Medicare Ophthalmology Audits: Is Your Practice Ready?


(October 26, 2015): Last month, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) released a study entitled “Questionable Billing for Medicare Ophthalmology Services.” As the study findings reflect, the OIG concluded that for the year 2012, approximately $171 million of the Medicare payments made that year for ophthalmology services were improper. As a result, OIG has recommended that the Centers for Medicare & Medicaid Services (CMS) increase the oversight of its contractors over ophthalmology providers. From a practical standpoint, this means that CMS will be shortly tasking either its Zone Program Integrity Contractors (ZPICs) and / or Supplemental Medical Review Contractor (SMRC) responsibility for adding ophthalmology providers to their list of “targets” for 2016 and 2017. Is your practice ready for a Medicare ophthalmology audit?

I. Overview of the Issue -- Why Medicare Ophthalmology Audits are on the Horizon:

Ophthalmology medical services are for treatments concerning the eye. Medicare Part B covers medical services and treatment for the eye provided by licensed eye specialists, including ophthalmologists and optometrists. Medicare Part B covers ophthalmology services that are reasonable and necessary for the diagnosis or treatment of an individual’s condition. Social Security Act, § 1862(a)(1)(A).

The OIG Report identified two specific eye conditions which generate the most payments for ophthalmology services under Medicare Part B: (1) wet age-related macular degeneration (wet AMD) and (2) cataracts. Wet AMD is the abnormal growth of blood vessels under the retina and macula (which is a small area at the center of the retina) which bleed and leak fluid, distorting central vision. Wet AMD is the leading cause of vision loss for people over the age of 65. Cataracts develop from the build-up of protein on the eye’s lens that causes the lens to become cloudy.

In 2012, Medicare paid $6.7 billion to 44,960 providers for services that screened for, diagnosed, evaluated, and treated wet AMD or cataracts. The OIG examined approximately 34 million paid claims billed by the 44,960 providers. When it did so, the OIG found that 1,726 ophthalmology providers were allegedly involved in questionable Medicare claims billing practices. These providers were paid $768 million for ophthalmology services in 2012. $171 million of this amount were paid for services connected to questionable billing practices investigated by the OIG. Of that amount, $91 million were for procedures to treat wet AMD, and $39 million for complex cataract surgeries. Notably, the OIG did not conduct a medical record review of the providers’ claims. Presumably, these medical reviews will now be conducted by ZPICs and / or SMRCs around the country as these audits are initiated. It is important to keep in mind that when these audits are initiated, neither ZPICs nor SMRCs will be limited to reviewing only wet AMD and cataract claims. It is therefore essential that you ensure that your documentation, medical necessity, coding and billing practices fully comply with applicable requirements.

II. Identified Deficiencies with “Wet AMD” Medicare Services and Claims:

Medicare covers several services for diagnosing and evaluating wet AMD, as well as for treating wet AMD. These services include fluorescein angiographies (i.e., procedure injecting dye for photographing blood vessels in the back of the eye) for wet AMD diagnoses. These services also include laser surgery, biologic injections and administration of drugs for wet AMD treatment. One of the more common biologic treatments for wet AMD is Lucentis.

Of the 1,726 ophthalmology providers the OIG associated with questionable billing practices in 2012, 261 of these providers treated or serviced the condition of wet AMD. Medicare paid these ophthalmology providers $91 million for procedures that treat wet AMD, including Lucentis injections and laser surgeries. These services represented a majority (53%) of the Medicare payments the OIG connected to questionable billing practices. With respect to Lucentis injections, the OIG found that 209 providers billed for Lucentis injections at a greater frequency than every 28 days, which is the standard frequency for such injections. The OIG also found that providers billed for Lucentis injections beyond the maximum annual dosing recommendation per eye. Finally, The OIG found that several ophthalmology providers billed Medicare for laser surgeries following an injection or drug administration for an unusually high percentage of beneficiaries at frequencies within the 28-day waiting period. How do your practices compare with the problematic claims identified by the OIG?

