Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
I   P
MPROPER  AYMENTS FOR 
 
  E
VALUATION AND 
 
M  S
ANAGEMENT  ERVICES 
 
C M B  
O  ST  EDICARE  ILLIONS 
 
2010 
IN 
 
Daniel R. Levinson   
Inspector General  
 
May 2014 
OEI-04-10-00181   
   
EXECUTIVE SUMMARY:  IMPROPER PAYMENTS FOR EVALUATION AND 
MANAGEMENT SERVICES COST MEDICARE BILLIONS IN 2010  
OEI-04-10-00181 
 
WHY WE DID THIS STUDY 
 
Evaluation and management (E/M) services are visits performed by physicians and nonphysician 
practitioners to assess and manage a beneficiarys health.  Medicare paid $32.3 billion for E/M 
services in 2010, representing nearly 30 percent of Part B payments that year.  In 2012, the Office 
of Inspector General (OIG) reported that physicians increased their billing of higher level codes, 
which yield higher payment amounts, for E/M services in all visit types from 2001 to 2010.  The 
Centers for Medicare & Medicaid Services (CMS) found that E/M services are 50 percent more 
likely to be paid for in error than other Part B services; most improper payments result from errors 
in coding and from insufficient documentation.   
 
HOW WE DID THIS STUDY  
 
We conducted a medical record review of a random sample of Part B claims for E/M services from 
2010, stratifying claims from physicians who consistently billed higher level codes for E/M services 
(i.e., high-coding physicians) and claims from other physicians.  Certified professional coders 
determined whether the E/M service documented in the medical record for each sampled claim was 
correctly coded and/or sufficiently documented.   
 
WHAT WE FOUND 
 
In total, Medicare inappropriately paid $6.7 billion for claims for E/M services in 2010 that were 
incorrectly coded and/or lacking documentation, representing 21 percent of Medicare payments for 
E/M services that year. We found that 42 percent of claims  for E/M services in 2010 were 
incorrectly coded, which included both upcoding and downcoding (i.e., billing at levels higher and 
lower than warranted, respectively), and 19 percent were lacking documentation.  Additionally, we 
found that claims from high-coding physicians were more likely to be incorrectly coded or 
insufficiently documented than claims from other physicians.   
 
WHAT WE RECOMMEND 
 
We recommend that CMS (1) educate physicians on coding and documentation requirements for 
E/M services, (2) continue to encourage contractors to review E/M services billed for by high-
coding physicians, and (3) follow up on claims for E/M services that were paid for in error.  CMS 
concurred with our first recommendation, did not concur with our second recommendation, and 
partially concurred with our third recommendation 
   
   
TABLE OF CONTENTS 
 
Objective......................................................................................................1 

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

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

Findings......................................................................................................11 
 
Fifty-five percent of claims for E/M services were incorrectly 
 
coded and/or lacking documentation in 2010, resulting in 

$6.7 billion in improper Medicare payments .................................11
  
Claims for E/M services billed for by high-coding physicians were 

more likely to be incorrectly coded or insufficiently documented 

than those billed for by other physicians .......................................14 

Conclusion and Recommendations ............................................................16 

Agency Comments and Office of Inspector General Response .....18 

Appendixes ................................................................................................20 

A: Components Used To Determine the Level of an Evaluation 

and Management Service ...............................................................20 

B: Additional Information on Sample Selection and     

Subgrouping...................................................................................23 

C: The Comprehensive Error Rate Testing Program and This
  
Evaluation ......................................................................................27 

D: Sample Sizes, Point Estimates, and Confidence Intervals of 

Claims for Evaluation and Management Services .........................29 

E: Sample Sizes, Point Estimates, Confidence Intervals, and 

Results of Statistical Tests of Claims for Evaluation and 

Management Services, by Stratum  ................................................32 

F: Sample Sizes, Point Estimates, Confidence Intervals, and 

Results of Statistical Tests of Claims for Evaluation and 

Management Services, by Subgroups ............................................35 

G: Agency Comments  ...................................................................37 

Acknowledgments......................................................................................40 

   
   
OBJECTIVE 
To determine the extent to which evaluation and management (E/M) 
services in 2010 were incorrectly coded and/or lacking documentation. 
BACKGROUND 
E/M services are visits covered under Medicare Part B and performed by 
physicians and nonphysician practitioners (hereinafter, collectively 
referred to as physicians) to assess and manage a beneficiarys health.1   
Medicare paid $32.3 billion for E/M services in 2010, representing nearly 
30 percent of Part B payments that year.2, 3  E/M services are divided into 
broad categories that reflect the type  of service, the place of service, and 
the patients status.  These broad categories of E/M services are known as 
visit types. Most visit types are further divided into three to five levels, 
which reflect the complexity of a visit and correspond to Current 
Procedural Terminology (CPT) codes for billing purposes.4, 5  Higher level 
codes within a visit type correspond to increased complexity of the E/M 
service and higher payment rates.6         
In 2012, OIG reported that from 2001 to 2010, physicians increased their 
billing of higher level codes for E/M services in all visit types.7    
Additionally, OIG identified 1,669 physicians who consistently billed for 
the two highest level codes for E/M services in 2010.  Moreover, the 
 
1  Nonphysician  practitioners are health  care providers (e.g., nurse practitioners, clinical 

nurse specialists, and physician assistants) who practice either in collaboration  with a 

physician or  under the supervision of a physician.   

2  Office of Inspector General (OIG) analysis of the 2010  National Claims History Part B 

file. 
 
3  Medicare-allowed amounts are 100 percent  of the payment made to a provider (e.g., 

a physician) by both Medicare and the beneficiary.  Medicare pays  80  percent of allowed 

charges, and the beneficiary is responsible for the remaining 20  percent.
 
4 Certain visit types do  not  have complexity levels.  These visit types are hospital 

observation discharge services (99217), standby services (99360), and  other E/M services 

(99499). 

5  The five character codes and descriptions included in this study are obtained from 
Current Procedural Terminology (CPT), copyright 2009 by the  American Medical 
Association (AMA).  CPT is developed by the AMA as a listing of descriptive terms  
and five character identifying codes and modifiers for reporting medical services 
and procedures.  Any use of CPT  outside of this study should refer to the most  
current version of the Current Procedural Terminology available from AMA.  
Applicable FARS/DFARS apply. 
6  Payment rates for E/M services are set forth by the Medicare physician fee schedule.  

Section  1848(a)(1) of the Social Security Act established this fee schedule as the basis for 

Medicare reimbursement for all physician services, including E/M services, beginning in 
 
January 1992. 

7 OIG, Coding Trends of  Medicare Evaluation and Management Services 

(OEI-04-10-00180), May 2012. 

Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  1 
   
   
Centers for Medicare & Medicaid Services (CMS) has reviewed the 
appropriateness of claims for E/M services through the Comprehensive 
Error Rate Testing (CERT) program.8  In its 2011 CERT report, CMS 
found that E/M services made up a large proportion of Part B improper 
payments and were 50 percent more likely to be paid for in error than 
other Part B services.9  Most of these improper payments for E/M services 
were due to incorrect coding and insufficient documentation.            
Coding of E/M Services 
E/M services must be medically reasonable and necessary, in addition to 
meeting the individual requirements of the CPT code that is used on the 
claim.10, 11  According to CMS, [I]t would not be medically necessary or 
appropriate to bill [for] a higher level of [E/M] service when a lower level 
of service is warranted.12  Physicians are responsible for ensuring that the 
claims they submit to Medicare accurately reflect the E/M services 
provided and the billing levels corresponding to those services.13    
As defined by CPT, the level of an E/M service is determined by seven 
components:  patient history, physical examination, medical 
decisionmaking, counseling, coordination of care, the nature of the 
patients presenting problem(s), and time.  The first three components are 
key in determining the correct code for the E/M service:   
	   Extent of patient history. Physicians use their clinical judgment and 
the nature of the patients presenting problem(s) to determine the depth 
of history needed to complete the service.  A patient history can be 
classified into one of four types, ranging from problem focused to 
comprehensive.   
	   Extent of physical examination. Physicians use their clinical judgment 
and the presenting medical problem(s) to determine the type of  
examination needed.  There are four types of physical examinations,   
ranging from problem focused to comprehensive. 
 	  Complexity of medical decisionmaking. The complexity of medical 
decisionmaking hinges on the number of possible diagnoses or the 
 
8 As a result of the Improper Payments Information Act (IPIA) of 2002, CMS established  
the CERT program to randomly sample and review claims submitted to Medicare. 

9  CMS, Medicare Fee-for-Services 2011 Improper Payments Report, October 2012,  

pp. 3233.  Accessed  at http://www.cms.gov/Research-Statistics-Data-and-
Systems/Monitoring-Programs/CERT/Downloads/MedicareFFS2011CERTReport.pdf on 
 
October 21, 2013.  

