Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
M P
  EDICARE  AID 
 
$22 M 2012
  ILLION IN   FOR 
 
P
  OTENTIALLY 
 
I
NAPPROPRIATE 
 
 
O C  
PHTHALMOLOGY  LAIMS 
 
Suzanne Murrin  
Deputy Inspector General for 
Evaluation and Inspections 
 
December 2014 
OEI-04-12-00281   
   
EXECUTIVE SUMMARY:  MEDICARE PAID $22 MILLION IN 2012 FOR 
POTENTIALLY INAPPROPRIATE OPHTHALMOLOGY CLAIMS  
OEI-04-12-00281 
 
WHY WE DID THIS STUDY 
 
Medicare paid approximately $8.2 billion in 2012 to screen for, diagnose, evaluate, or 
treat cataracts, wet age-related macular degeneration (wet AMD), and glaucoma.  
Medicare uses a combination of national and local coverage requirements to determine 
whether it will cover services for these conditions.  However, recent investigations have 
found that some ophthalmology services for these conditions are vulnerable to fraud, 
waste, and/or abuse. 
 
HOW WE DID THIS STUDY  
 
We reviewed Medicare claims data from 2012 and identified approximately 49 million 
claims that 46,456 providers submitted for screening for, diagnosing, evaluating, or  
treating cataracts, wet AMD, and glaucoma.  We also reviewed the Medicare coverage 
database and identified 4 national requirements and 2 local coverage requirements that 
specified when Medicare should and should not cover certain ophthalmology procedures 
associated with these conditions.  Then we analyzed these claims to identify those that 
were potentially paid inappropriately based on these requirements.  We did not review the 
medical records for any claims to determine if exceptions to the requirements were 
documented and appropriate.  We also calculated the total amount that Medicare paid 
each provider for these claims, and we determined which contractor paid these claims. 
 
WHAT WE FOUND 
 
Medicare paid $22 million for ophthalmology claims in 2012 that were potentially 
inappropriate, according to national and local coverage requirements.  Specifically, 
$14 million was paid despite the presence of national requirements that were designed to 
prevent these payments.  Similarly, $8 million was paid despite the presence of local 
coverage requirements that were designed to prevent these payments.  Additionally, two 
of eleven Medicare contractors paid a disproportionate amount of the potentially 
inappropriate Medicare payments.     
   
WHAT WE RECOMMEND   
 
We recommend that the Centers for Medicare & Medicaid Services (CMS) (1) implement 
additional claims processing edits or improve existing edits to ensure claims are paid 
appropriately and (2) determine the appropriateness of ophthalmology claims identified 
in this report and take appropriate action.  CMS concurred with both of our 
recommendations.  
   
 
   
TABLE OF CONTENTS 
 
Objective......................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................5 

Finding .........................................................................................................7 

Medicare paid $22 million for potentially inappropriate 

ophthalmology claims in 2012 .........................................................7 

Conclusion and Recommendations ............................................................12 

Agency Comments and Office of Inspector General Response .....14 

Appendix....................................................................................................15 

A:  The Numbers and Dollar Amounts of Claims Paid Beyond 

Limitations Established in Each LCD, 2012 ..................................15 

B: The Number and Dollar Amount of Claims Paid Beyond Each 

of the Limitations Established in LCDs, 2012 ...............................16 

C: Agency Comments  ...................................................................17 

Acknowledgments......................................................................................19 

 
   
   
OBJECTIVE 
To determine the extent to which Medicare payments for ophthalmology 
claims in 2012 were potentially inappropriate. 
BACKGROUND 
In 2012, Medicare paid approximately $8.2 billion for all services that 
screen for, diagnose, evaluate, or treat cataracts, wet AMD, and 
glaucoma.1  Recent investigations have found that certain ophthalmology 
services are vulnerable to fraud, waste, and/or abuse.  For example, in 
2011, an ophthalmologist in Philadelphia was convicted for submitting 
$4.5 million in fraudulent claims, most of which were for diagnostic or  
evaluation services.  Additionally, in 2013, an ophthalmologist in New 
Jersey was convicted of reusing single-use vials of Lucentis, an expensive 
ophthalmology biologic, from 2008 to 2009. 
Medicare Requirements for Ophthalmology Services  
Medicare uses a combination of national and local coverage requirements 
to determine whether certain ophthalmology services are covered.  
National requirements are created at the Federal level and apply to all 
Medicare beneficiaries and claims processing contractors.2  In the absence  
of specific national requirements, claims processing contractors may 
create their own local coverage requirements about what services to cover.   
The most common local coverage requirements are local coverage 
determinations (LCDs), which are contractor decisions about whether to 
cover particular services in their respective jurisdictions.3  Medicare may 
still pay for claims that do not meet the specifications outlined in national 
or local coverage requirements if additional documentation adequately 
explains the medical need for the claim.    
Medicare covers procedures to screen for, diagnose, evaluate, or treat 
many eye conditions.  However, the three eye conditions for which 
Medicare pays the most each year are cataracts, wet AMD, and glaucoma.  
____________________________________________________________ 
1 Medicare Part B covers ophthalmology services provided  by licensed specialists, 
including ophthalmologists and optometrists.  Social Security Act,   1832(a)(1); Centers 
for Medicare & Medicaid Services (CMS), Medicare Benefit Policy Manual, Pub.  No.  
100-02, ch. 15,   30.4. Medicare claims identify the specialties of  providers by  using  
codes for those specialties. 
2 Social Security Act,  1862(a)(1)(A), 1862(l),  1869  (f)(1)(B); CMS,  Medicare  
National Coverage Determinations Manual, Pub. No. 100-03, Foreword. 
3 Social Security Act,  1862(a)(1)(A), 1862(l), 1869(f)(2)(B); CMS, Medicare  
Program Integrity Manual, Pub. No. 100-08, ch. 13,  13.1.3.  A single claims processing 
contractor may be responsible for more than  one jurisdiction and apply a single LCD 
across more than  one of its jurisdictions. 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  1 
   