III. Identified Deficiencies with Cataract Services Billed to Medicare:

Medicare paid $3.5 billion in 2012 for services that screen for, diagnose, evaluate, or treat cataracts, which is the leading cause of blindness. Medicare covers several types of surgeries that treat cataracts. Medicare pays a higher rate for especially difficult cataract surgeries, which are called complex cataract surgeries. In 2012, Medicare paid an average of approximately $900 for each complex cataract surgery and $700 for each regular cataract surgery. Medicare paid an average of $200 more per complex cataract surgery than per regular cataract surgery in 2012 because complex cataract surgeries require more resources to perform.

Of the 1,726 providers, the OIG associated with questionable billing practices in 2012, 580 of these providers billed for claims of complex cataract surgery. The OIG reported that these providers billed at an unusually high percentage of their overall claims for complex cataract surgery. Medicare paid these providers $39 million for complex cataract surgeries in 2012. Notably, the government’s concerns in this regard appear to be totally based on the fact that these 580 ophthalmology providers have utilization rates that make them an outlier.

IV. Additional Questionable Billing Issues for Ophthalmology Providers:

In its September 2015 report, the OIG also found a significant number of ophthalmology providers with unusually high billing for tests to diagnose wet AMD and for ophthalmology claims using modifiers. Modifiers are used to separate certain services related to eye surgeries that can often lead to greater Medicare payment, if coded properly. The OIG identified approximately $41 million in paid claims in this area.

The OIG also found that seven geographic areas in the country had an unusually high amount of ophthalmology services associated with questionable billing practices: Huntington, West Virginia; Vineland, New Jersey; Salisbury, Maryland; Miami, Florida; Grand Rapids, Michigan; Fresno, California; and Cincinnati, Ohio. A significant amount of the questionable billing practices in these cities were associated with Lucentis injections for wet AMD. The OIG found that the percentage of Medicare payments associated with its measures of questionable billing were about twice as high in these seven cities compared to the national average.

The OIG also found that 821 out of the 44,960 providers who billed Medicare for ophthalmology services in 2012 were not listed in the CMS databases as eye specialists (i.e., ophthalmologists, optometrists or ambulatory surgery centers). Medicare paid these providers approximately $2 million in 2012 for ophthalmology services, including payments for major evasive eye surgeries. The OIG indicated that ophthalmology services billed by these providers may be of poor quality.

V. OIG Recommendations with Respect to Ophthalmology Providers.

In concluding its report, the OIG recommended five specific measures for increased monitoring by CMS: (1) increasing oversight of providers who demonstrated questionable billing practices for the use of Lucentis in treating wet AMD; (2) instructing CMS contractors to adopt the measures and methodology employed by the OIG in its Report as well as increasing monitoring in the seven cities identified in the Report with the unusually high number of questionable billing practices; (3) inputting the measures employed by the OIG in its Report into the CMS Fraud Prevention System; (4) reviewing local policies for billing ophthalmology services in Medicare when there is a lack of a national policy to promote uniformity in the billing practices of providers; and (5) reviewing payments for ophthalmology services that are inconsistent with providers’ specialties.

The OIG also referred the specific providers identified in its Report for questionable billing practices for ophthalmology services in 2012 to CMS to conduct further review and possible enforcement or administrative action. The OIG also referred the providers who were not listed in CMS databases as eye specialists that billed Medicare for major eye surgeries. Finally, the OIG requested that CMS and/or its contractors review medical records, review billing patterns and/or conduct unannounced site visits. CMS concurred with both recommendations.

VI. How Should Your Practice Respond to a Medicare Ophthalmology Audit?

Significant increases in CMS contractor (likely ZPIC and / or SMRC) initiated ophthalmology audits are on the horizon. As CMS continues to tighten up its monitoring activities in an effort to cut down on instances of perceived fraud, waste and abuse in the Medicare system, the scrutiny placed on ophthalmology documentation, medical necessity, coding and billing practices are fully compliant with applicable requirements. Does your ophthalmology practice have an effective Compliance Plan in place? If not, we strongly recommend that you get one! The implementation of an effective Compliance Plan, along with the performance of a “GAP Analysis” can greatly assist you in identifying possible areas of vulnerability where improvements in your practices are needed.

Robert W. Liles, JD, MS, MBA serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law. Robert represents health care providers and suppliers of all sizes around the country in connection with a full range of ZPIC prepayment reviews, postpayment audits, suspension and revocation actions. He also handles False Claims Act cases. For a complimentary consultation, please call Robert at: 1 (800) 475-1906.