10 CMS, Medicare Claims Processing Manual, Pub. 100-04, ch.  12,    30.6.1.A.  

11 Social Security Act  1862(a)(1)(A).  
  
12  CMS, Medicare Claims Processing Manual, Pub. 100-04, ch.  12,    30.6.1.A.  

13 CMS, Evaluation and Management Services Guide, December 2010, p. 4. 
 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  2 
   
   
number of options that must be considered; the amount and/or 
complexity of medical records, diagnostic tests, and other information 
that physicians must obtain, review, and analyze; and the risk of 
significant complications, morbidity, and/or mortality. There are four 
types of medical decisionmaking, ranging from straightforward to high 
complexity. 
For visits that consist predominantly of counseling or coordination of care, 
timerather than the three factors listed aboveis the key factor in 
determining the correct code for the E/M services.14  See Appendix A for 
more detail on the components used to determine the level of an E/M 
service. 
Documentation of E/M Services 
Physicians documentation must support the medical necessity and 
appropriateness, as well as the level, of the E/M service.15, 16  Clear and 
concise medical record documentation is required in order for physicians 
to receive accurate and timely payment for furnished services.17  In the 
medical record, physicians should document the care a patient received 
and pertinent facts, findings, and observations about the patients health 
history.18   The medical record should also be complete and legible and 
include the date and legible identity of the physician who furnished the 
service. Further, Medicare requires that services provided be 
authenticated by the author of the medical record, with either a 
handwritten or electronic signature.19  If the signature in the medical 
record is illegible or missing, CMS asks the physician to attest to his/her 
signature.20  If the physician does not provide this attestation statement, 
CMS then considers the claim to be insufficiently documented. 
 
14  If the level  of  an E/M service is based on counseling and/or coordination of care, the 

total length of time of the encounter should  be documented and the medical record should
  
describe the counseling and/or activities to coordinate care.  CMS, Evaluation and 

Management Services Guide, December 2010, pp. 21 and 25.  

15  For Medicare to consider coverage and payment for any item or service, the 

information submitted by the supplier or provider must corroborate the documentation in 

the beneficiarys medical record and confirm that Medicare coverage criteria have been 
 
met.  CMS,  Medicare Program Integrity Manual, Pub.  100-08, ch. 3,  3.3.2.1.   See also 

Social Security Act   1156(a). 

16  The Social Security Act states that Medicare will not pay for services, including  E/M 

services, unless the provider  has furnished information necessary to support the claim. 
  
Social Security Act   1833(e). 

17  CMS, Evaluation and Management Services Guide, December 2010, p. 3.  
 
18  Ibid. pp. 34.  

19  Stamped signatures are not acceptable.  CMS, Medicare Program  Integrity Manual, 

Pub.  100-08, ch. 3,  3.3.2.4. 

20 Ibid. 
 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  3 
   
   
The documentation in the medical record must also support the type of 
each key component used to determine the appropriate level of E/M 
service. CMS has issued guidelines for physicians to use when 
determining and documenting the appropriate level of an E/M service.  
These guidelines outline what documentation is necessary to include in the 
medical record to support the level of an E/M service.  There are two 
versions of the documentation guidelines, one from 1995 and one from  
1997.21, 22  There are differences between these two versions, the most 
substantial being in the section regarding physical examinations.23   
Physicians can use either version of the documentation guidelines, but not 
a combination of the two, to determine the appropriate level for an E/M 
service.24  However, to document E/M services provided on or after 
September 2013, physicians may use the 1997 Documentation Guidelines  
for an extended history of present illness along with other elements from 
the 1995 Documentation Guidelines.2 5    
Related OIG Work  
This study is part of a larger body of work about E/M services.  The first 
study in this series found that from 2001 to 2010, physicians increased 
their billing of higher level codes for E/M services in all visit types. 26   
Additionally, 1,669 physicians consistently billed for the two highest level 
codes for E/M services in 2010. The second study looked at the adoption 
of electronic health record (EHR) technology, finding that 57 percent of 
physicians who provided E/M services in 2010 used an EHR system at 
their primary practice locations in 2011.27    
In 2006, OIG reported that 75 percent of consultationswhich are one 
type of E/M servicedid not meet Medicare coverage requirements in 
 
21 The full names of these publications are the 1995 Documentation Guidelines for 

Evaluation and  Management Services and the  1997 Documentation Guidelines for 

Evaluation and  Management Services. They can be found online  at http://www.cms.gov/  

Outreach-and-Education/Medicare-Learning-Network-MLN/MLNEdWebGuide/  

Downloads/95Docguidelines.pdf and  http://www.cms.gov/Outreach-and-Education/ 
 
Medicare-Learning-Network-MLN/MLNEdWebGuide/Downloads/97Docguidelines.pdf, 

respectively. 

22  Hereinafter, we refer to these two versions of  documentation guidelines as the 

1995 Documentation Guidelines and the 1997 Documentation Guidelines. 
 
23 CMS, Evaluation and Management Services Guide, December 2010, p. 13. 
 
24 Ibid., pp. 1 and 13. 

25  CMS, FAQ on 1995 & 1997 Documentation Guidelines for Evaluation & Management 
 
Services, September 2013.   Accessed at http://www.cms.gov/Medicare/Medicare-Fee-for-
Service-Payment/PhysicianFeeSched/Downloads/EM-FAQ-1995-1997.pdf on  January 

10, 2014. 
 
26  OIG,  Coding Trends of  Medicare Evaluation and Management Services 

(OEI-04-10-00180), May 2012. 

27 OIG, Use of Electronic Health Record  Systems in 2011 Among  Medicare Physicians 
 
Providing Evaluation and Management  Services (OEI-04-10-00184), June 2012.  

Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  4 
   
   
2001, resulting in $1.1 billion in improper payments.28  OIG also found 
that consultations billed for at the highest level were miscoded 95 percent 
of the time.  In 2010, CMS discontinued paying for CPT codes for 
consultations.29  
METHODOLOGY 
We based this study on a medical record review of a random sample of 
Part B claims for E/M services from 2010.   
Selection of Sample for Medical Review 
Using CMSs National Claims History File, we identified all Part B claims  
for E/M services with a service date in 2010 and a Medicare payment 
amount greater than zero.30   We limited our analysis to E/M services that  
corresponded to visit types with three to five complexity levels.31   We also 
limited our analysis to physicians who had claims for 100 or more E/M 
services in 2010.32  Therefore, our sampling frame consisted of 
369,629,103 claims for E/M services and represented $32.3 billion in 
Medicare payments.  
We grouped claims into two strata defined by physicians coding of E/M 
services. 
 	  Stratum 1 consisted of 828,646 claims from physicians we categorized 
as high-coding physicians. To  identify high-coding physicians, we 
(1) identified physicians whose average code level was in the top 
1 percent of their primary specialty; and (2) from that subset of 
physicians, identified those that billed for the two highest level codes 
for E/M services at least 95 percent of the time.   
 	  Stratum 2 consisted of 368,800,457 claims for E/M services from  
physicians we categorized as other physicians.  These physicians did 
not meet the criteria used to identify high-coding physicians.   
 
28 OIG, Consultations in Medicare:  Coding and Reimbursement (OEI-09-02-00030), 

March 2006.  

29  74  Fed.  Reg. 61738, 6176869 (Nov. 25, 2009).  

30  Typically, a set of services is billed for on one Part B claim; each service is listed as a  

separate line item on that claim.  For the purposes of this  report, we refer to claim line 

items as claims.  

31  The sampling  frame includes claims with CPT codes 9920199205, 9921199215,  

9921899223, 9923199236, 9924199245, 9925199255, 9928199285, 9930499310, 

9932499328, 9933499337, 9934199346, and 9934799350. 
 
32  Claims submitted by  physicians  with  fewer than 100 E/M services represented less 

than  2  percent of Medicare payments in 2010 and 30  percent of all physicians who  billed 

for E/M services. 
 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  5 
   
   
We then selected a stratified simple random sample of 673 claims  
(309 from stratum 1 and 364 from stratum 2).  See Tables B-1 and B-2 in 
Appendix B for further details on this studys sample selection.      
Medical Record Review  
We used a contractor to collect and review for completeness the medical 
records for each sampled claim.   The contractor mailed up to three 
requests to obtain the medical records and telephoned nonresponding 
physicians to ensure they had received the requests.  The final request was 
sent by certified mail, which requires a signature.   
We did not receive medical records for 55 claims:   
 	  We classified 39 of these claims as undocumented errors, either 
because the physician received our request but did not respond to it or  
because the documentation that the physician sent did not contain any 
information relevant to our sampled claim.    
 	  We classified the remaining 16 claims as nonrespondents because we 
did not receive responses and were unable to confirm that the 
physicians had received our requests.33  Three of these claims were 
associated with physicians whose national provider identifiers had 
been deactivated.  
Overall, we received the medical records for, or classified as errors,  657 of 
the 673 sampled claims, for a weighted response rate of 98.6 percent.34   
The response rate for stratum 1 was 96.4 percent,35 and the response rate 
for stratum 2 was 98.6 percent.36  Hereinafter, projections to our 
population and strata are based on these response rates.  Table 1 shows the 
number of sampled claims, respondent claims, and response rate by 
stratum and overall.        
 