   
In 2012, Medicare paid approximately $8.2 billion to screen for, diagnose, 
evaluate, or treat these conditions. 
Cataracts. Medicare paid approximately $3.5 billion in 2012 for services  
that screen for, diagnose, evaluate, or treat cataracts, the leading cause of 
blindness in the world.4  Medicare covers many services that diagnose or 
evaluate cataracts. However, it has a national requirement stating that it 
will not routinely cover more than one comprehensive eye examination 
and scan for beneficiaries whose only diagnosis was cataracts.5  
Medicare also covers several services that treat cataracts, including 
cataract surgeries.  Cataract surgeries remove the poorly functioning 
natural lens of an eye and replace it with a synthetic lens.  It is medically 
impossible to perform more than one cataract surgery on the same eye 
because an eyes natural lens will never grow back.  Medically impossible 
services should be denied as not being reasonable and necessary. 
Wet AMD. Medicare paid approximately $2.2 billion in 2012 for services  
that screen for, diagnose, evaluate, or treat wet AMD.  This disease is the 
leading cause of severe vision loss in people over age 65 in the United 
States. Medicare covers several services that diagnose or evaluate wet 
AMD, including fluorescein angiographies,6 but it does not have any 
national requirements that place specific limits on these services.  
However, some claims processing contractors have LCDs limiting the 
number of these diagnostic or evaluation services for which a provider 
may bill annually.7  
Medicare also covers several services that treat wet AMD, with the most 
common being the injection of the biologic Lucentis, which goes directly 
into the eye.  In 2012, Medicare paid an average of $2,013 for each full 
Lucentis injection. Medicare does not have a national requirement 
specifically limiting this injection; however, the claims processing 
contractors for six jurisdictions have LCDs specifying that Lucentis 
____________________________________________________________ 
4 National Institutes of  Health, Leading Causes of Blindness, NIH Medline Plus. 
Volume 3, Number 3, Summer 2008. 
 
5 CMS, National Coverage Determinations Manual, Pub. No. 100-03, ch. 1,  10.1.  

Claims for additional exams are denied as not reasonable and necessary unless there is an 

additional diagnosis and the medical need for the additional exam is fully documented.  

6 Fluorescein angiography is an eye test that  uses a special dye and camera to look at 
blood flow in the retina and choroid, the two layers in the back of the eye. 
7 For example, L27584 states that fluorescein angiographies are considered  medically 
necessary no more than nine times per eye per year and that claims exceeding this  
frequency will be suspended and reviewed  for medical necessity.  CMS, Local Coverage  
Determination (LCD) for Ophthalmic Angiography (Fluorescein and  Indocyanine Green)  
(L27584), Palmetto GBA.  These requirements indicate that the additional exams are 
denied as not reasonable and necessary unless the medical need for the additional exams 
is fully documented. 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  2 
   
   
injections are not covered more frequently than once per month per eye.8   
To support the monthly limit on Lucentis injections, these LCDs cite the 
Food and Drug Administration (FDA)-approved dosing guidelines on the 
biologics label.  The FDA guidelines state that injections should be 
administered between once monthly and once every 3 months.9  
Another service that treats wet AMD, ocular photodynamic therapy, is a 
process with two steps.  These steps are billed separately, but they must be 
performed within 30 minutes of one another.10  Because both steps must 
be performed for the procedure to work properly, Medicare has a national 
requirement stating that it covers each step only when both steps are 
performed on the same date.11  
Glaucoma. Medicare paid approximately $1.3 billion in 2012 for services  
that screen for, diagnose, evaluate, or treat glaucoma, which is a leading 
cause of blindness in the United States.12   A national requirement states 
that Medicare covers either of two types of screening services once every 
12 months for beneficiaries at high risk for glaucoma.13  
Medicare Claims Processing Contractors  
CMS uses contractors to process and pay for services provided to 
beneficiaries in the Medicare program.14   The scope of each claims  
processing contract covers a specific jurisdiction (e.g., States) and one or 
more claim type.  Claim types include Part A claims, Part B claims, 
durable medical equipment, and home  health and hospice claims.  Some of 
these contractors are awarded and administer multiple contracts. 
 ____________________________________________________________ 
8 Three claims  processing contractors, responsible for six jurisdictions, have a total of
  
three LCDs specifying limitations on Lucentis injections.  The LCDs indicate that the 

additional Lucentis injections are denied  as not reasonable and necessary unless the 

medical need for the additional injections is fully documented. 

