Advocacy & Practice Updates — Advocacy & Practice

OIG Reports $22 Million in Potentially Inappropriate Ophthalmology Payments

Last December, the Office of the Inspector General (OIG) released a highly anticipated report on Medicare spending for ophthalmology services. The OIG’s report claims that in 2012, Medicare made $22 million in potentially inappropriate payments for certain cataract, glaucoma, and AMD services. The report comes just 2 years after the OIG’s report on Medicare spending on wet-AMD treatments during 2010, and may result in both public and private payers fortifying their barriers to wet-AMD services.

Report does not account for important aspects of treatment approval process

Before diving into the findings and recommendations, it is important to appreciate a key limitation of the OIG’s methodology: it is limited to claims-based analysis and the criteria of Medicare and its contractors’ coverage policies in 2012. The analysis does not account for medical records that may have been attached to an individual claim or other communications with Medicare and its contractors that may have justified the potentially inappropriate spending.

Retina specialists often must work with payers to ensure that patients have access to necessary care, particularly when a treatment goes beyond what is allowed under a coverage policy. As the report’s title indicates, the OIG’s analysis was limited in its scope and resulted in findings that must be caveated as “potentially inappropriate spending.”


Potentially inappropriate payments less than 0.2% of overall ophthalmology spending

In 2012, the Centers for Medicare & Medicaid Services (CMS) spent nearly $8.2 billion on ophthalmology and optometry services. Of the $8.2 billion in total spending:

  •  $3.5 billion (43%) was for cataract-related services.
  • $2.2 billion (27%) was for wet-AMD treatments.
  • $1.3 billion (16%) was for glaucoma-related services.

According to the OIG, slightly more than $22 million of this total spending was associated with potentially in appropriate payments. The $22 million targeted by this report represents an incredibly small 0.27% of total spending.

To further assess its findings, the OIG broke down the $22 million into 2 key segments:

  • $14 million for ophthalmology claims that were potentially inappropriate according to national requirements
  • $8 million for ophthalmology claims that were potentially inappropriate according to Medicare Administrative Contractors’ (MACs) local coverage requirements.

At the segment level, the comparison of total spending to potentially inappropriate spending is even starker. The $14 million in spending for services that were potentially inappropriate under national coverage determinations (NCDs) accounts for only 0.17% of total ophthalmology spending in 2012.

Similarly, the $8 million in spending for services that potentially exceeded local coverage determination (LCD) limitations represents only 0.1% of total 2012 spending for ophthalmology services. Although the spending levels are considerably small, based on its response to the OIG, CMS likely will take action on the findings.


Potentially inappropriate wet-AMD treatments: A minute portion of total spending

Diving deeper into the spending on retina-related services, only $228,755 of the $14 million in potentially inappropriate ophthalmology claims related to NCDs was associated with ocular photodynamic therapy (OPT) for treatment of wet AMD—the only retina-related NCD. The OIG alleges that national Medicare made payments for wet-AMD OPT procedures despite providers not performing both steps of the treatment on the same day.

The potentially inappropriate spending on OPT for wet AMD accounts for only 1.59% of all spending in this segment and a miniscule 0.0028% of total ophthalmology spending in 2012. At the individual claim level, with a total of 675 potentially inappropriate claims, CMS spent about $340 per potentially inappropriate case of OPT for wet AMD.


Retina procedures account for all of the nearly $8 million for services exceeding LCD limitations

Total spending for  retina procedures that exceeded LCD limitations  amounted to $7,945,647, which equates to 36% of total potentially inappropriate spending and only 0.1% of total ophthalmology spending in 2012. The OIG sliced this spending segment further based on whether the potentially inappropriate spending was associated with either more anti-VEGF (specifically, Lucentis)  injections or wet-AMD diagnostic testing than permitted under an LCD.

Claims linked to injections exceeding the limitations of an LCD were associated with $4,123,516 in potentially inappropriate spending. These claims account for about 52% of spending in this segment, 19% of total potentially inappropriate spending, and 0.05% of total ophthalmology spending. 

Likewise, claims linked to more-frequent wet-AMD diagnostic testing than permitted under an LCD were linked to $3,822,131 in potentially inappropriate spending. The $3,822,131 equals 48% of spending in this segment, 17% of total potentially inappropriate spending, and 0.05% of total 2012 ophthalmology spending.


2 MACs responsible for a disproportionate share of potentially inappropriate payments

In 2012, there were 11 MACs associated with some level of potentially inappropriate spending for ophthalmology services. However, First Coast Service Options (FCSO), the MAC for Florida, and Wisconsin Physician Services (WPS), the MAC for most of the Midwest, were responsible for a significant portion of inappropriate payments.

At $9 million, FCSO and WPS were responsible for nearly 40% of all potential inappropriate payments; these 2 of the 11 MACs managed almost 26% of total ophthalmology claims in 2012, with FCSO responsible for about 10% of claims and WPS about 16%.

The OIG noted that FCSO and WPS are also 2 of the MACs that establish additional limitations for anti-VEGF treatments in their LCDs. The report concludes that these 2 MACs may not be appropriately enforcing their own coverage policies.


OIG recommends more stringent claims monitoring and recoupment efforts

The OIG concludes that ophthalmology services are vulnerable to fraud and abuse, and makes 2 recommendations to CMS for better exerting national and local oversight and enforcement:

  1. Implement additional claims-processing edits or improve existing edits to ensure claims are paid appropriately.
  2. Determine the appropriateness of ophthalmology claims identified in the OIG report and take action.

The first recommendation may result in more complicated processes for securing anti-VEGF treatments and AMD testing for your patients. The OIG encourages CMS to have its contractors improve on existing claims edits or implement new ones for anti-VEGF treatments and wet-AMD tests. In response, CMS indicates it will examine the existing medically unlikely edits (MUEs) for ophthalmology services and consider developing additional MUEs to prevent cases from slipping through the cracks. 

The second recommendation has more direct implications for you: the OIG proposes that CMS consider recoupments of inappropriate payments. It is likely that in many cases—especially for the retina-specific claims identified by OIG—you have already gone through a time-consuming process to get the service approved. This recommendation may result in an additional burden to prove the claim and treatment were medically necessary. CMS has indicated it plans to review these claims and determine the best course of action. The OIG has also asserted that CMS could engage in additional provider education or take no action if the billing proves appropriate.

While the recommendations from this report could be acted on by any MAC, it is especially important for ASRS members in Florida, Indiana, Iowa, Kansas, Michigan, Missouri, and Nebraska to monitor for action by their MACs.

If the Medicare contractor for your area requests a recoupment or other action on the basis of this OIG analysis, ASRS wants to know. Please contact us to tell us your story.

Published January 2015