33  We  will refer a list of  nonresponding  physicians to CMS.  
34  Overall results  are projectable  to  98.6 percent of the population of Medicare claims for 
E/M services in 2010, representing $31.5 billion of $32.3 billion. 
35  Results for stratum 1 are projectable to 96.4 percent of Medicare claims for E/M 
services billed for by  high-coding physicians, representing $104  million of $108  million.  
36  Results for stratum 2 are projectable to 98.6 percent of Medicare claims for E/M 
services billed for by  other physicians, representing $31.4 billion  of $32.2 billion.  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  6 
   
   
Table 1: Sampled Claims and Response Rate by  Stratum, 2010  
Number of   Number of  
Response 
Stratum  Description   Sampled  Respondent  
Rate  
Claims   Claims  
Claims for E/M services billed for by high-coding 
1  309  298  96.4%  
physicians 
2  Claims for E/M services billed for by other physicians  364  359  98.6% 
 Total   673  657  98.6%  
Source:  OIG analysis of 2010 Part B claims for  outpatient E/M services, 2013.  
We also contracted with three certified professional coders (hereinafter, 
referred to as reviewers), each of whom had experience reviewing claims  
for E/M services. In addition, we contracted with a registered nurse to 
assist with determinations on whether documentation supported medical 
necessity.  The reviewers independently reviewed a set of records and 
consulted with the nurse as needed.  The reviewers completed a 
standardized data-collection instrument that was based on Medicare 
coverage and documentation requirements for E/M services and applied 
relevant local coverage determinations, as appropriate.37  Applying both 
the 1995 and 1997 Documentation Guidelines, reviewers determined the 
appropriate level for an E/M service using whichever version of the 
documentation guidelines resulted in the most advantageous code for the 
physician. We developed the instrument in collaboration with the 
reviewers and tested it on a separate sample of claims.38    
The reviewers conducted the medical review between October 2012 and 
May 2013. The reviewers determined whether the E/M service 
documented in the medical record for each sampled claim was correctly 
coded and/or sufficiently documented.   
	   Reviewers classified sampled claims for E/M services as incorrectly 
coded if the medical record supported a lower or higher level code 
(i.e., miscoded) or if there were other coding errors, such as 
 
37  Medicare  claims  processing contractors develop their own coverage guidelines (i.e.,  
local coverage determinations) regarding medical necessity, if  no national  coverage 
determination  exists.  Section 522 of the Benefits  Improvement and Protection Act of  
2000 defines a local  coverage determination as a decision by a Medicare claims  
processing contractor whether to cover a particular service on an intermediary-wide or  
carrier-wide basis in accordance with section 1862(a)(1)(A) of the Social Security Act 
(e.g., a determination as to  whether the service or item is reasonable and  necessary). 
38  We conducted a preliminary  review  of 10 claims for E/M services to test the 
instrument and to ensure consistency among the reviewers.   These 10 claims were not  
included in  our sample.  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  7 
   
   
documentation supporting a code for a non-E/M service (i.e., wrong 
code) or if the medical record indicated unbundling.39  
 	  Reviewers classified sampled claims  for E/M services as insufficiently 
documented if the medical record (1) did not contain pertinent 
information to support the service provided (e.g., the patients name  
and status, overall condition and diagnosis, and the extent of services 
performed), (2) did not support the medical necessity of the service 
provided, and/or (3) was illegible.40  Reviewers also identified 
sampled claims for E/M services for which the physicians signatures 
were illegible, missing, or unacceptable (e.g., typed name with no 
initials or signature). CMS provides physicians with an opportunity to 
attest to a signature when it is illegible or missing.  Because we did not 
request signature attestations from physicians, claims for E/M services 
with only signature issues were not considered to be in error.41    
Our contractor and reviewers also collected information on whether the 
medical record for the sampled claim was (1) paper or electronic 
(i.e., medical record type) and (2) formatted using the 1995 or  1997 
Documentation Guidelines (i.e., medical record format).  See Tables B-3 
and B-4 in Appendix B for further details on this studys subgrouping. 
Analysis  
We analyzed the information from the medical record review to determine 
the percentage of claims for E/M services in 2010 that were incorrectly 
coded and/or lacking documentation overall, by stratum, and by subgroup.  
For miscoded claims, we compared the original code from the sampled 
 
39  Unbundling is the practice of inappropriately reporting each component of a service 
or procedure instead of reporting the single comprehensive code.  CMS does not allow 
additional payments for separate E/M services  performed by  a physician on  the same  day 
as a procedure, unless the E/M service is significant, is separately identifiable, and is 
above and beyond the usual preoperative and postoperative care associated  with the  
procedure, indicated by modifier 25 on the claim.   We considered claims to be in error if 
modifier 25 was listed on the claim and the  medical record did not support that the E/M 
service was significant, was separately identifiable, and was above and beyond the usual 
preoperative and postoperative care associated with the procedure.       
40  We  did not  request documentation needed to  determine whether guidelines were met  
for incident to and split/shared billing and resident/teaching  physician arrangements.  
As a result, we did not consider these claims to  be in error if certain documentation  was 
missing.  However,  we did consider these claims to be in error if the errors were 
discernible.  For example, an office visit with a new patient cannot  be performed 
incident to; it would be considered an error if auxiliary personnel or a nonphysician  
practitioner was documented in the medical record as having  provided the service and it 
was then billed for by the physician. CMS, Medicare Benefit Policy Manual, 
Pub. 100-02, ch. 15,  60.1.B.  See  also First Coast Service Options, Inc., Billing  
physician assistant services incident to a doctor FAQ. Accessed at 
http://medicare.fcso.com/FAQs/Answers/157191.asp on December 18, 2013.   
41  Thirteen  percent of claims for E/M services in  2010  had illegible, missing,  or  
unacceptable signatures and no other errors.  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  8 
   
   
claim with the correct code.  When the correct code was lower than the 
code originally billed for, we considered the claim to be upcoded.  
Conversely, when the correct code was higher than that originally billed 
for, we considered the claim to be downcoded.42  We determined whether 
differences in error rates were statistically significant between strata and 
subgroups.43  For the subgroups of medical record type and format, 
differences for all error rates were not statistically significant at the 
95-percent confidence level.44      
We also calculated the projected amount that Medicare inappropriately 
paid in 2010 for claims for E/M services that were incorrectly coded 
and/or lacking documentation overall and by stratum.  For miscoded 
claims (including those with an insufficient-documentation error), we 
considered as inappropriate the net difference between the amount that 
was paid and the amount that should have been paid.  For all other errors, 
we considered the entire Medicare payment amount from the sampled 
claim to be inappropriate.   
The CERT Program and This Evaluation 
This evaluation is not designed to reproduce or review the findings 
reported through the CERT program. CMS reported on E/M services 
through its CERT program in 2011 and 2012.  Further, our review and the 
results reported through the CERT program should not be directly 
compared because the goals and methodologies of each review are 
different.  The goal of the CERT program is to measure the performance of 
CMSs contractors by calculating a paid-claims error rate, while the 
objective for this OIG study was to determine specifically whether E/M 
services billed to Medicare in 2010 were incorrectly coded and/or lacking 
documentation overall, by stratum, and by subgroup.  Our evaluation thus 
provides greater depth of information specific to E/M services than the 
CERT program offers.   Additionally, CMS bases error rates on dollars and 
number of services, whereas our review bases the error rate on the number 
 
42  Reviewers identified eight claims for E/M services for which the medical record 
supported a code  for a different visit type than  that originally billed by the physician.   We 
considered these claims to be miscoded.  If the payment rate for the correct code was 
lower than the payment rate for the code  originally billed,  we considered  the claim to be  
upcoded.  Similarly, we considered the claim  to be downcoded if the payment rate for the 
correct code was higher than the payment rate for the code  originally billed  by the 
physician. 
43  We  used an independent  group t-test to  determine whether differences in error rates  
between strata were statistically significant.  We used a Rao-Scott chi-square test to  
determine whether differences in error rates between  subgroups were statistically 
significant. 
44  See Appendix  F for sample sizes, point estimates, confidence intervals, and results of 
statistical tests.  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  9 
   
   
of claims.  For more information on the CERT program and how it relates 
to this evaluation, see Appendix C.  
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. 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  10 
   
   
FINDINGS 
Fifty-five percent of claims for E/M services were 
incorrectly coded and/or lacking documentation in 
2010, resulting in $6.7 billion in improper Medicare 
payments 
According to our medical record review, 55 percent of claims for E/M 
services in 2010 were incorrectly coded and/or lacking documentation.  
Medicare inappropriately paid $6.7 billion for these claims, representing 
21 percent of Medicare payments for E/M services in 2010.  In particular, 
26 percent were upcoded and 15 percent were downcoded.  Additionally, 
nearly 7 percent of claims for E/M services in 2010 were both incorrectly 
coded and insufficiently documented.  Table 2 shows the percentage of 
erroneous claims for E/M services and payments in error.  See Appendix D 
for point estimates and confidence intervals.  
Table 2: Percentage of and Medicare Payments for  Claims for E/M 
Services in Error, 2010  
Percentage of Claims  Medicare Payments  
Type of Error  
for E/M Services     (in Billions) 
Incorrectly Coded  42.4%  $3.3  
-Miscoded  40.4%   $2.8 
- Upcoded   26.0%   $4.6 
- Downcoded  14.5%   ($1.8)  
- Other Coding Error (e.g., Wrong Code,  
2.0%   $0.5* 
             Unbundling)  
Lacking Documentation  19.0%  $4.6  
- Insufficiently Documented   12.0%   $2.6 
- Undocumented   7.0%   $2.0 
Overall Gross**   61.3%  $7.9  
Overlapping   (6.7%)   ($1.1)  
Overall Net**   54.6%   $6.7  
*The 95-percent confidence interval for this point estimate  was $80,378,029  to $829,370,881.  Because few sampled claims for 
 
E/M services in 2010 fell into the  category of other coding error, the  confidence interval for this estimate was wide. 