9 FDA,  Lucentis (ranibizumab injection) Intravitreal Injection, Initial US Approval:  

2006.  US BLA (BL125156) Ranibizumab Injection.  For example, CMS, Local 

Coverage Determination (LCD) for Ranibizumab (Lucentis)  (L29266), First Coast 

Service Options, Inc., June 14, 2011. 

10 FDA,  VisudyneTM (verteporfin for injection) US  package insert, April 7, 2000. 

11 CMS, National Coverage Determinations Manual, Pub.  No. 100-03, ch. 1,   80.2. 

12 National Institutes of  Health, Leading Causes of Blindness, NIH Medline Plus. 

Volume 3, Number 3, Summer 2008. 
 
13 CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 15.  280.1. 

14 CMS has completed the process of  replacing all other claims processing  contractor
  
types, which included fiscal intermediaries, carriers, and regional  home health
  
intermediaries, with Medicare Administrative Contractors (MAC).  Section 911 of  the 
 
Medicare Prescription Drug, Improvement, and  Modernization Act  of 2003, Public  Law 

108-173, expanded CMSs authority to contract with entities such as MACs.   

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  3 
   
   
The primary goal of each claim processing contractor is to appropriately  
process and pay Medicare claims.15  Because of the large number of claims  
that contractors must process, they cannot manually review every claim  
submitted by providers.  Instead, contractors take two main types of  
actions to prevent inappropriate payments:  (1) medical review of selected 
claims and (2) provider outreach and education.  Medical review actions 
include identifying claims  for review and determining whether they meet 
Medicare coverage criteria, implementing automated prepayment edits,16  
and developing local coverage requirements.  Provider outreach and 
education is provided through a variety of media, such as articles, 
conference calls, and Web-based training.17  
Related OIG Work  
OIG has previously found vulnerabilities in Medicare payments for 
ophthalmology services.18  For example, OIG found that Medicare 
inappropriately paid $97.6 million in 2005 for evaluation and management 
services that were paid separately from global eye surgeries.19    
Other OIG work has found that Medicare paid providers substantially 
more for treating wet AMD with the expensive biologic Lucentis instead 
of other biologic treatments that are similarly effective.20  For example, 
OIG found that in 2008 and 2009, Medicare Part B would have saved 
$1.1 billion if it had reimbursed all Lucentis injections at the rate of a 
cheaper alternative biologic.21    
Additionally, OIG is currently conducting a study to identify and describe 
providers with questionable billing for ophthalmology services from 
 ____________________________________________________________ 
15 CMS, Medicare Fee-for-Service 2011 Improper Payments Report, p. 6.  Accessed at 
http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-
Programs/CERT/Downloads/2011-Medicare-FFS-Improper-Payment-Report-.pdf on  
September 3, 2014. 
16 Edits are coded into the claims payment system to automatically deny all or part of a 
claim or suspend all or  part  of  a claim for manual review.  CMS, Medicare Program 
Integrity Manual, ch. 3.  3.2, and ch. 7.  7.2.8.1.  
17 CMS, Medicare Contractor Beneficiary and Provider Communications Manual, 
ch. 6.  20. 

18 OIG,  Fletcher Allen  Health Care Did Not Always Bill Correctly for Evaluation  and 
 
Management  Services Related to Eye Injection Procedures, A-01-11-00515, May 2012; 

OIG,  Prevalence and Qualifications of Nonphysicians Who Performed Medicare 

Physician Services, OEI-09-06-00430, August 2009. 

19 OIG,  Nationwide Review of Evaluation and  Management Services Included in  Eye and
  
Ocular Adnexa Global Surgery Fees for Calendar Year 2005, A-05-07-00077, 

April 2009. 

20 OIG,  Medicare Payments for Drugs Used to Treat Wet Age-Related Macular 
Degeneration, OEI-03-10-00360, April 2012. 

21 OIG,  Review of Medicare Part B Avastin and Lucentis Treatments for Age-Related 

Macular Degeneration, A-01-10-00514, September  2011.  
 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  4 
   
