New OIG Audit Shows Providers Are Struggling to Bill Correctly for Assistant Surgeries

Sarasota, FL (WorkersCompensation.com) – Several recently proposed bills calling for the expansion of privileges for certain advanced practice providers (APPs) has brought both opposition and support. A new audit from the Centers for Medicare & Medicaid Services (CMS) raises the question of how well CMS and providers could manage potential changes in the scope of care.

CMS reimburses APPs for their services at a 15 percent discount below the physician fee schedule. For claims, CMS tracks provider credentials by National Provider Identifiers (NPIs), and uses that information to adjudicate claims and calculate reimbursement. 

In addition to an NPI, most claims adjudication systems also utilize taxonomy codes, which is a unique code that specifies a provider’s classification. Additionally, a taxonomy code is cross walked to 2-digit Specialty Code with further groups their specialty and provider level classifications. In addition to CMS, practically every claims adjudication software utilizes these pieces of information to assess provider level and payment. 

To further complicate matters, depending on an APPs credentials and the situation of service, an APP can have more than one taxonomy code. For instance, for the same provider one taxonomy code may be used for claims in the office, and a different taxonomy may be used for surgery. While the use of more than one taxonomy code is commonplace, it is not uncommon for practice management systems to be limited in the number of provider identifiers that are loaded, requiring in some cases a manual intervention on behalf of staff every time a claim is billed for that provider.

CMS also uses modifiers to differentiate the level of provider and reimbursement. For instance, if an APP assists in a surgery, providers are required to append an “AS” modifier to indicate that the provider that is assisting is an APP. 

When a physician assists with another physician, an 80 modifier is used to signify that a physician is assisting.  If the physician is operating as a co-surgeon, which requires each to have a different specialty, then each physician must bill with a 62 modifier to receive a reduced payment at 62.5 percent.  An 80 modifier prices at 16 percent of the CMS fee schedule, and an AS modifier prices at 13.6 percent. If no modifier is used, CMS assumes that the provider billed on the claim is the main provider of services and the claim is seen as an individual claim. 

In a recent claims audit reviewing co-surgery and assistant surgery claims from 2017 to 2019 covering $15.4 billion in charges, the OIG found that healthcare providers were often not billing correctly. From 100 sampled services, the OIG found 69 that were not in compliance. They found that 49 were incorrectly billed without the 62 modifier, and 14 were billed without the AS modifier. Additionally, 6 were billed incorrectly without modifiers, resulting in duplicate adjudication. 

Of the sampling, the OIG found that $31,545 was overpaid. Based on the actual overpayments, the OIG speculates that CMS has paid out $4.9 million in overpayments during the 2-year audit period. That total could be even higher as the OIG noted that in their review of 127 corresponding services, they additionally found 62 that were not compliant, resulting in an additional $24,471 in overpayments. 

The OIG concluded that CMS did not have an adequate software system to detect and properly adjudicate the co-surgery and assistant surgery claims. The findings of the audit also clearly indicates that provider offices often struggle with the complexity of billing these scenarios. If changes are made to the scope of practice for APPs, based on the findings of this audit it will be interesting to see if both CMS and physician practices will be able to keep up and do so accurately. 

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