**The  column sum of certain  percentages and dollar  figures does not equal the overall gross or  net totals because  of rounding.  

Source:  OIG analysis of 2010 E/M medical records, 2014. 

 
Most (79 percent of) miscoded claims were upcoded or downcoded by one  
level; however, 17 percent and 4 percent of claims were upcoded and 
downcoded, respectively, by two levels.  A small percentage (0.8 percent) 
of claims were upcoded by three levels, and an even smaller percentage 
(0.004 percent) were upcoded by four levels.  No claims in our sample 
were downcoded by three or four levels. 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  11 
   
   
Twenty-six percent of claims for E/M services were upcoded  
Twenty-six percent of claims for E/M services were upcoded in 2010.  
That is, a lower level code would have been more appropriate for the E/M 
service documented in the medical record than the code billed for by the 
physician. For example, for one claim in our sample, the physician billed 
for code 99215 (the highest level code for the visit type established 
patient office/outpatient visit); however, the medical record supported a 
lower level code, 99213.45  For this visit type, at least two of the three key 
components must be documented in order to bill for a specific level of 
E/M service. For 99215 to have been appropriate, the medical record 
should have contained documentation to support at least two of the 
following: a comprehensive patient history, a comprehensive 
examination, and medical decisionmaking of high complexity.46  For this 
sampled claim, the medical record contained documentation that 
supported only an expanded problem-focused examination and medical 
decisionmaking of moderate complexity.47    
Fifteen percent of claims for E/M services were downcoded 
Fifteen percent of claims for E/M services were downcoded in 2010.  That 
is, a higher level code would have been more appropriate for the E/M 
service documented in the medical record than the code billed for by the 
physician. For example, for one claim in our sample, the physician billed 
for code 99213 (the middle-level code for the visit type established 
patient office/outpatient visit); however, the medical record supported a 
higher level code (99214).48   The documentation in the medical record for 
this sampled claim supported a comprehensive patient history, a detailed 
examination, and medical decisionmaking of moderate complexity.  For 
99213 to have been appropriate, the medical record should have contained 
documentation to support at least two of the following:  an expanded 
problem-focused patient history, an expanded problem-focused 
examination, and medical decisionmaking of low complexity.49  
   
 
45  See footnote 5 for the AMA copyright notice. 
 
46  Ibid.  

47  No  patient  history  was documented in the medical record  for this  sampled claim.
   
However, this claim was not considered insufficiently documented for this missing  

patient history, because the other two key components were sufficiently documented and 

at least two of the three key components must be documented in order to  bill for a  

specific level of E/M service for this visit type. 

48  See footnote 5 for the AMA copyright notice. 
 
49
 Ibid. 
 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  12 
   
   
Two percent of claims for E/M services had other coding errors 
Two percent of claims for E/M service in 2010 had coding errors other 
than upcoding or downcoding. These errors included wrong codes (i.e., 
when the documentation in the medical record supported codes for 
non-E/M services)and unbundling (i.e., the practice of inappropriately 
reporting each component of a service or procedure instead of reporting 
the single, comprehensive code).  For example, one claim in our sample 
contained documentation that supported a procedure but not a significant, 
separately identifiable E/M service.  In another example, the medical 
record for a claim in our sample stated that the beneficiary had received an 
injection; the record did not contain any documentation to support the E/M 
service for which the physician had billed. 
Twelve percent of claims for E/M  services were insufficiently 
documented 
The documentation in the medical record must support the medical 
necessity and appropriateness, as well as the level, of the E/M service.  
Twelve percent of claims for E/M services were insufficiently documented 
in 2010. The documentation in the medical record must also support the 
type of each keyand, if applicable, contributorycomponent used to 
determine the appropriate level of E/M service.  For example, the level of 
the E/M service for one insufficiently documented claim in our sample 
was based on counseling and/or coordination of care; however, only the 
length of time of the encounter was documented in the medical record.  
The medical record contained no description of the counseling and/or 
activities to coordinate care, as required by Medicare.  
Seven percent of claims for E/M services were undocumented 
Physicians must provide documentation upon request to support claims for 
Medicare services. Seven percent of claims for E/M services were 
undocumented in 2010.  For these undocumented claims, either the 
physician received our request but did not respond to it or the 
documentation that the physician sent did not contain any information 
relevant to our sampled claim.    
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  13 
   
   
Claims for E/M services billed for by high-coding 
physicians were more likely  to be incorrectly coded or 
insufficiently documented than those billed for by 
other physicians 
High-coding physicians are defined as (1) physicians whose average code 
level was in the top 1 percent of their specialty; and (2) from that subset of 
physicians, those that billed for the two highest level codes for E/M 
services at least 95 percent of the time.   
Claims for E/M services billed for by high-coding physicians were more 
likely to be incorrectly coded than those billed for by other physicians. 
	   Fifty-six percent of claims for E/M services billed for by high-coding 
physicians in 2010 were incorrectly coded.  Medicare inappropriately 
paid $26 million for these claims, representing 25 percent of total 
Medicare payments for E/M services billed for by high-coding 
physicians in 2010. Medicare inappropriately paid an average of 
$15,594 per high-coding physician in 2010 for incorrectly coded 
claims for E/M services.50  Ninety-nine percent of miscoded claims for 
E/M services billed for by high-coding physicians in 2010 were 
upcoded, while less than 1 percent were downcoded. 
	   Forty-two percent of claims for E/M services billed for by other 
physicians were incorrectly coded. Medicare inappropriately paid 
$3.2 billion for these claims, representing 10 percent of total Medicare 
payments for E/M services billed for by other physicians in 2010.  
Medicare inappropriately paid an average of $7,348 per other 
physician in 2010 for incorrectly coded claims for E/M services.51   
Sixty-four percent of miscoded claims for E/M services billed for by 
other physicians in 2010 were upcoded, while 36 percent were 
downcoded. 
Figure 1 shows the percentage of upcoded claims, shown as positive, and 
downcoded claims, shown as negative, for E/M services by stratum and 
level. See Appendix E for point estimates, confidence intervals, and 
results of statistical tests.  
 
 
 
50  To determine the average amount Medicare inappropriately paid for incorrectly coded 
claims for E/M services per high-coding physician, we divided $26 million by the total  
number of physicians in  stratum 1 (i.e.,  1,669). 
51  To determine the average amount Medicare inappropriately paid for incorrectly coded 
claims  for E/M  services per other physician, we divided $3.2 billion by  the total number 
of physicians in stratum 2 (i.e., 440,321).  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  14 
   
   
 
Figure 1: Percentage of Upcoded and Downcoded Claims for E/M Services by Stratum and 
Level, 2010 
 
Source:  OIG analysis of 2010 E/M medical records, 2014. 
Additionally, claims for E/M services billed for by high-coding physicians 
were more likely to be insufficiently documented than those billed for by 
other physicians. Twenty percent of claims for E/M services billed for by 
high-coding physicians were insufficiently documented, compared to 
12 percent of those billed for by other physicians.  The difference in error 
rates for undocumented claims by stratum was not statistically significant 
at the 95-percent confidence level.  See Table E-3 in Appendix E.  
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  15 
   
   
CONCLUSION AND RECOMMENDATIONS 
In 2010, Medicare paid $32.3 billion for E/M services. In 2012, OIG 
reported that from 2001 to 2010, physicians increased their billing of 
higher level codes for E/M services in all visit types.  CMS also found 
through its CERT program that E/M services are 50 percent more likely to 
be paid for in error than other Part B services; most improper payments 
result from errors in coding and from insufficient documentation.   
In total, Medicare inappropriately paid $6.7 billion for claims for E/M 
services in 2010 that were incorrectly coded and/or lacking 
documentation, representing 21 percent of Medicare payments for E/M 
services that year. Our medical record review found that 42 percent of 
claims for E/M services in 2010 were incorrectly coded, which included 
both upcoding and downcoding, and 19 percent of claims for E/M services 
were lacking documentation.  Additionally, we found that claims from  
high-coding physicians were more likely to be incorrectly coded or 
insufficiently documented than claims from other physicians.   
Collectively, our findings highlight errors associated with E/M services 
that must be addressed to properly safeguard Medicare.  Even though 
Medicare payment rates for individual E/M services are small (about 
$100 on average), 370 million E/M services were billed for by physicians 
in 2010 and accounted for nearly 30 percent ($32.3 billion of $110 billion)  
of Part B payments that year.  Given the substantial spending on E/M 
services and the prevalence of error,  CMS must use all of the tools at its 
disposal to more effectively identify and eliminate improper payments 
associated with E/M services.  
We recommend that CMS:     
Educate physicians on coding and documentation 
requirements for E/M services 
CMS should educate physicians on coding and documentation 
requirements for E/M services, either directly or through its contractors.  
Specifically, CMS should educate physicians on the components used to 
determine the level of an E/M service and emphasize the documentation 
needed in the medical record to support that level.  CMS should also 
review its current materials for educating physicians regarding the coding 
and documentation of E/M services and determine whether any revisions 
or updates are needed. 
Continue to encourage contractors to review E/M services 
billed for by high-coding physicians 
As part of its efforts to address recommendations made in the OIG report 
Coding Trends of Medicare Evaluation and Management Services 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  16 
   
