To implement these local policies, some  MACs have developed local edits for certain services. Similar to the  national MUEs, these local edits set limits on the maximum number of  units that may be billed by a provider for the same beneficiary on the  same day. Over 99 Percent of 2011 Payments Were for Services under Unpublished MUE Limits

In 2011, Medicare paid approximately $23.9 billion for 1,845 types   of services with unpublished MUEs. However, because MUEs were not implemented as per-day limits,  approximately $14 million was paid for services where total units billed by  a provider for a beneficiary on the same day exceeded the MUE limits. CMS officials stated that because  the MUEs are unpublished, providers may not know a given service has  an MUE and therefore may not include a modifier when billing for  services. some MUEs that are likely to become DOS edits include those where it is  anatomically impossible to exceed the MUE limit. Use of More Restrictive Local Contractor Edits for Certain Services Could Have Reduced Payments by an Additional $7.8 Million

Our examination of 13 services where MACs developed more restrictive  local edits than the unpublished MUEs showed Medicare payments could  have been reduced had CMS examined these edits and adopted them as  part of its program integrity responsibilities. As a result, it may be  missing an opportunity to identify situations in which savings could be  achieved by implementing some of the local edits nationally. Payments for services that exceeded the unpublished MUE limits also  tended to be concentrated in certain states. CMS Has Not Systematically Examined Claims That Exceeded Unpublished MUE Limits to Determine Whether They Were Proper

CMS and its contractors do not have a system in place for examining  claims to determine the extent to which providers may be exceeding  unpublished MUE limits and whether payments for such services were  proper. CMS’s Contractors Did Not Systematically Examine Claims for Services above Unpublished MUE Limits to Determine If They Were Appropriate

CMS officials and contractors that we interviewed said they do not have a  system in place for regularly examining claims related to services with  unpublished MUEs from providers that most often exceeded MUE limits.While CMS has several strategies to reduce improper payments, and it  reviews aberrant billing patterns at a provider level, that is, across all  services billed by the provider, officials told us that they have no plans to  review services specifically related to MUEs. Payments That Exceeded MUE Limits Were Concentrated among Certain Providers

We found that a small number of providers accounted for a large share of  payments for services that exceeded the unpublished MUE limits. Of these, the 100 providers  with the highest payments that exceeded the MUE limits accounted for  nearly 44 percent of total excess payments, although they accounted for  only about 1 percent of total payments for all services with unpublished  MUEs. In addition, the provider with the highest payments that exceeded  the unpublished MUE limits alone accounted for about 4 percent of these  payments, although this provider accounted for less than 0.1 percent of  total payments for all services with unpublished MUEs. About 26 percent of the top 100 providers exceeding  unpublished MUE limits included clinical laboratories and DME providers. CMS has also estimated improper DME  billing of 66 percent in fiscal year 2012—higher than for any other service  measured. In November 2012, we recommended that  CMS implement MUEs that assess all quantities of services provided to  the same beneficiary by the same provider on the same day—in other  words, as per-day limits—but allow the limits to be exceeded if the  provider included modifiers to explain the medical necessity of exceeding  the limits. Unpublished MUEs were developed for  services and items that have been fraudulently or abusively billed in the  past. Therefore, systematically examining billing information and claims  from providers that exceed these limits and do not use modifiers to  indicate the excess units are medically appropriate, could help identify  improper payments and could inform CMS’s program integrity efforts. Recommendations for Executive Action

To improve the effectiveness of the unpublished MUEs and better ensure  Medicare program integrity, we recommend that the CMS Administrator  take the following two actions: examine contractor local edits related to unpublished MUEs to  determine whether any of the national unpublished MUE limits should  be revised; and  consider periodically reviewing claims to identify the providers  exceeding the unpublished MUE limits and determine whether their  billing was proper. In its written  comments, HHS concurred with both our recommendations.
Why GAO Did This Study

CMS has estimated improper Medicare fee-for-service payments of $29.6 billion in fiscal year 2012. To help prevent improper payments, CMS has implemented national MUEs, which limit the amount of a service that is paid when billed by a provider for a beneficiary on the same day. The limits for certain services that have been fraudulently or abusively billed are unpublished to deter providers from billing up to the maximum allowable limit.
GAO was asked to review issues related to MUEs. This report examines the extent to which CMS has (1) paid for services that exceeded the unpublished MUE limits and (2) examined billing from providers that exceeded unpublished MUE limits. GAO analyzed Medicare claims related to these limits in 2011, and interviewed CMS officials and selected contractors in states with high improper payments.

What GAO Found

Less than 0.1 percent of payments Medicare made in 2011 were for amounts of services that exceeded certain unpublished limits for excess billing and where the claims did not include information from the providers to indicate why the additional services were medically necessary. These limits are set by the Centers for Medicare & Medicaid Services (CMS)--an agency within the Department of Health and Human Services (HHS)--as a means to avoid potentially improper payments. To implement these limits, CMS established automated controls in its payment systems called Medically Unlikely Edits (MUE). These MUEs compare the number of certain services billed against limits for the amount of services likely to be provided under normal medical practice to a beneficiary by the same provider on the same day--for example, no more than one of the same operation on each eye. GAO analysis of 2011 claims data found approximately $14 million out of a total of $23.9 billion in Medicare payments for services that exceeded unpublished MUE limits and where the claims did not include information from the providers to indicate why the additional services were medically necessary. As GAO has previously reported, claims could exceed the limits because the MUEs are not set up as per-day limits that assess all services billed by a provider for a single beneficiary on the same day. CMS plans to begin implementing MUEs for some services as per-day limits for services where it would be impossible to exceed the limits for anatomical or other reasons. Medicare contractors that pay claims may develop local edits, which can set more restrictive limits for some services than the national unpublished MUE limits. GAO's analysis of claims data applying a few of these more restrictive local limits showed that by applying them instead of the relevant national MUE limits, CMS could have lowered payments by an additional $7.8 million. However, CMS is not evaluating these local edits to determine if these lower limits might be more appropriate. To the extent that these and other local edits are not evaluated more systematically, CMS may be missing an opportunity to achieve savings by revising some national MUEs to correspond with more restrictive local limits.
CMS and its contractors did not have a system in place for examining claims to determine the extent to which providers may be exceeding unpublished MUE limits and whether payments for such services were proper. CMS officials and contractors told us that they examine aberrant billing patterns at a provider level, that is, across all services billed by the provider, but not specifically for services with unpublished MUE limits. GAO found that payments that exceeded MUE limits were concentrated among certain providers and types of specialties, in certain states, and for certain services. For example, the top 100 providers with payments that exceeded the MUE limits accounted for nearly 44 percent of total payments that exceeded the MUE limits, although they accounted for only about 1 percent of total payments for all services with unpublished MUEs. Moreover, about 26 percent of the top 100 providers included clinical laboratories and durable medical equipment providers, both of which have been identified in the past as having high potential for fraudulent billings. Because unpublished MUEs were developed for services and items that have been fraudulently or abusively billed in the past, without systematically examining billing information and claims from the top providers exceeding those limits CMS may be missing another opportunity to improve its program integrity efforts.

What GAO Recommends

GAO recommends that CMS examine contractor edits to determine if any national unpublished MUE limits should be revised; and consider reviewing claims to identify providers that exceed the unpublished MUE limits, and determine whether their billing was proper. In its written comments, HHS concurred with both our recommendations.