New York State Health Insurance Program
Certain Claim Payments for Evaluation
Management Services (Issued 4/6/12)
To determine if United HealthCare (United) made excessive claim payments due to providers' improper use of Modifier 25 (for evaluation and management services related to other medical procedures).
The New York State Health Insurance Program (NYSHIP) provides health insurance coverage to active and retired State, participating local government and school district employees and their dependents. The Empire Plan is the primary health benefits plan for NYSHIP. The Department of Civil Service contracts with United to provide medical/surgical coverage under the Plan. United's payments for medical procedures include increments for certain evaluation and management (E/M) services that are necessary before and/or after the performance of a procedure. Normally, United does not allow additional payments for E/M services, unless such services are significant and separately identifiable (i.e., above and beyond the usual preoperative and postoperative care associated with the main procedure). In 2009, United paid over $59 million for about 1.5 million services submitted with a modifier 25.
- For 27 (12.6 percent) of the 214 claims we tested, a significant and separately identifiable E/M service was not provided. On one claim, for example, United paid a provider $561 for a lesion removal and another $204 for a purported E/M service. However, there was no indication in the medical records that a significant and separately identifiable E/M service was, in fact, provided. Thus, the provider should not have billed (and United should not have paid) the additional $204 for the E/M service.
- We estimate, with a 90 percent confidence level, that United overpaid between $3.2 million and $7.8 million during our audit period because providers improperly applied Modifier 25 to their claims.
- Because of the large volume of claims, United officials relied extensively on the integrity of providers to submit their claims properly. Consequently, United had not formally assessed the risk of Modifier 25 abuse and taken steps to identify providers with aberrant E/M billing patterns.
- Improve controls to ensure that payments related to Modifier 25 are appropriate. Steps should include analysis of claims with Modifier 25 to identify providers with aberrant billing patterns, educating providers about the correct use of Modifier 25, and recovering overpayments for the improper use of Modifier 25, as appropriate.
Other Related Audits/Reports of Interest
New York State Health Insurance Program: Inappropriate Billing for Outpatient Consultation Services Report 2007-S-20
New York State Health Insurance Program: Upcoding of Selected Evaluation and Management Services Report 2006-S-11
State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone:(518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236