   
(OEI-04-10-00180), CMS directed its contractors to consider high-coding 
physicians as they prioritize their medical review strategies.  Toward that 
end, CMS should continue to encourage its contractors to focus medical 
record reviews of E/M services on claims from high-coding physicians, 
including those identified in this review and through analysis of 
subsequent years of claims data.  We acknowledge that CMS and its 
contractors must weigh the costs and benefits of reviewing claims for E/M 
services against doing so for more costly Part B services.  However, by 
applying our criteria and focusing medical record review on high-coding 
physicians, CMS and its contractors would be more likely to identify 
errors and improper payments, thereby making reviews of E/M services 
more cost effective.   
Follow up on claims for E/M services that were paid for in error  
In a separate memorandum, we will refer to CMS for appropriate action 
the sampled claims for E/M services that were incorrectly coded and/or 
lacking documentation.  CMS should make payment adjustments, as 
appropriate, to include following up on both overpayments and 
underpayments.           
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  17 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with our first recommendation, did not concur with our 
second recommendation, and partially concurred with our third 
recommendation.   
With regard to our first recommendation, CMS concurred and agrees that 
physician education and outreach are critical parts of an effective 
enforcement strategy.  CMS will continue to issue education documents on 
E/M services and will collaborate with contractors to respond to questions 
and clarify policies when inconsistencies in billing practices arise.  
With regard to our second recommendation, CMS did not concur.  CMS 
directed a medical review contractor to review claims billed by high-
coding physicians that were previously referred by OIG, and the first 
phase of these reviews resulted in a negative return on investment.  On the 
basis of the results of additional reviews, CMS will reassess the 
effectiveness of reviewing claims billed by high-coding physicians as 
compared to other efforts, such as Comparative Billing Reports.  We  
acknowledge that CMS must weigh the costs and benefits of reviewing 
claims for E/M services against doing so for more costly Part B services; 
however, we continue to believe that CMS should focus its medical review 
efforts on those services billed for by high-coding physicians, as these 
claims are more likely to be in error than claims for E/M services billed 
for by other physicians. We also encourage CMS to use other efforts, such 
as Comparative Billing Reports, that aim to reduce the high error rate 
associated with claims for E/M services billed for by high-coding 
physicians. 
With regard to our third recommendation, CMS partially concurred.  CMS 
will analyze each overpayment to determine which claims exceed its 
recovery threshold and can be collected consistent with its policies and 
procedures. For the overpayments identified in this report that will not be 
collected, CMS could send an educational notice to physicians that billed 
for these claims.  These notices could describe the type of error identified,  
explain the reason the overpayment is not being recovered, and provide 
information on how to correctly bill for future E/M services.  We will send  
information to CMS regarding the improper payments identified in this 
report under separate cover.  
We removed a fourth recommendation listed in our draft reportfor CMS 
to consolidate the 1995 and 1997 Documentation Guidelines for 
Evaluation and Management Servicesbecause we did not determine 
whether the errors we identified resulted from having two versions of 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  18 
   
   
documentation guidelines.  However, having two versions of 
documentation guidelines may be confusing for physicians and could 
contribute to the high error rate associated with E/M services.  
We support CMSs efforts to address these issues and encourage continued 
progress. For the full text of CMSs comments, see Appendix G. 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  19 
   
   
APPENDIX A 
Components Used To Determine the Level of an Evaluation 
and Management Service 
As defined by the Current Procedural Terminology52 manual, the codes for 
E/M services, which correspond to three to five levels within a visit type, 
include seven basic components:  patient history, physical examination, 
medical decisionmaking, counseling, coordination of care, the nature of 
the patients presenting problem (i.e., the reason for the visit), and time.  
The first three components are key to determining the correct code for the 
E/M service, and the remaining four components are contributory.53   The 
physician must use the following three key components to determine the 
appropriate code: 
	   Extent of patient historyUsing their clinical judgment, physicians 
assess the nature of the patients presenting problems to determine the 
depth of the history needed to complete the service.  A patient history 
can be classified into one of four types: 
o 	  problem focused (brief history of present illness or problem); 
o 	  expanded problem focused (brief history of present illness with 
problem-pertinent system review); 
o 	  detailed (extended history of present illness with pertinent past, 
family, and social history directly related to the presenting 
problem; includes review of a limited number of additional 
systems); and 
o 	  comprehensive (extended history of present illness with review  
of body systems directly related to the patients problems; 
complete past, family, and social history). 
   
 
52 The five character codes and descriptions included in this study are obtained from 
Current Procedural Terminology (CPT), copyright 2009 by the  American Medical 
Association (AMA). CPT is developed by the AMA as  a listing of descriptive terms 
and five character identifying codes and modifiers for reporting medical services 
and procedures. Any use of CPT outside of this study should refer to the most 
current version of the Current Procedural  Terminology available from AMA. 
Applicable FARS/DFARS apply. 
53  Exceptions to  this rule are visits that consist predominantly of counseling or  
coordination of  care;  time is the key factor to determining the correct code  for these E/M 
services.  If the level of an  E/M service is based on counseling and/or coordination of  
care, the total length of time of the encounter should be documented and the medical  
record should describe the counseling and/or activities to coordinate care.  CMS, 
Evaluation and  Management Services Guide, December 2010, pp. 21 and 25.  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  20 
   
   
 	  Extent of physical examinationUsing their clinical judgment and 
depending on the presenting medical problems, physicians can 
perform one of four types of examination: 
o 	  problem focused (limited examination of the affected body area 
or organ system); 
o 	  expanded problem focused (limited examination of affected area 
or systems with other symptomatic or related organ systems); 
o 	  detailed (extended examination of affected body area and other 
related systems); and 
o 	  comprehensive (a general multisystem examination or a 
complete examination of a single organ system).  
 	  Complexity of the physicians medical decisionmakingThe complexity 
of the physicians medical decisionmaking is based on factors needed to 
establish a diagnosis and/or select a management option:  the number of 
possible diagnoses or the number of options that must be considered; the 
amount and/or complexity of medical records, diagnostic tests, and other 
information that physicians must obtain, review, and analyze; and the risk 
of significant complications, morbidity, and/or mortality.  Four types of  
medical decisionmaking are recognized: 
o 	  straightforward, 
o 	  low complexity,  
o 	  moderate complexity, and 
o 	  high complexity. 
Table A-1 illustrates the key components used to determine the appropriate 
code for a new patient office visit.  There are five levels of complexity for 
this office visit.   
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  21 
   
   
Table A-1: Key Components Used To Determine the Level and CPT Code  
for New Patient Office Visit  
Key Components 
CPT 
Code*   Presenting Problem(s)   Patient History   Examination   Medical 
Decisionmaking  
Self-limited or minor; the physician typically spends 10 
99201   Problem focused  Problem focused  Straightforward  
minutes face-to-face with the patient and/or family  
Low to moderate severity; the physician typically spends  Expanded   Expanded  
99202   Straightforward  
20 minutes face-to-face with the patient and/or family  problem focused   problem focused  
Moderate severity; the physician typically spends 30  
99203   Detailed  Detailed  Low  complexity  
minutes face-to-face with the patient and/or family  
Moderate to high severity; the physician typically spends  Moderate 
99204   Comprehensive  Comprehensive 
45 minutes face-to-face with the patient and/or family  complexity  
Moderate to high severity; the physician typically spends 
99205   Comprehensive  Comprehensive  High complexity  
60 minutes face-to-face with the patient and/or family 
*See footnote 52 for the AMA  copyright notice. 