   
2012.22   The report will also determine the extent to which Lucentis was 
billed to Medicare in 2012. 
METHODOLOGY 
Data Collection and Analysis 
We analyzed claims data for ophthalmology services to identify those that 
Medicare potentially paid inappropriately based on national or local 
coverage requirements.  Each Medicare-allowed amount is composed of 
the Medicare Part B responsibility (80 percent) and the beneficiarys 
responsibility (20 percent).23   Throughout this report, when we refer to the 
dollar amount that Medicare paid for each service, we are referencing 
the Medicare-allowed amount for each service.  
We analyzed 100 percent of paid claims for ophthalmology services in 
2012 from CMSs National Claims History (NCH) Carrier File.  This 
included approximately 49 million paid claims billed by 46,456 providers  
in 2012. Additionally, because Medicare covers glaucoma screening 
services only once every 12 months for beneficiaries at high risk for 
glaucoma, we analyzed 100 percent of paid claims for glaucoma screening 
exams in 2011 from NCH.  This included 24,772 paid claims billed by 
847 providers in 2011. 
National Requirements. To determine which claims were potentially paid  
inappropriately, according to four national requirements, we analyzed all 
ophthalmology claims data to identify those for: 
(1)  additional cataract diagnostic tests billed as being performed in 2012, 
for beneficiaries whose only diagnosis was cataracts and who had 
already had cataract diagnostic tests in 2012; 
(2)  additional cataract surgeries billed for the same eye in the same year; 
(3)  ocular photodynamic therapy to treat wet AMD in which both steps of 
the treatment were not billed as being performed on the same date; or 
(4)  glaucoma screening tests billed for beneficiaries who had already been 
screened for glaucoma within the previous 12 months (including 
2011 claims, as needed). 
We determined the number of claims billed with these characteristics, and 
we calculated the total amount that Medicare paid each provider for claims  
with these characteristics.  We also determined which contractors paid 
claims with these characteristics.   
____________________________________________________________ 
22 OEI-04-12-00280, in  progress. 
23 Medicare Part  B also required a deductible  of  $99.90  per month in 2012.  
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  5 
   
   
Local Coverage Requirements. We first reviewed claims processing 
contractors LCDs to identify requirements regarding services that screen 
for, diagnose, evaluate, or treat cataracts, wet AMD, and glaucoma.  We  
identified 21 LCDs, all of which concerned services related to wet AMD.24   
For each of these LCDs, we identified the unique limits stated in the LCD.  
For example, some LCDs allowed up to four fluorescein angiographies per 
eye per year, while others allowed up to nine.  We also identified the dates 
when the LCDs were active, the contractor jurisdictions that were using 
those LCDs, and the providers in those jurisdictions. 
To determine which claims were potentially paid inappropriately, 
according to local coverage requirements, we limited our analysis to only 
those claims to which the LCDs applied.25   We identified claims with these 
characteristics: 
1)   Lucentis injections to treat wet AMD that were billed more frequently 
than the LCD-established limits (28 days), or 
2)   tests to diagnose wet AMD that were billed more frequently than 
LCD-established limits.  
We determined the number of claims billed with these characteristics, and 
we calculated the total amount that Medicare paid each provider for claims  
with these characteristics. We also determined which contractors paid each  
of these claims.   
Limitations 
We did not review medical records for any claims in this report.  Some  
claims for cataract diagnostic exams, wet AMD diagnostic exams, or 
Lucentis injections may have had documentation supporting the need for 
these procedures and, therefore, would be allowable by the national or 
local coverage requirement. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
____________________________________________________________ 
24 See Appendix A for the list of  21 LCDs and the dollar amount  of claims that Medicare 
potentially paid inappropriately. 

25 OEI-04-12-00280, in  progress, will determine the extent to which  providers bill 

unusually high for Lucentis injections and tests to  diagnose wet AMD in  jurisdictions 

without these LCDs.  

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  6 
   
   
FINDINGS 
Medicare paid $22 million for potentially inappropriate 
ophthalmology claims in 2012    
According to national and local coverage requirements, Medicare paid 
approximately $22 million for potentially inappropriate ophthalmology 
claims in 2012.  Medicare paid these claims despite national or local 
coverage requirements that were designed to prevent their payment.  
Overall, two of eleven contractors paid a disproportionate amount of this 
$22 million for ophthalmology claims. 
In total, Medicare paid 46,456 providers for all services to screen for,  
diagnose, evaluate, or treat cataracts, wet AMD, and glaucoma in 2012.  
Almost all of these providers received either no potentially inappropriate 
Medicare payments (74 percent) or received less than $9,999 in potentially 
inappropriate Medicare payments (25.5 percent).  Table 1 provides the 
number and percentage of providers by dollar ranges of potentially 
inappropriate Medicare payments for ophthalmology claims. 
Table 1.  Number of Providers With Dollar Ranges of Potentially Inappropriate Medicare Payments 
for Ophthalmology Claims, 2012  
Dollar Ranges of Payments 
Number of Providers   Percentage of Providers  
for Claims  
$0  34,383   74.0%  
$1$999    7,677   16.5%  
$1,000$9,999  4,159   9.0%  
$10,000$99,999  225  0.5%  
$100,000 or more   12  <0.1% 
   Total   46,456   100%  
Source:  OIG analysis of NCH file.   
 
