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January 2009

Savvy Coder: Coding & Reimbursement
What’s Under Investigation? Know the OIG’s Priorities for 2009
By Sue Vicchrilli, COT, OCS, Academy Coding Executive, and David A. Durfee, MD, Senior Secretary for Ophthalmic Practice

In its latest work plan, the Office of Inspector General has identified the activities that it intends to scrutinize in 2009. Of the seven activities affecting ophthalmology, three are new areas of investigation and four are repeat areas of concern.

Three New Areas Targeted

Medicare practice expenses incurred by selected physician specialties. When Medicare determines payments for physicians’ services—such as medical and surgical procedures and office visits, including consultations—it takes into account a number of factors. These include the “physician work” component, which reflects the work time and intensity; the “malpractice” component, which reflects the malpractice exposure; and, a focus of this year’s investigation, the “practice expenses” component, which reflects the general categories of expens es, such as office rent, wages of personnel and equipment. OIG will see if payments for physician services performed by selected specialties are comparable to the actual expenses incurred.

Medicare payments for unlisted procedure codes. Unlisted codes (XXX99) are miscellaneous codes that are used when there is no CPT or HCPCS code to correctly identify the surgery or testing service provided. Unlisted codes are not paid under the fee schedule. Instead, Medicare contractors must suspend these claims for individual review and manual pricing. The OIG is examining physician usage of these codes.

Medicare billings with modifier –GY. The OIG will review the appropriateness of physicians’ use of modifier –GY on claims for services that are not covered by Medicare. Modifier –GY should be used for coding services that are statutorily excluded or do not meet the definition of a covered service. Beneficiaries are liable for payment. In fiscal year 2006, Medicare received more than 53 million claims appended with modifier –GY resulting in over $400 million in denials.


Still Under Investigation

Place-of-service errors. Federal regulations provide for different levels of payment depending on where services are performed. For example, CPT code 68816 Probing of nasolacrimal duct, with or without irrigation; with transluminal balloon catheter dilation has a physician allowable of $610 when performed in the office vs. $207 allowable in an ASC or hospital outpatient department (HOPD). OIG will continue to review claims for services performed in an ASC or HOPD to make sure that place of service is being coded properly.

E&M services during global surgery periods. The OIG will continue to investigate claims submitted with modifier –24, which is used to indicate that an exam performed within a surgery’s global period is unrelated to that surgery. When can you append modifier –24? A diagnosis code that is different from the surgical code is insufficient reason. Would the patient have this problem if he or she had not had the surgery? If the answer is no, do not bill, even with a new diagnosis code. But if it is a billable situation, the first entry in the chart should not indicate “postop.”

Physicians’ services performed by nonphysicians. The OIG is again investigating those services physicians bill to Medicare but do not perform personally. Such “incident-to” services are typically performed by nonphysician staff members. To learn more, see “When Techs See Patients” (Savvy Coder, October 2007) at

Patterns related to high utilization of ultrasound services. OIG investigations continue into procedures performed in the radiology section of CPT. For ophthalmology, it may target codes such as: 76510, 76511, 76512, 76513, 76514, 76516, 76517 and 76529.

To see the entire OIG work plan for 2009, visit and search the Web site for “work plan 2009.”

2009 Coding Update

On Tuesday, Jan. 13, from 11 a.m. to noon PST, the AAOE will host a Web conference that highlights the key coding changes for 2008. If you miss this Webinar, you can buy it as a CD.

To register, go to