OIG: Medicare Overpays for Chronic Care Management Services

An Office of the Inspector General (OIG) audit discovered that Medicare consistently overpaid for chronic care management (CCM) services, incurring millions in costs for Medicare and its beneficiaries.

The auditors examined over 7.8 million claims from physicians and 240,00 claims from hospitals for CCM services provided in 2017 and 2018. OIG found $1.9 million in overpayments due to noncompliance with federal requirements across over 50,000 claims.

Medicare beneficiaries’ cost sharing for these overpayments totaled $540,680.

About $1.4 million of the $1.9 million was overpaid because of providers billing noncomplex or complex CCM services more than once for the same beneficiary. Another $438,000 in overpayments were the result of a provider billing for CCM services and overlapping care management services that were provided to the same beneficiaries.

Over $50,000 in overpayments were discovered for incremental complex CCM services that were billed alongside complex CCM services. Since the payments for the complex CCM services were overpayments, the incremental complex CCM claims should have also been denied.

“These errors occurred because CMS did not have claim system edits to prevent and detect overpayments,” the OIG report explained.

OIG attributed some of the overpayments to a 2017 policy change in which CMS unbundled complex and noncomplex CCM.

“Although scope of service and billing requirements are the same for noncomplex CCM as for complex CCM, the two types of services differ as to clinical staff time, medical decision making, and care planning,” the report stated.

A physician cannot submit a claim for incremental complex CCM if they already submitted a claim for noncomplex CCM.

Because CCM services are a fairly new category of Medicare services, they are at a higher risk for overpayments, OIG reasoned.

OIG recommended the following actions for Medicare contractors following the audit:

1. Recover the $1.9 million for claims that are within the reopening period, and instruct providers to refund up to $540,680, which beneficiaries were required to pay
2. Based on the results of this audit, notify appropriate providers so that they can exercise reasonable diligence to identify, report, and return any overpayments in accordance with the 60-day rule and identify any of those returned overpayments as having been made in accordance with this recommendation
3. Implement claim system edits to prevent and detect overpayments for noncomplex and complex CCM services. We also recommend that CMS implement claims system edits at its level.

The audit report confirmed that CMS agreed with all recommendations and initiated actions to recover the overpayments. CMS also noted that since the audit period, it has improved its process by implementing system edits and claims processing controls to prevent overpayments.

“While CMS has not observed substantial rates of chronic care management overpayments, we continue to evaluate opportunities to implement claims processing controls to prevent and detect overpayments for both complex and noncomplex chronic care management services,” CMS stated.

“CMS has also evaluated the feasibility and cost effectiveness of system edits in the context of overall access to chronic care management services and has implemented system edits to prevent and detect overpayments for both noncomplex and complex chronic care management services.”