Purpose

To determine whether UnitedHealthcare sufficiently monitors out-of-network providers who routinely bill for higher-level Evaluation and Management services and to determine if out-of-network providers billed UnitedHealthcare for higher-paying Evaluation and Management services than what were actually performed. The audit covered the period January 1, 2016 through December 31, 2016.

Background

The New York State Health Insurance Program (NYSHIP) provides health insurance coverage to over 1.2 million 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, covering a comprehensive range of services for about 1.1 million of these members. The State Department of Civil Service (Civil Service) administers NYSHIP. In carrying out its responsibilities, Civil Service contracts with UnitedHealthcare (United) to administer the Empire Plan’s medical/surgical program. Medical/surgical benefits cover a range of services such as office visits, outpatient surgery, diagnostic testing, physical therapy, and chiropractic services.

Evaluation and Management (E/M) billing codes are used by most physicians to report a significant portion of their services. The E/M codes are divided into broad categories such as office visits, hospital visits, and consultations. Within each category, there are either three or five levels of care that providers bill. The amount of United’s reimbursement depends on the level of care billed – the higher the level billed, the greater the reimbursement. Billing for a higher level of care, which is higher paying, than the service actually provided is a practice known as upcoding.

During the period January 1, 2016 to December 31, 2016, United paid out-of-network providers over $65.6 million for E/M services, of which 57 percent, or $37.4 million, represented high-level E/M services.

Key Findings

• Improvements are needed in United’s method for monitoring out-of-network providers who bill for higher-level E/M services. The system that United uses can miss providers who routinely improperly bill the majority of their claims at higher-level E/M codes.
• Based on a test of 90 claims from nine providers, which paid $72,245 for high-level E/M services, 42 claims (47 percent) totaling $28,731 were upcoded or unsupported for the higher level of care billed.

Key Recommendations

• Improve the monitoring of claims submitted for E/M services by assessing out-of-network providers who routinely bill the majority of their claims at high-level E/M codes.
• Review the $28,731 and make recoveries, as warranted. Expand the review of the at-risk providers we identified and recover other improper payments.

Other Related Audits/Reports of Interest

New York State Health Insurance Program: UnitedHealthcare - Upcoding of Selected Evaluation and Managements Services (2006-S-11)
New York State Health Insurance Program: UnitedHealthcare - Upcoding of Selected Evaluation and Managements Services (Follow-Up) (2007-F-41)
New York State Health Insurance Program: UnitedHealthcare - Upcoding of Selected Evaluation and Managements Services (Follow-Up) (2013-F-13)