For example, 12 providers received between $100,000 and $1.5 million 
for ophthalmology claims that were potentially inappropriate in 2012.  
Among these 12 providers, all received payments that local coverage 
requirements were designed to prevent, but only 1 received payments that 
national requirements were designed to prevent.  Fourteen percent 
($3 million of $22.3 million) of the total amount Medicare potentially paid 
inappropriately was for claims  submitted by these 12 providers. 
Medicare paid $14 million for ophthalmology claims that were 
potentially inappropriate according to national requirements  
Medicare paid $14.3 million in 2012 for 68,837 ophthalmology claims  
despite national requirements designed to prevent payment for these 
claims.  These four national requirements concerned ophthalmology 
services that screen for, diagnose, evaluate, or treat cataracts, wet AMD, 
and glaucoma in 2012.  Table 2 shows the payment amount, number of 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  7 
   
   
claims, and number of providers by the four national requirements we 
analyzed.  
Table 2.   Potentially  Inappropriate Medicare Payments According to National Requirements, 2012 
Medicare  Number of   Number of  
National Requirement   
Payment*   Claims   Providers**  
Claims for additional cataract surgeries for the same 
$8,564,392  10,560   4,548  
eye in 2012  
Claims for additional cataract diagnostic tests for 
beneficiaries whose only diagnosis was cataracts and  $5,223,294  52,547   8,501  
who had already  had cataract diagnostic tests in 2012 
Claims for glaucoma screening tests for beneficiaries 
$322,175  5,055   266 
more than once within a 12-month period  
Claims for ocular photodynamic therapy to treat wet 
AMD in which both steps of treatment were not billed  $228,755  675  269 
as performed on the same day in 2012  
   Total   $14,338,012   68,837   11,168  
Source:  OIG analysis of 2012 NCH file. 

*Column does not sum to total due to rounding. 

**Column  does not sum to total  because some providers had potentially inappropriate  claims across multiple national requirements. 
 
 
It is medically impossible to have more than one cataract surgery per eye  
because the initial surgery removes the eyes lens.  However, Medicare 
paid approximately $8.6 million for 10,560 cataract surgeries on eyes that 
already had a cataract surgery in 2012.  Ninety-three percent of providers 
(4,221 of 4,548) billing for additional cataract surgeries on the same eye in 
2012 did so for 5 or fewer claims.  However, 7 providers billed for 20 or 
more cataract surgeries for eyes that already had cataracts removed in 
2012, and Medicare paid these 7 providers a combined total of $172,340 
for such surgeries.  This includes one provider whom Medicare paid 
$59,455 for 69 surgeriesthe most of any provideron eyes that already 
had cataracts removed. 
Also, Medicare does not routinely cover more than one cataract diagnostic 
test for patients whose only diagnosis is cataracts.  However, Medicare 
paid approximately $5.2 million for 52,547 cataract diagnostic exams on 
beneficiaries whose only diagnosis was cataracts and who had already had 
a cataract diagnostic exam and scan in 2012.  The majority of providers 
(7,930 of 8,501) that billed for this type of exam did so for fewer than 20 
diagnostic claims in 2012.  However,  Medicare paid one provider $20,108 
for 260 additional cataract diagnostic services, the most of any provider.  
Medicare paid $8 million for ophthalmology claims that were 
potentially inappropriate according to local coverage 
requirements 
Medicare paid $7.9 million in 2012 for 25,583 ophthalmology claims  
despite the presence of 21 LCDs, which stated that these claims should not 
have been paid. These LCDs covered two types of coverage requirements 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  8 
   
   
regarding services that diagnose or treat wet AMD.  Table 3 shows the 
payment amount, number of claims, and number of providers by the two 
requirements we analyzed.  Also, see Appendixes A and B for the number 
and dollar amount of claims paid beyond the limitations established in 
these 21 LCDs. 
Table 3.  Potentially Inappropriate Medicare Payments According to Local Coverage Requirements, 2012  
Medicare  Number of   Number of  
Local Coverage  Requirement  
Payment*   Claims   Providers*  
Claims for Lucentis injections more frequently than  
$4,123,516  2,019   271 
contractor limits permitted in 2012 
Claims for tests to diagnose wet AMD more frequently 
$3,822,131  23,564   1,166 
than contractor limits permitted in 2012  
   Total   $7,945,647   25,583   1,354  
Source:  OIG analysis of 2012 NCH file. 

*Column does not sum to total because some providers potentially inappropriate claims across multiple local coverage requirements. 

