further claims on their
behalf. She assured APA, however, that once the carrier obtained documentation
proving that the billed care for these patients was needed and provided, the
audit notation would be removed from their records.
Rogers said that these audits often uncover fraud arising from stolen
identifcation or from beneficiaries' sharing identification with
nonbeneficiaries to obtain care to which they are not entitled.
When a new Medicare patient comes to your office, it is wise to photocopy
the patient's photo ID and keep it on file. If Medicare charges that one of
your patients is committing fraud by allowing others to use his or her
Medicare insurance, you can show that you made the effort to establish the
patient's identity before you sent the patient's claim to Medicare and
therefore had no involvement with any fraud that may have been committed.▪