November 17, 2008

The number of ultrasound services—including the use of ultrasound guidance for peripheral nerve blocks—billed to Medicare and other payers continues to grow rapidly.

HHS’ Office of the Inspector General (OIG) is responsible for auditing the Medicare program and reducing fraud (e.g., improper billing) and abuse (e.g., overutilization). The OIG set its sights on ultrasound procedures, among other medical services, in its 2008 “Work Plan” and it has done so again for 2009.

Often, the OIG’s interest in potential overutilization results from questions or controversies regarding the “medical necessity” for a procedure covered by Medicare. One indicator of uncertain medical necessity is significant variation in utilization. Many anesthesiologists will remember the seminal work of John Wennberg, MD who demonstrated, beginning in the 1980s, significant variation in the rates at which tonsillectomies and other procedures were performed in several Connecticut communities. The variation was startling because it was more readily explained by differences in medical culture and practice styles than by differences in the patients’ heath status.

The OIG evidently suspects a similar physician- rather than patient-based cause for the growth in the volume of Medicare claims for ultrasound. This year, it was been reviewing “services and billing patterns in geographic areas with high utilization of ultrasound services paid under the Medicare Physician Fee Schedule. . . . [W]e will examine service profiles, provider profiles, and beneficiary profiles. (OIG 2008 Work Plan). And in its recently-released Work Plan for 2009, the OIG announced that the review of ultrasound in high-utilization locales would continue.

Anesthesiologists and other pain specialists should take heed. It is more important than ever to establish the medical necessity of each ultrasound service provided. The record should contain adequate documentation to show both the medical necessity for and the quality of the service. Ultrasound guidance for needle placement, CPT™ code 76942 and ultrasound guidance for vascular access (add-on code 76937) both require permanently recorded images. Documentation should include any clinically indicated measurements, a description of the localization process and a written report. The completeness of the documentation will be key to the outcome of any OIG audit.

Another continuing focus of the OIG is the correct designation of place of service. As noted in the 2008 Work Plan, “Medicare pays a physician a higher amount when a service is performed in a non-facility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ASC.” Accordingly, the OIG has announced that in 2009 it will continue trying to “determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments.”

Place of service coding is a potential issue in connection with ultrasound services: if the services are performed in a hospital, surgery center or other facility in which the physician does not own the equipment or employ the technical staff, the -26 modifier must appear on the claim to indicate that the professional service only was provided.

Download the full OIG 2009 Work Plan

We invite ABC clients with questions about billing correctly for ultrasound services or about designating the correct place of service to consult with their account managers.   If you are not a client of ABC and would like further clarification please email us at