 
Three of the twenty-one LCDs used the FDA-approved dosing guidelines 
to establish every 28 days per eye as the highest frequency at which 
providers can bill for Lucentis injections to treat wet AMD.  However,  
Medicare paid providers in areas covered by these LCDs approximately 
$4.1 million for 2,019 Lucentis injections that were billed for as having 
been performed sooner than 28 days from a prior Lucentis injection on the 
same eye.  Medicare paid a combined total of $1 million to six providers  
for Lucentis injections exceeding this LCD limit.  This includes one 
provider whom Medicare paid $253,093 for 127 Lucentis injections that 
were billed in excess of this limit in 2012.  Additionally, Medicare paid a 
total of $267,834 to six individual providerswho together operated a 
single surgical groupfor Lucentis injections that exceeded this limit.  
Medicare paid each of these providers between $20,000 and $105,000 for 
such Lucentis injections.  
The remaining 18 of the 21 LCDs established limits on the frequency of 
billing for tests to diagnose wet AMD.  Overall, Medicare paid 
approximately $3.8 million for 23,564 claims beyond the limitations 
established by these LCDs.  These 18 LCDs established 9 different 
limitations beyond which the claims processing contractors determined 
that Medicare should not cover diagnostic tests without additional 
supporting documentation.26  For example, some LCDs limit the number 
of fluorescein angiographies in a calendar year to four per beneficiary 
diagnosed with wet AMD.  However, Medicare paid $1.4 million to 
1 provider for more than 4 fluorescein angiographies for each of 516 such 
____________________________________________________________ 
26 For these nine different limitations, see Specific Limitation column in the table in  
Appendix B.   Depending on  the procedure type and the LCD, these limitations range  
from 2 procedures allowed per eye annually to 12 procedures per eye annually. 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  9 
   
   
beneficiaries in 2012, the highest dollar amount of potentially 
inappropriate claims paid to any provider.  On average, this provider billed 
for 14 fluorescein angiographies for each of its beneficiaries diagnosed 
with wet AMD in 2012.  However, the majority of providers (1,034 of 
1,166) submitting at least one potentially inappropriate claim to diagnose 
wet AMD did so for 20 or fewer total claims in 2012. 
Two of eleven contractors paid a disproportionate amount of 
potentially inappropriate Medicare payments  
Overall, Medicare paid a total of $22.3 million for 94,420 ophthalmology 
claims that were potentially inappropriate according to national and local 
coverage requirements.  Two Medicare contractors paid $9 million for 
27,851 of these ophthalmology claims.  This amounts to 40 percent of all 
potentially inappropriate payments for ophthalmology claims. However,  
these contractors paid only about a quarter of all payments for 
ophthalmology claims in 2012.  See Table 4 for the dollar amount of 
ophthalmology claims that were potentially paid inappropriately and the 
total dollar amount of ophthalmology claims paid by each contractor.  
Table 4.  Dollar Amount of  Ophthalmology Claims That Were Potentially Paid Inappropriately  According  to National  
and Local Coverage Requirements, by  Contractor, 2012  
Percentage of  
Potentially   Percentage of  
Potentially   Overall Medicare 
Contractor  Inappropriate  Overall Medicare 
Inappropriate  Payments  
Medicare Payments  Payments 
Medicare Payments 
Wisconsin Physicians 
$5.7 million   26%  $1.3 billion   16% 
Services  
First Coast Service Options  $3.3 million   15%  $0.8 billion   10% 
Palmetto GBA   $3.1 million   14%  $1.5 billion   19% 
Cahaba GBA   $2.3 million   11%  $0.6 billion   7% 
Novitas Solutions  $2.2 million   10%  $1.2 billion   15% 
National Government 
$1.4 million   6%  $0.8 billion   9% 
Services  
Trailblazer Health Enterprises   $1.4 million   6%  $0.6 billion   8% 
CGS Administrators   $1.2 million   5%  $0.3 billion   4% 
Noridian Administrative 
$1.0 million   5%  $0.6 billion   7% 
Services  
NHIC Corporation  $0.5 million   2%  $0.3 billion   4% 
Pinnacle Solutions  $0.2 million   1%  $0.1 billion   1% 
Total*  $22.3 million   100%   $8.2 billion   100%  
Source:  OIG analysis of 2012 NCH file. 
*Columns may not sum to total due to  rounding. 
 
The two contractors that paid the highest dollar amount for potentially 
inappropriate ophthalmology claims each had a strong association with a 
different local coverage requirement.  For example, two-thirds 
($2.2 million of $3.3 million) of the dollars that First Coast Service 
Options paid for potentially inappropriate ophthalmology claims were for 
fluorescein angiographies billed for more than 4 times per beneficiary in 
2012. Also, approximately 55 percent ($3.2 million of $5.7 million) of the 
dollars that Wisconsin Physicians Services paid for potentially 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  10 
   
   
inappropriate ophthalmology claims were for Lucentis injections billed for 
more frequently than 28 days on each eye.  Therefore, these two 
contractors may not have appropriately enforced their own requirements to 
prevent these payments. 
 
