OIG Targets ED Physicians for Fraudulent E&M Coding Using Incomplete Claims Data

OIG misses the target for claims coding fraud

A recent article in the NY Times pointed to the belief that “the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care”.  This and a related article pointed to a recent report, by the DHHS and the Office of the Inspector General which suggested that “the most aggressive billing — by just 1,700 of the more than 440,000 doctors in the country — cost Medicare as much as $100 million in 2010 alone, noting that the largest share of those doctors specialized in family practice, internal medicine and emergency care”.  The report provides graphic evidence of the trend towards higher level coding for E&M services by physicians, including emergency physicians (Figure 1).

OIG analysis of E&M code trends for EPs











The report also claimed that “physicians who consistently billed higher level E/M codes practiced in nearly all States, represented similar specialties, and treated beneficiaries of similar ages and with similar diagnoses as those of other physicians.”  The OIG has given a list of 170 emergency physicians who bill EM level 4 and 5 at least 95% of the time to CMS which has forwarded this list to Medicare Administrative Contractors for investigation, audit and possible enforcement action under pertinent fraud and abuse provisions. Additionally, CMS plans to prepare its own report on the 5,000 top physician billers. The clear inference of these articles in the Times and the report from the OIG is that emergency physicians are gaming the system, using electronic record systems that encourage higher levels of documentation, straight claims up-coding, and the provision of medically unnecessary services to Medicare patients in order to increase payments from the program.   As AAEM and ACEP have suggested, EM physicians are under the microscope, and so-called ‘outliers’ also being threatened with significant penalties and legal action.

There is no question that fraud and abuse of medical coding and claims submission rules hurts all of us: patients, the government, and providers too, especially in an era of limited government budgets and rising calls for action to constrain the cost of care.  Most physicians are in favor of an active effort by the OIG to pursue those providers, hospitals, and companies that are reaping excessive payments at the expense of the Medicare and Medicaid programs, though nearly all provider groups have expressed great concern about the flawed claims review methodologies used by RAC auditors, and how these bounty hunters are compensated.  But what if the method the government uses to target providers for audit and investigation is also flawed, and as a result, innocent physicians are being accused and subjected to expensive civil and sometimes criminal proceedings?

Perhaps the steady increase in the use of higher-level E&M codes by emergency physicians, has other, more benign and reasonable explanations.   Some have attributed this ‘code creep’ to an increase in the number and acuity of the sickest Medicare patients in our EDs, though the evidence for this is admittedly sketchy.  Others have suggested that electronic medical records have enabled emergency physicians to document the complexity of medical decision-making more accurately for ED patients, thus correcting the inappropriate under-reporting of care and acuity in the years before the advent of EMRs.  Certainly, as Medicare and Medicaid Managed Care has taken hold, these plans and networked capitated providers have made concerted efforts to discourage their less acutely ill enrollees from using the ED; and this of course would be reflected in a shift in the average acuity of the enrollees who do come to the ED, and a shift in E&M coding, without having to rely on the idea that ‘sick patients are getting sicker because they are generally older and have more complicated medical problems’.  However valid these possibilities may be, I believe there is one over-riding trend in the practice of emergency medicine that may account a significant portion of the ‘code creep’ that the OIG has tallied and reported:  the trend towards relying on an ever increasing number of Nurse Practitioners and Physicians’ Assistants to provide care to patients in the ED.  Primarily, these Non-Physician Practitioners (NPPs) are directed to care for the lower acuity patients, who are more likely to receive lower level E&M coded services (99281-99284).  As the number of NPPs in EDs grows, the percentage of higher level (99285 and 99291) services provided by the emergency physicians in the ED will of course steadily increase.    The table below (courtesy of Ed Gaines, Stacie Norris and James Rider at Medical Management Professionals, Inc.) shows the percentage of patients with E&M codes 99285 and 99291 cared for by emergency physicians, and those cared for by EPs, NPs, and PAs combined, in the ED in all of the states in 2011.

EPs vs EPs plus NPPs - use of 99281 and 99291



















The following graphic shows the increase in the frequency of use of the 99285 code when only the EP’s claims are considered, compared to the percentage of use of this code when the services of all providers, including the NPPs, are considered., for 2011 claims.  This percentage point increase ranges from 0% to over 7%, and is highly correlated to the percentage of patients that are treated by NPPs in each state, which ranges from 0% to 25%.  The only states where these correlations are not high is in rural states like Indiana, Maine, New Hamshire, and upstate New York, where the use of NPPs is very high, and other factors appear to distort the relationship between use of codes and NPP penetration into EDs.  What this graph shows is that in areas where NPPs see many of the (usually lower acuity) patients in the ED, the actual percentage of 99285 codes used by emergency physicians, as identified by CMS claims data, is artificially and significantly elevated by the failure to consider the claims submitted by NPPs in these same EDs.   Thus, in GA, where 12.5 % of ED patients are treated by NPPs, the % of 99285 codes for EPs goes from 51% to 47.2% when NPP claims are also considered.  This analysis most certainly applies equally to individual emergency physician claims statistics in specific emergency departments, where the percentage of patients seen by NPPs can be as high as 40%.  In such cases, the calculated percentage of higher-level codes by EPs in these EDs would be even more greatly distorted by ignoring the NPP claims data.

