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Under the Microscope: The OIG Payment Crackdown, Part 3

In the first two installments of this three-part series (see here and here), we addressed two recent OIG reports and how various government entities have responded. This concluding article explores yet another recent OIG audit of the ambulance industry and resulting report: “Medicare Paid Twice for Ambulance Services Subject to Skilled Nursing Facility Consolidated Billing Requirements” (February 2019, Report #A-01-17-00506). In short, the Department of Health and Human Services Office of Inspector General detected nearly $20 million in potential overpayments made by the Medicare Part B program for ambulance services that were also included in Medicare Part A payments to skilled nursing facilities as part of consolidated billing.

The OIG reviewed 100 random ambulance claims for patients who were in Part A stays and found 78 of them should not have been paid by Part B. That’s an error rate of almost 80%, and one the OIG said was caused by two factors: 1) the Medicare system not having proper edits in place, and 2) ambulance suppliers not having “adequate controls” to prevent it. The report said nothing about the SNFs having any fault in these overpayments but noted “ambulance suppliers did not obtain confirmation of the beneficiary’s Part A SNF resident status from the SNF before billing Medicare.”

It appears the OIG understands ambulance suppliers are at the mercy of the SNFs in obtaining this information but nonetheless places all the blame on the ambulance supplier. However, the information those suppliers need is entirely and solely in the hands of the SNF making the call requesting transport. Unfortunately there is no searchable Part A SNF inpatient status database, so it’s only the SNF that knows a patient’s Part A status and the reason for the transport. Therefore, it makes logical sense that the SNF should be required to tell the ambulance service of the patient’s Part A status, instead of expecting the ambulance service have “controls” in place that “confirm” Part A status.

Recommended Steps

The OIG made two recommendations in this report: 1) that Medicare place edits in its system to catch Part B transport payments for patients in a Part A stays, and 2) that $20 million in overpayments be recouped from the ambulance service suppliers. Recommendation No. 1 will certainly help eliminate this issue moving forward and, if improper billing is detected in a timely way, might even allow the ambulance service to bill the SNF for the transport.

Pursuant to other CMS guidance (transmittal 2176, change request 10955), the necessary edits are slated to go into effect on April 1, 2019. Interestingly, this transmittal was published before the OIG report was finalized in February, and we suspect this immediate action was taken after CMS received a draft version of the OIG report. These edits are designed to help detect whether Part A SNF patients received hospital services that are included or excluded from SNF consolidated billing. A claim will be rejected if certain data points comparing hospital services, Part A SNF status, and services received at the hospital match up in a particular way. When that happens the SNF will be financially responsible.

Still Payable

Thus, while not discussed in the OIG’s report, note that these trips are still payable, just by the SNF instead of Medicare Part B. Because the SNF received money under Part A for transports, the SNF must pay the ambulance service for that trip. Perhaps this simple fact shows why SNFs are slow to give information to ambulance service suppliers in the first place.

As far as the second recommendation, time will tell whether the OIG, MAC, SMRC (supplemental medical review contractor), or even some other government contractor takes the lead in recovering alleged overpayments from ambulance services. If the previous two reports are any indication, we suspect recovery will definitely commence; it’s just a matter of when and by whom.

Data Mining

Regardless of who causes the overpayment, most government audits (from the OIG, MAC, or Medicare contractors) follow the money by conducting document reviews. Often things like medical necessity, signature compliance, reasonableness, mileage, and PCS compliance are scrutinized by humans, who subjectively review the documents against Medicare criteria. However, a common theme among these recent OIG reports is that all three involved only data mining and analysis—no actual documents (PCRs, PCS forms, etc.) were reviewed. This means you, as an ambulance service, can take similar proactive steps to prevent incorrect billing and detect incorrect payments by performing similar data mining on your own transports and claims.

However, simply performing data mining to determine overpayments is not always as simple as it looks. For example, just because a patient might be a Part A SNF inpatient does not mean all ambulance transports are covered under consolidated billing. Therefore simply looking for N-H (nursing home to hospital) claims may not tell you enough to know whether the trip should have been paid under Part B or not. The Medicare claims processing manual outlines certain services that are excluded from facility liability under SNF consolidated billing. The problem is that these exceptions are confusing and sometimes have exceptions themselves. The more complex and convoluted a coverage criterion, the more complicated the algorithm to determine whether the service is included in SNF consolidated billing or excluded and separately billable by the ambulance service to Part B. This may also pose a challenge for MACs in creating the edits recommended by the OIG, or at least in creating edits that will not automatically kick out claims that should be paid.

Although the OIG reviewed claims (from ambulance services, SNFs, and hospitals), it did not review actual documents. Thus it is possible some of the denied transports fit into one of the exclusions from SNF consolidated billing—an exception that could only be detected through review of additional supporting documents instead of solely the claims (and payments). Just as the OIG reports from 2018 detected issues that appeared to reveal overpayments, in the case of Part A SNF consolidation, there could be billing errors that contributed to some of the identified problems or explanations why billing was done in a certain way and is, in fact, correct and payable under Part B.

Be Proactive

Therefore, the time is now ripe for ambulance services to be proactive in their own audits and take steps to identify potential overpayments or the types of problems already detected by the OIG in these three documents. You cannot sit back and wait for the government to notify you of an overpayment—you must take steps to investigate potential problems on your own. Amendments to the federal False Claims Act require healthcare providers (including ambulance services) to investigate potential overpayments when put on notice of problems. These three OIG reports create that notice, revealing nearly a combined $40 million in overpayments for improper billing.

Doing some simple data mining seeking things like emergency HCPCS codes to locations other than hospitals, noncovered destinations, and patient Part A status in a SNF can help to identify potential overpayments. Of course, not all identified claims will result in overpayments. Some might be coding errors, which require reopening requests. Some might have a legitimate explanation or meet an exception (or exception to an exception).

As these three OIG reports have shown, the Medicare program does not always have proper edits in place to detect issues, and sometimes things will slip through the cracks. Seeking out potential errors, regardless of payment, will keep your ambulance service compliant and hopefully avoid repayment demands or audits.

Dan Pedersen and Christopher Kelly are lawyers with Page, Wolfberg & Wirth LLC who focus on regulatory healthcare law as it relates to the EMS and ambulance industry. This article is not intended as legal advice. For more information or for assistance with any overpayment appeals, reach them at 717/691-0100 or by e-mail at or


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