 
 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  11 
   
   
   
CONCLUSION AND RECOMMENDATIONS 
Medicare paid approximately $8.2 billion in 2012 to screen for, diagnose, 
evaluate, or treat cataracts, wet age-related macular degeneration 
(wet AMD), and glaucoma.  Medicare uses a combination of national and 
local coverage requirements to determine whether it will cover services for 
these conditions. However, recent investigations have found that some  
ophthalmology services for these conditions are vulnerable to fraud, 
waste, and/or abuse. 
Medicare paid approximately $22 million for 94,420 ophthalmology 
claims in 2012 that were potentially inappropriate according to national 
and local coverage requirements.  However, we did not review the medical 
records for any claims to determine if exceptions to the requirements were 
documented and appropriate.  Additionally, two of eleven Medicare 
contractors paid a disproportionate amount of the potentially inappropriate 
Medicare payments.  Our results demonstrate vulnerabilities in Medicares 
oversight and enforcement of its national and local coverage requirements. 
Therefore, we recommend that CMS: 
Implement additional claims processing edits or improve 
existing edits to ensure claims are paid appropriately   
CMS should ensure that it has claims processing edits to appropriately 
enforce national requirements.  Specifically, these edits should prevent 
payment for cataract surgeries on eyes of beneficiaries that have already 
had their natural lens removed. They also should prevent payment for 
ocular photodynamic therapy claims in which both steps of treatment were 
not billed as performed on the same day.   Additionally, these edits should  
identify certain claims and flag them for further review.  This includes 
claims for (1) additional cataract diagnostic tests for beneficiaries whose 
only diagnosis was cataracts and who had already had cataract diagnostic 
tests in the calendar year and (2) claims for glaucoma screening tests for 
beneficiaries that are submitted more than once within a 12-month period.  
Further, CMS should instruct claims  processing contractors to implement 
claims processing edits or improve existing edits to appropriately enforce 
LCDs. These edits should identify certain claims and flag them for further 
review.  This includes claims for (1) Lucentis injections that are billed 
sooner than 28 days after a prior injection on the same eye and (2) claims  
for tests to diagnose wet AMD more frequently than contractor limits 
permit. 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  12 
   
   
Determine the appropriateness of ophthalmology claims 
identified in this report and take appropriate action  
In a separate memorandum, we will refer to CMS for appropriate action 
the claims that we identified as potentially inappropriate.  CMS and/or its 
contractors should assess these claims and if warranted, review medical 
records. After this assessment, CMS should determine and take an 
appropriate course of action. Appropriate actions could include, but are 
not limited to:  (1) recoupment of any inappropriate payments; 
(2) provider education on how to properly bill for ophthalmology services; 
or (3) no action, if billing is determined to be appropriate. 
  
 
   
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  13 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with both of our recommendations.  CMS noted that it is 
pursuing a comprehensive strategy to combat fraud, waste, and abuse in 
Medicare. This includes educating providers on appropriate billing for 
services and improving its centralized  portal that provides contractors and 
law enforcement with access to Medicare data and analytic tools.   
CMS concurred with our first recommendation and described its efforts to 
implement additional or improve existing claims processing edits.  CMS 
stated that it implemented Medically Unlikely Edits regarding  
ophthalmology services in April 2013 and that it will consider developing  
edits to address the additional potential vulnerabilities identified in this 
report. CMS also stated that it will work to enhance the current claims  
processing edits to prevent inappropriate payment for claims.  CMS added 
that it will educate its contractors of the potential vulnerabilities identified  
in the report and encourage them to flag these claims for medical review.  
CMS concurred with our second recommendation and described its plans 
to determine the potential return on investment from a medical record 
review of the claims provided.  Based on the analysis and contractor 
resources, CMS will determine an appropriate number of claims to review.  
Then, it will take action based on the results of that review.  
We support CMSs efforts to address the potential vulnerabilities 
identified in this report.  The full text of CMSs comments is provided in 
Appendix C. 
 
 
   
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  14 
   
   
APPENDIX A 
The Numbers and Dollar Amounts of Claims Paid Beyond 
Limitations Established in Each LCD, 2012 
Number of   LCD 
LCD  State(s)   Medicare Payment*   Providers*   Number of Claims*   Number  
1  IA, IL, IN, KS, MI, MN, MO, NE, WI  $3,157,914  183  1,535   L32013  
2  FL   $2,183,876  56  9,828   L29177  
3  DC, DE, MD, NJ, PA  $877,662  117  5,016   L27497  
4  AL, GA, TN   $868,065  74  437  L30555  
5  KY, OH   $341,367  122  2,003   L31882  
6  CT, NY   $250,171  173  3,388   L25466  
7  KY, OH   $126,421  290  2,297   L31842  
8  AR, CO, LA, MS, NM, OK, TX   $97,537  16  47  L32642  
9  IA, IL, KS, MN, MO, NE, WI   $38,806  440  948  L29971  
10  FL   $3,579  54  80  L29276  
11  PR, VI  $203  1  2  L29429  
12  FL   $46  2  2  L28982  
13  AS, CA, GU, HI, MP, NV  0  0  0  L27584  
14  CT, NY   0  0  0  L28488  
15  DC, DE, MD, NJ, PA  0  0  0  L27479  
16  FL   0  0  0  L28843  
17  PR, VI  0  0  0  L29473  
18  KY, OH   0  0  0  L31897  
19  NC, SC, VA, WV   0  0  0  L31557  
20  PR, VI  0  0  0  L28876  
21  PR, VI  0  0  0  L29105 
  Total   $7,945,647   1,354   25,583    
Source:  OIG analysis of 2012 NCH file and LCDs in Medicare Coverage Database.  