Source:  CMS, Evaluation & Management Services Guide  2010, December 2010. 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  22 
   
   
APPENDIX B 
Additional Information on Sample Selection and Subgrouping 
 
Table B-1: Population and Sample Size of  Claims for E/M Services by Stratum, 2010  
Population  Sample  
Stratum  Definition  
Medicare  Medicare 
Claims   Physicians  Claims   Physicians  
Payments   Payments  
Claims for E/M services billed for by  
1  828,646  $107,652,434   1,669   309  $40,039   259 
high-coding physicians 
Claims for E/M services billed for by  
2  368,800,457  $32,211,029,164   440,321   364  $31,468   363 
other physicians  
     Total   369,629,103   $32,318,681,598   441,990   673  $71,507   622 
Source:  OIG analysis of 2010 Part B claims for E/M services, 2014.  
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  23 
   
   
Table B-2: Sampled Claims for E/M Services by Visit Type and CPT Code, 
2010  
Number of   Percentage of  
Visit Type   CPT Code*   Complexity Level  Sampled Claims for  Sampled Claims for 
E/M Services   E/M Services  
99201  Low  1  0.2%  
99202  Medium-Low   2  0.3%  
New Patient Office/ 
99203  Medium  4  0.6%  
Outpatient Visit 
99204  Medium-High   20  3.0%  
99205  High  21  3.1%  
99211  Low  6  0.9%  
99212  Medium-Low   17  2.5%  
Established Patient 
99213  Medium  95  14.1%  
Office/Outpatient Visit  
99214  Medium-High   177  26.3%  
99215  High  127  18.9%  
99218  Low  0  0.0%  
Initial Observation Care   99219 Medium  1  0.2%  
99220 High  0  0.0%  
99221  Low  2  0.3%  
Initial Inpatient Hospital 
99222 Medium  4  0.6%  
Care  
99223 High  13  1.9%  
99231  Low  13  1.9%  
Subsequent Inpatient 
99232 Medium  48  7.1%  
Hospital Care  
99233 High  25  3.7%  
99281  Low  0  0.0%  
99282  Medium-Low   0  0.0%  
Emergency Department 
99283  Medium  7  1.0%  
Visit  
99284  Medium-High   14  2.1%  
99285  High  38  5.7%  
99304  Low  0  0.0%  
Initial Nursing Facility  
99305 Medium  2  0.3%  
Care  
99306 High  1  0.2%  
99307  Low  7  1.0%  
Subsequent Nursing  99308  Medium-Low   10  1.5%  
Facility Care   99309  Medium-High   4  0.6%  
99310  High  3  0.5%  
continued on next page 
 
 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  24 
   
   
Table B-2 (Continued):  Sampled Claims for E/M Services by Visit Type and 
CPT Code, 2010  
Number of   Percentage of  
Visit Type   CPT Code*   Complexity Level  Sampled Claims for  Sampled Claims for 
E/M Services   E/M Services  
99324  Low  0  0.0%  
99325  Medium-Low   0  0.0%  
New Patient 
Domiciliary/Rest Home  99326  Medium  0  0.0%  
Visit  
99327  Medium-High   0  0.0%  
99328  High  0  0.0%  
99334  Low  0  0.0%  
Established  99335  Medium-Low   1  0.2%  
Domiciliary/Rest Home 
Visit   99336  Medium-High   0  0.0%  
99337  High  2  0.3%  
99341  Low  0  0.0%  
99342  Medium-Low   0  0.0%  
New Patient Home Visit   99343  Medium  0  0.0%  
99344  Medium-High   0  0.0%  
99345  High  0  0.0%  
99347  Low  0  0.0%  
Established Patient  99348  Medium-Low   0  0.0%  
Home Visit  99349  Medium-High   2  0.3%  
99350  High  6  0.9% 
 Total   673  100.0%**  
*The five  character codes and  descriptions included in this study are obtained from Current Procedural 
Terminology (CPT), copyright 2009 by the American Medical Association (AMA).  CPT is developed by 
the AMA as a listing of descriptive terms and five character identifying codes  and modifiers for reporting 
medical services and procedures. Any use of CPT outside of this study should refer to the most current 
version of the Current Procedural Terminology available from AMA. Applicable FARS/DFARS apply.  
**Column  does not sum to 100 percent because of  rounding.  
Source:  OIG analysis of 2010 Part B claims for E/M services, 2014. 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  25 
   
   
Table B-3: Subgroup of Claims for E/M Services by  Medical Record Type, 
2010  
Subset  
Subgroup  Definition  
Medicare 
Claims   Physicians  
Payments  
Claims for E/M services documented in 
1  411  $44,534   377 
paper medical records 
Claims for E/M services documented in 
2  207  $21,448   199 
electronic medical records 
Total   618   $65,982  572* 
*Column sum exceeds total  because some physicians had multiple claims  in our sample. 
Source:  OIG analysis of 2010 Part B claims for E/M services, 2014. 
 
 
Table B-4: Subgroup of Claims for E/M Services by  Medical Record 
Format, 2010 
Claims  
Subgroup  Definition  
Medicare 
Claims   Physicians  
Payments  
Claims for E/M services formatted with 1995 
1  Documentation Guidelines for Evaluation and Management  400  $40,928   382 
Services  
Claims for E/M services formatted with 1997 
2  Documentation Guidelines for Evaluation and Management  131  $16,069   123 
Services  
Claims for E/M services for which the format of the medical 
3  87  $8,985   81 
record was unable to be determined 
Total   618  $65,982   572*  
*Column sum exceeds total  because some physicians had multiple claims  in our sample. 
Source:  OIG analysis of 2010 Part B claims for E/M services, 2014. 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  26 
   
   
APPENDIX C 
The Comprehensive Error Rate Testing Program and This 
Evaluation 
OIG has performed, and continues to perform, work examining E/M 
services. In addition, CMS, as part of its CERT program, measures errors 
in E/M services. The goal of the CERT program is to measure the 
performance of CMSs contractors by calculating a paid-claims error rate.  
CMS bases the rate on the dollar paid after the contractor makes its 
payment decision on a claim.   The paid-claims error rate is a percentage of  
dollars that contractors erroneously allowed to be paid.  In addition to 
calculating the paid-claims error rate, CMS calculates a provider-
compliance error rate and a services-processed error rate.  
On the other hand, OIGs objective in this evaluation was to estimate a 
national paid-claims error rate for E/M services, as well as to compare 
error rates by stratum and subgroup.  This OIG study was not designed to 
reproduce, or to review, the CERT paid-claims error rate. 
Because the goals of our review and the CERT program differ, the 
respective methodologies used to calculate the error rates differ.  Our 
review included the following factors, differentiating it from CMSs CERT  
program: 
 	  a stratified sample by physicians coding of E/M services and 
 	  subgrouping by medical record type (i.e., the medical record for 
the sampled claim was paper or electronic) and by medical record 
format (i.e., the medical record for the sampled claim was 
formatted using the 1995 or 1997 Documentation Guidelines for 
Evaluation and Management Services).  
In addition, there are differences in how the CERT program and OIG 
report the calculated error rates.  As mentioned previously, CMS calculates 
three different error rates.  For the paid-claims error rate and 
provider-compliance error rate, CMS bases the rate on dollar amounts.  
For the services-processed error rate, CMS bases the error rate on the 
number of services.  Our review bases the error rate on the number of 
claims.  In addition to calculating the overall fee-for-service error rate, 
CMS calculates error rates for individual contractors.  Our review 
calculates error rates for the strata and subgroups and projects the error 
rate nationally, as well as dollars associated with claims paid in error.  
Although the respective goals and methodologies of our review and the 
CERT program differ, the error categories in each review are similar.  
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  27 
   
   
CMS groups claims identified as containing improper payments through 
its CERT program into five categories:  no documentation, insufficient 
documentation, medical necessity, incorrect coding, and other 
(e.g., duplicate payment error, noncovered or unallowable service).  
Similarly, our review groups claims for E/M services into three categories:  
no documentation, insufficient documentation, and incorrect coding.  Our 
review did not determine whether E/M services were medically necessary 
in 2010. We also did not have an other category because we did not 
determine whether E/M services were duplicative, noncovered, or 
unallowable. 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  28 
   
   
APPENDIX D 
Sample Sizes, Point Estimates, and Confidence Intervals of 
Claims for Evaluation and Management Services 
 
Table D-1: Sample Sizes, Point Estimates, and Confidence Intervals of 
Incorrectly Coded, Insufficiently Documented, and/or Undocumented 
Claims for E/M Services, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Gross percentage of incorrectly coded, insufficiently  
657  61.3%   55.0%67.6%  
documented, and/or undocumented claims for E/M services 
Gross Medicare payments for incorrectly coded, insufficiently  
657  $7,869,264,031   $6,095,196,627$9,643,331,435  
documented, and/or undocumented claims for E/M services*  
Percentage of claims for E/M services with multiple 
657  6.7%   4.1%9.3%  
(i.e., overlapping) errors  
Medicare payments for claims for E/M services with 
657  $1,119,607,546   $557,880,415$1,681,334,677  
overlapping errors  
Net percentage of incorrectly coded, insufficiently  
657  54.6%   49.4%59.7%  
documented, and/or undocumented claims for E/M services 
Net Medicare payments for incorrectly coded, insufficiently  
657  $6,749,656,485   $5,222,278,129$8,277,034,841  
documented, and/or undocumented claims for E/M services*  
Percentage of Medicare payments for incorrectly coded, 
insufficiently documented, and/or undocumented claims for 
657  21.4%   17.0%25.8%  
E/M services of total Medicare payments for E/M services in 
2010  
*To calculate the  payments for claims for E/M  services that were miscoded, we subtracted the payment amount for the correct code from the payment 
 
amount for the code on the  claim. 