Correlation between % increase in EP 99285 and % of ED patients treated by NPPs

The saddest aspect of this distortion is that, as a result, the emergency physicians who work in EDs that employ NPPs to care for a large percentage of Medicare and Medicaid patients are being targeted for investigation of possible fraud and abuse, when in fact the actual overall cost of the care of all these patients is likely to be LOWER than average, because Medicare and Medicaid pay 15% less for services provided by NPPs!  Talk about a miscarriage of justice.

Over the last decade or two, the use of NPPs in EDs has steadily increased.  According to a study published in 2012 by Brown, et al in the Int J Emerg Med:  from 1993 to 2009, PA visits in the ED rose from 2.9% to 9.9%, while NP visits rose from 1.1% to 4.7% for the nation.   Together, NPP visits accounted for almost 15% of 2009 ED visits and 40% of these were seen without involvement of a physician.  Certainly, a significant portion of the rise in the use of higher-level codes by emergency physicians in CMS data is attributable to the skewing of the percentages by the failure to consider the claims and services provided by an increasing number of NPPs.  I think it may be quite possible that these same considerations account for at least some of the changes in coding noted for other specialists who frequently use NPPs in their practices.

Previously, I posted a blog questioning “why would CMS would target emergency physicians?“, who provide 4-10 times more charity care than any other specialists.  In light of the data posted above, I think it is even more important for CMS to take a second look at how they are targeting physicians for audit and investigation.

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3 Responses to OIG Targets ED Physicians for Fraudulent E&M Coding Using Incomplete Claims Data

  1. Nice post. I learn something totally new and challenging on blogs I stumbleupon every day.

    It’s always useful to read content from other authors and practice a little something from their websites.

  2. Jim Blakeman says:


    Your article was helpful and timely. Good that it got out there right away when the WSJ and NYT articles hit. I didn’t comment at the time as I hadn’t thought this through but in re-reading your article you seem to place a lot of importance on NP/PA use in lower acuity services. However, the OIG didn’t focus on Specialty 93 Emer Med., they used the aggregate/all specialty data in their comparison of 2001 vs 2010 use of the ED codes. In 2010 they referenced 99285 use at 48% and 2001 at 27%. That’s the all-specialty amount. Specialty 93 had a 52% usage rate in 2010 and 30% in 2010.

    Thus, they included the mid-level data. That’s probably occurred to you since, but wondering if it you see it differently.

    Also, wondering if the Pitts/Pines study in Annals from April 2012 and the recent RAND report changes your view of increased clinical acuity in the ED. I agree, sick patients aren’t getting sicker but I think we’re just seeing more of them proportionally than we used to. Kind of like the inverse of payers/med groups keeping not-sick patients out of the ED – they’re sending us more of their sick ones.

    Again, much appreciation for your analysis here. I hadn’t seen the Brown study re: use of PAs in the ED. Helpful.

  3. FickleFinger says:

    Hi, Jim, thanks for the comment – glad you looked back at this older post. Re: the inclusion of NP and PA data in the PBAR summary files, I would be interested in where you came across this fact, as in the OIG report the assertion is that this data represents PHYSICIAN coding and claims. According to the report from the OIG in 2102, which I linked to in my blog: “In 10 years, PHYSICIANS’ billing of the highest level code (99285) rose 21 percent, increasing from 27 to 48 percent. During the same time, PHYSICIANS’ billing of all other codes decreased. PHYSICIANS billed the lowest level code (99281) less than 3 percent of the time.” Looking specifically at these PBAR files, we see that the data is predicated on: “Services provided by an individual licensed under state law to practice medicine or osteopathy. Physician services given while in the hospital that appear on the hospital bill are not included.” Perhaps I am missing something.

    I do think that the RAND report does suggest that sick ED patients are now sicker based on data other than claims E&M coding, and I think this may reflect the fact that sick patients are more often being referred by PMDs and specialists to the ED rather than being direct admitted to the hospital for evaluation and management.

    Thanks again for the comments.

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