*Column does not sum to total because some providers had potentially inappropriate  claims according to multiple LCDs. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  15 
   
   
APPENDIX B 
The Number and Dollar Amount of Claims Paid Beyond Each 
of the Limitations Established in LCDs, 2012 
Jurisdiction  
Type of  Having   Medicare  Number of   Number of  
Limitation   Specific Limitation   Limitation   Payment*   Providers *   Claims*  
HCPCS code 92235 is not allowed 
more than 4 times per eye per year 
for patients diagnosed with wet 
AMD.27   J09, J12  $2,991,705   142  14,561  
HCPCS code 92250 is not allowed 
more than 2 times per eye per year.   J13, J15  $376,139   463  5,667  
HCPCS codes 92235 and 92240 
are not allowed within 30 days of  
one another on the same eye, 
unless the patient has a second 
diagnosis in addition to wet AMD.  
Limitation to  However, the second diagnosis 
prevent  cannot be diabetic retinopathy.   J01, J11, J15  $341,367   122  2,003  
payment for  HCPCS codes 92235 and 92240 
claims  are not allowed within 30 days of  
indicating that  one another on the same eye, 
providers billed  unless they  are provided on the 
for beneficiaries  same day.   J12  $70,333   48  286 
to have tests to  HCPCS codes 92133 and 92134 
diagnose wet  are not allowed within 28 days of  
AMD more  one another on the same eye for 
frequently than  patients diagnosed with retinal 
contractor- diseases (including wet AMD).  J05, J06  $38,806   440  948 
established  HCPCS codes 92133 and 92134 
limits   are not allowed on the same day for 
the same eye.   J09   $3,625  56  82 
HCPCS codes 92225 and 92226 
are not allowed more than 12 times 
per eye per year  for patients 
diagnosed with wet AMD.   J13, J15  $453   2  18 
HCPCS codes 92235 and 92240 
are not allowed more than 9 times 
per eye per year.   J01, J11, J15  - - -
HCPCS code 92134 is not allowed 
more than 1 time per eye per  
month.  J13, J15  - - -
Limitation to 
prevent 
payment for 
claims 
indicating that 
Lucentis 
injections were  
provided more 
often than 
contractor- HCPCS code J2778 is not allowed 
established  more often than every 28 days per  J04, J05, J06, 
limits   eye diagnosed with wet AMD.   J07, J08, J10  $4,123,516  271  2,019 
 Total   $7,945,647  1,354   25,583  
Source:  OIG analysis of 2012 NCH file and LCDs in Medicare Coverage Database.  

*Column does not sum to total because some providers had potentially inappropriate  claims according to multiple LCDs. 

____________________________________________________________ 
27 Medicare Part B services are  classified and  paid  using Healthcare Common Procedure 
Coding System (HCPCS) codes.  
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  16 
  APPENDIXC 
Agency Comments 
l-4-	
/~~ 
DEPARTMENT OF HEAL'IH & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
Administrator 
Washington, DC 20201 
NOV -7 2014
DATE: 
TO: 	 Daniel R. Levinson 

Inspector General 

FROM: 	 Marilyn Tavenner 

Administrator 

SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Medicare Paid $22 Million in 
2012 for Potentially Inappropriate Ophthalmology Claims," (OEI-04-12-00281) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on this draft report. CMS-is committed to eliminating fraud, waste, and abuse in 
Medicare. 
To combat fraud, waste, and abuse in Medicare, CMS is pursuing a comprehensive strategy 
comprised ofseveral initiatives. Specific to ophthalmology claims, CMS has released 
educational materials on ophthalmological benefits to educate physicians and other providers on 
the coverage and billing requirements for ophthalmological services. The published materials 
specify that glaucoma screening is covered annually and that providers may only bill for cataract 
removal once per eye. 
CMS is continually improving and updating its fraud, waste, and abuse prevention efforts. CMS 
has used authority granted by the Affordable Care Act to establish temporary moratoria on the 
enrollment ofhigh-risk providers in fraud "hot spots." We have also continued making 
improvements and changes to One Program Integrity (One PI), CMS' centralized portal that 
provides CMS contractors and law enforcement with access to Medicare data and analytic tools 
to review the data. In addition, CMS has implemented the Fraud Prevention System (FPS), 
which applies predictive analytic technology on claims prior to payment to identify aberrant and 
suspicious billing behavior. 
The OIG's recommendations and CMS' responses to those recommendations are discussed 
below. 
OIG Recommendation 
Implement additional claims processing edits or improve existing edits to ensure claims are paid 
appropriately 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  17   
   
APPENDIX C 
Agency Comments (Continued) 
 
   
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  18 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Dwayne Grant, Regional 
Inspector General for Evaluation and Inspections in the Atlanta regional 
office, and Jaime Stewart, Deputy Regional Inspector General.  
Evan Godfrey served as the lead analyst for this study.  Central office staff 
who provided support include: Clarence Arnold, Scott Horning, Scott 
Manley, Christine Moritz, and Dave Tawes.  
 
Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281)  19 
   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
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program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
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enforcement authorities.