Source:  OIG analysis of 2010 E/M medical records, 2014. 
 
 
 
 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  29 
   
   
Table D-2: Sample Sizes, Point Estimates, and Confidence Intervals of 
Incorrectly Coded Claims for E/M Services, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Percentage of incorrectly coded claims for E/M services   657  42.4%   37.4%47.6%  
Medicare payments for incorrectly coded claims for E/M 
657  $3,261,643,225   $2,065,237,356$4,458,049,093  
services*  
Percentage of Medicare payments for incorrectly coded claims 
657  10.3%   6.8%13.9%  
for E/M services of total Medicare payments for E/M services 
Percentage of miscoded claims for E/M services  657  40.4%   35.5%45.6%  
Medicare payments for miscoded claims for E/M 
657  $2,806,768,770   $1,658,804,226$3,954,733,313  
services*  
Percentage of miscoded claims for E/M services for 
which the physician used both the  1995 and 1997  301  3.4%   1.4%8.0%  
Documentation Guidelines** 
Percentage of upcoded claims for E/M services  657  26.0%   21.7%30.7%  
Percentage of miscoded claims for E/M services that 
293  45.3%   37.2%53.7%  
were upcoded by 1 level 
Percentage of miscoded claims for E/M services that 
293  16.8%   11.4%24.0%  
were upcoded by 2 levels 
Percentage of miscoded claims for E/M services that 
293  0.8%   0.1%4.8%  
were upcoded by 3 levels 
Percentage of miscoded claims for E/M services that 
293  0.004%   0.001%5.0%  
were upcoded by 4 levels 
Medicare payments for upcoded claims for E/M 
657  $4,569,195,340   $3,617,700,452$5,520,690,228  
services  
Percentage of downcoded claims for E/M services  657  14.5%   11.2%18.5%  
Percentage of miscoded claims for E/M services that 
293  33.5%   26.1%41.8%  
were downcoded by 1 level 
Percentage of miscoded claims for E/M services that 
293  3.6%   1.5%8.5%  
were downcoded by 2 levels 
Percentage of miscoded claims for E/M services that 
293  0.0%   0.0%5.0%  
were downcoded by 3 levels 
  continued on next page 
 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  30 
   
   
Table D-2 (Continued):  Sample Sizes, Point Estimates, and Confidence  
Intervals of Incorrectly Coded Claims for E/M Services, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Percentage of miscoded claims for E/M services 
293  0.0%   0.0%5.0%  
that were downcoded by 4 levels 
Medicare payments for downcoded claims for E/M 
657  ($1,762,426,570)   ($2,254,640,000)($1,270,210,000)  
services  
Percentage of miscoded claims for E/M services 
293  78.8%   71.2%84.8%  
that were upcoded or downcoded by 1 level 
Percentage of claims for E/M services with other coding 
657  2.0%   0.9%4.0%  
errors (e.g., wrong code, unbundling)  
Medicare payments for claims for E/M services with other 
657  $454,874,455   $80,378,029$829,370,881  
coding errors  
Percentage of claims for E/M services for which the correct 
657  2.5%   1.3%4.8%  
code was unable to be determined 
*To calculate the  payments for claims for E/M  services that were miscoded, we subtracted the payment amount for the correct code from the payment 
 
amount for the code on the  claim. 

**At the  time of  our review, physicians could use either version  of the documentation guidelines, but not a combination of  the  two, when determining the 
 
appropriate level for an E/M service.  For these  claims, physicians used the  1997 Documentation Guidelines for an extended history of present illness along 
 
 
with elements from the 1995 Documentation Guidelines. 

Source:  OIG analysis of 2010 E/M medical records, 2014. 

 
Table D-3: Sample Sizes, Point Estimates, and Confidence Intervals of 
Claims for E/M Services Lacking Documentation, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Percentage of claims for E/M services lacking documentation   657  19.0%   15.2%23.3%  
Medicare payments for claims for E/M services lacking 
657  $4,607,620,806   $3,435,418,912$5,779,822,701  
documentation  
Percentage of insufficiently documented claims for E/M 
657  12.0%   9.0%15.8%  
services  
Medicare payments for insufficiently documented claims 
657  $2,622,446,473   $1,724,480,895$3,520,412,050  
for E/M services  
Percentage of undocumented claims for E/M services  657  7.0%   4.7%10.1%  
Medicare payments for undocumented claims for E/M 
657  $1,985,174,334   $1,162,105,045$2,808,243,623  
services  
Percentage of claims for E/M services with illegible, missing, 
657  13.4%   10.2%17.3%  
or unacceptable signatures 
Source:  OIG analysis of 2010 E/M medical records, 2014. 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  31 
   
   
APPENDIX E 
Sample Sizes, Point Estimates, Confidence Intervals, and 
Results of Statistical Tests of Claims for Evaluation and 
Management Services, by Stratum   
Table E-1: Sample Sizes, Point Estimates, and Confidence Intervals of 
Claims for E/M Services by  Stratum, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Percentage of incorrectly coded claims for E/M services billed 
298  56.4%   50.7%61.9%  
for by  high-coding physicians 
Percentage of miscoded claims for E/M services that were 
156  99.4%   95.6%99.9%  
upcoded by  high-coding physicians 
Percentage of miscoded claims for E/M services that were 
156  0.6%   0.1%4.4%  
downcoded by high-coding physicians 
Medicare payments for incorrectly coded claims for E/M 
298  $26,027,127   $22,518,898$29,535,356  
services billed for by  high-coding physicians 
Percentage of Medicare payments for incorrectly coded claims 
of total Medicare payments for claims for E/M services billed  298  25.1%   21.9%28.2%  
for by  high-coding physicians 
Average inappropriate Medicare payment per high-coding 
298  $15,594   $13,492$17,696 
physician for incorrectly coded claims for E/M services 
Percentage of claims for E/M services billed for by other 
359  42.3%   37.3%47.5%  
physicians that were incorrectly coded 
Percentage of miscoded claims for E/M services that were 
145  64.1%   56.0%71.5%  
upcoded by  other physicians 
Percentage of miscoded claims for E/M services that were 
145  35.9%   28.5%44.0%  
downcoded by other physicians 
Medicare-allowed amounts for claims for E/M services billed 
359  $3,235,616,097   $2,037,378,284$4,433,853,911  
for by  other physicians that were incorrectly coded  
Percentage of Medicare-allowed amounts for incorrectly  
coded claims of total Medicare-allowed amounts for claims for  359  10.3%   6.8%13.8%  
E/M services billed for by other physicians 
Average inappropriate Medicare payment per other physician 
359  $7,348   $4,627$10,070  
for incorrectly coded claims for E/M services 
Percentage of insufficiently documented claims for E/M 
298  19.5%   15.3%24.4%  
services billed for by  high-coding physicians  
Percentage of insufficiently documented claims for E/M 
359  12.0%   9.0%15.8%  
services billed by other physicians 
Percentage of undocumented claims for E/M services billed 
298  4.7%   2.8%7.8%  
for by  high-coding physicians*  
Percentage of undocumented claims for E/M services billed 
359  7.0%   4.7%10.1%  
for by other physicians*  
*The difference between these error rates was not statistically significant at the 95-percent confidence level. 
Source:  OIG analysis of 2010 E/M medical records, 2014. 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  32 
   
   
Table E-2: Sample Sizes, Point Estimates, and Confidence Intervals of Upcoded and Downcoded Claims for E/M 
Services by  Stratum, 2010  
High-Coding Physicians   Other Physicians  
Estimate Description  
Sample  Point  95-Percent  Sample  Point  95-Percent 
Size  Estimate   Confidence Interval   Size  Estimate   Confidence Interval  
By 4 levels*  156  1.3%   0.3%5.0%   137  0.0%   0.0%1.0%  
d 
e By 3 levels  156  9.6%   5.9%15.4%   137  0.7%   0.1%5.0%  
d
o
c
p
U By 2 levels*  156  23.1%   17.1%30.3%   137  16.8%   11.4%24.0%  
Percentage of 
miscoded 
claims for   By 1 level  156  65.4%   57.6%72.4%   137  45.3%   37.1%53.7%  
E/M services 
that were  By 1 level  156  0.6%   0.1%4.4%   137  33.6%   26.2%41.9%  
upcoded or   d 
downcoded   e
od By 2 levels  156  0.0%   0.0%1.2%   137  3.6%   1.5%8.5%  
c
n
w
o By 3 levels*  156  0.0%   0.0%1.2%   137  0.0%   0.0%1.0%  
D
By 4 levels*  156  0.0%   0.0%1.2%   137  0.0%   0.0%1.0%  
*The difference between these error rates was not statistically significant at the 95-percent confidence level. 
Source:  OIG analysis of 2010 E/M medical records, 2014.  
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  33 
   
   
Table E-3:  Results of Independent Group T-Tests for Claims for E/M 
Services by  Stratum, 2010  
Point 
Description  Stratum   P-Value  
Estimates  
High-Coding  56.4%  
Difference in percentage of incorrectly coded claims for E/M 
0.0003  
services, by stratum 
Other 42.3%  
High-Coding   99.4%  
Difference in percentage of miscoded claims for E/M 
<0.0001  
services that were upcoded, by stratum 
Other   64.1%  
High-Coding  65.4%  
Difference in percentage of miscoded claims for E/M 
0.0005  
services that were upcoded by 1 level, by stratum  
Other 45.3%  
High-Coding   23.1%  
Difference in percentage of miscoded claims for E/M 
0.1817  
services that were upcoded by 2 levels, by stratum  
Other   16.8%  
High-Coding  9.6%  
Difference in percentage of miscoded claims for E/M 
0.0004  
services that were upcoded by 3 levels, by stratum  
Other 0.7%  
High-Coding   1.3%  
Difference in percentage of miscoded claims for E/M 
0.1580  
services that were upcoded by 4 levels, by stratum  
Other   0.0%  
High-Coding  0.6%  
Difference in percentage of miscoded claims for E/M 
<0.0001  
services that were downcoded, by stratum  
Other 35.9%  
High-Coding   0.6%  
Difference in percentage of miscoded claims for E/M 
<0.0001  
services that were downcoded by  1 level, by stratum 
Other   33.6%  
High-Coding  0.0%  
Difference in percentage of miscoded claims for E/M 
0.0248  
services that were downcoded by  2 levels, by stratum 
Other 3.6%  
High-Coding   0.0%  
Difference in percentage of miscoded claims for E/M 
--*  
services that were downcoded by  3 levels, by stratum 
Other   0.0%  
High-Coding  0.0%  
Difference in percentage of miscoded claims for E/M 
--*  
services that were downcoded by  4 levels, by stratum 
Other  0.0%  
High-Coding   19.5%  
Difference in percentage of insufficiently documented claims 
0.0093  
for E/M services, by stratum  
Other   12.0%  
High-Coding  4.7%  
Difference in percentage of undocumented claims for E/M 
0.2139  
services, by stratum 
Other 7.0%  
*No claims in our  sample were downcoded by 3 or 4 levels.  As a result, these point estimates were the same and the difference  between these 
 
error rates was not  statistically significant. 
 
Source:  OIG analysis of 2010 E/M medical records, 2014. 
 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  34 
   
   
APPENDIX F 
Sample Sizes, Point Estimates, Confidence Intervals, and 
Results of Statistical Tests of Claims for Evaluation and 
Management Services, by Subgroups 
 
Table F-1: Sample Sizes, Point Estimates, and Confidence Intervals of 
Claims for E/M Services by  Medical Record Type, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Percentage of claims for E/M services documented in paper 
618  64.1%   58.8%69.1%  
medical records 
Percentage of claims for E/M services documented in 
618  35.9%   30.9%41.2%  
electronic medical records 
Percentage of incorrectly coded claims for E/M services 
411  44.0%   37.5%50.7%  
documented in paper medical records* 
Percentage of incorrectly coded claims for E/M services 
207  48.3%   39.5%57.3%  
documented in electronic medical records* 
Percentage of insufficiently documented claims for E/M 
411  14.5%   10.4%19.9%  
documented in paper medical records* 
Percentage of insufficiently documented claims for E/M 
207  10.0%   5.8%16.8%  
services documented in electronic medical records* 
*The difference between these error rates was not statistically significant at the 95-percent confidence level. 
Source:  OIG analysis of 2010 E/M medical records, 2014.  
 
Table F-2:  Results of Chi-Square Tests for Claims for E/M Services by 
Medical Record Type, 2010  
Medical Record  Point 
Description   P-Value  
Type   Estimates  
Paper  44.0%  
Difference in percentage of incorrectly coded claims, by  
0.4405  
medical record type 
Electronic  48.3%  
Paper  14.5%  
Difference in percentage of insufficiently documented claims, 
0.2382  
by medical record type  
Electronic  10.0%  
Source:  OIG analysis of 2010 E/M medical records, 2014.  
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  35 
   
   
Table F-3: Sample Sizes, Point Estimates, and Confidence Intervals of 
Claims for E/M Services by  Medical Record Format, 2010  
 
Sample 
Estimate Description   Point Estimate   95-Percent Confidence Interval   
Size 
 
Percentage of claims for E/M services formatted with 1995 
Documentation Guidelines for Evaluation and Management  618  72.1%   67.1%-76.7%  
Services  
Percentage of claims for E/M services formatted with  1997 
Documentation Guidelines for Evaluation and Management  618  16.5%   12.9%-20.9%  
Services  
Percentage of claims for E/M services for which the format of 
618  11.4%   8.4%-15.3%  
the medical record was unable to be determined  
Percentage of incorrectly coded claims for E/M services 
400  43.2%   37.1%-49.5%  
formatted with 1995 Documentation Guidelines* 
Percentage of incorrectly coded claims for E/M services 
131  52.7%   39.6%-65.4%  
formatted with 1997 Documentation Guidelines* 
Percentage of insufficiently documented claims for E/M 
400  9.1%   6.1%13.5%  
services formatted with 1995 Documentation Guidelines* 
Percentage of insufficiently documented claims for E/M 
131  5.5%   1.8%15.6%  
services formatted with 1997 Documentation Guidelines* 
*The difference between these error rates was not statistically significant at the 95-percent confidence level. 
Source:  OIG analysis of 2010 E/M medical records, 2014.  
 
Table F-4:  Results of Chi-Square Tests for Claims for E/M Services by 
Medical Record Format, 2010  
Medical Record  Point 
Description   P-Value  
Format   Estimates  
1995 43.2%  
Difference in percentage of incorrectly coded claims for E/M 
0.2002  
services, by medical record format  
1997 52.7%  
1995   9.1%  
Difference in percentage of insufficiently documented claims 
0.3743  
for E/M services, by medical record format  
1997   5.5%  
Source:  OIG analysis of 2010 E/M medical records, 2014.  
 
 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  36 
  APPENDIXG 
Agency Comments 
DEPARTMENT OF HEALTH ,'ic HUMAf\i SERVICES  Cenws ror Medicare & Medicaid Serv.ces 
A.ilmiuistrator 
Washngton, DC 20201 
APR -8 Z014
OATE: 
TO: 	 Daniel R. Levinson 
Inspector C1eneral 
FROM: 	 ~aiilyn Tavenner 
Adn1inisttaJor 
SUBJECT: 	 Office of Inspector General (01C1) Drafi Report:  Improper Payments for 
Evaluation and Management Services Cost Medicare Billions in 20 I 0 (OU-04
10-00181) 
Thank you tor the opportunity to review and comment on the ahov..: subject O!Ci draft report. 
The Centers for Medicare & Medicaid Services (CMS) appreciates th~: time and r..:sources that 
OIG used to review these important services. OICJ's report identiftes and addresses improper 
hilling and payments for Part B services relating to evaluation and management (ElM) services 
in 2010.  OIG's study reports that in 2010, Medicare inappropriately paid $6.7 billion for claims 
for E/M services that were incorrectly coded and/or lacking documentation, representing 21 
or 
percent  Medicare payments for E/M services that year.  Incorrectly coded claims included 
both up coding (26 percent) and clown coding ( 14.5 percent).  Additionally, O!G found that high
coding physicians' claims were more likely to be incorrectly coded or insufficiently documented 
than other physicians' claims.  We are working to lurther reduce these improper payments 
through a combination of education and medical review activities. 
The 010 recommendations and CMS responses to those rewmmendations arc discussed below. 
OIG Recommendation 
The 010 recommends that CMS consolidate the 1995 and 1997 Docunwnt:uion Guidelines [(,)r 
Evaluation and Management Services. 
C~S Response 
The CMS docs not concur with the recommendation that we ~:onsolidate the 1995 and 1997 
documentation guidelines.  In December 2010. CMS issued the Evaluation and tvlanagement 
Guide that is designed to provide education on evaluation and managemern services. It includes 
inlon11ation on medical record document8tion. billing and coding considerations. as well as 
inf(mllation on the 1995 and 1997 documentation guidclint!s.  Additionally. we recently made 
available via the Ov!S website. h!.\J2:/Iwww.cms.gov/Outreach-and-Education(Mcdic.m:~: 
I eaminn-N,etwork-;'vlLN/MLNl;dWeh~)uideiEMIJO(jllml, a "Frequ.:nlly Asked Questions" 
document that emphasizes the ability to use the 1995 or 1997 guidelines lor an extended his10ry 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  37   
   
 
    
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  38 
   
   
 
 
   
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  39 
   
   
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 Durley, Deputy Regional Inspector General.   
Rachel Bessette served as the lead analyst for this study.  Other principal 
Office of Evaluation and Inspections staff from the Atlanta regional office 
who contributed to the report include Michelle Verges.  Central office staff 
who provided support include Kevin Farber, Althea Hosein, 
Kevin Manley, and Christine Moritz.  
 
 
 
Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010 (OEI-04-10-00181)  40 
   
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 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.