Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Medicare Reimbursement For 
Critical Care Services 
FEBRUARY 2001 
OEI-05-00-00420  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), mandated by Public Law 95-452, as 
amended by Public Law 100-504, is to protect the integrity of the Department of Health and 
Human Services programs as well as the health and welfare of beneficiaries served by them.  This 
statutory mission is carried out through a nationwide program of audits, investigations, 
inspections, sanctions, and fraud alerts.  The Inspector General informs the Secretary of program 
and management problems and recommends legislative, regulatory, and operational approaches to 
correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Chicago office prepared this report under the direction of William C. Moran, Regional 
Inspector General and Natalie Coen, Deputy Regional Inspector General.  Principal OEI staff 
included: 
REGION  HEADQUARTERS 
Linda Paddock, Project Leader  Jennifer Antico, Program Specialist 
Thomas Komaniecki, Team Leader  Tricia Davis, Program Specialist 
Michael Barrett, Program Analyst  Brian Ritchie, Technical Support Staff 
Scott Horning, Program Analyst 
To obtain copies of this report, please call the Chicago Regional Office at (312) 353-9867. 
Reports are also available on the World Wide Web at our home page address: 
http://www.hhs.gov/oig/oei  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To examine the use of and Medicares reimbursement for critical care codes. 
BACKGROUND 
Critical care is the direct delivery of medical care for a critically ill or injured patient.  To 
be considered critical, an illness or injury must acutely impair one or more vital organ 
systems such that the patients survival is jeopardized.  Critical care is usually, but not 
always, given in a critical care area, such as the coronary care unit, intensive care unit, 
respiratory care unit, or emergency care unit.  In 1999, Medicare spent $353 million on 
critical care services. 
The Health Care Financing Administration (HCFA) as well as local carriers and 
practitioners have voiced concerns regarding Medicares reimbursement for critical care as 
it relates to: 
<  the provision of critical care services by provider specialties not usually associated 
with critical care (e.g., podiatrists), 
<  reimbursements for services included in the critical care service which should not be 
separately billed, and 
<  excessive amounts of services billed. 
We conducted a statistical analysis of 100 percent of all critical care claims for 1998 and 
1999 and of a 1 percent sample of all Medicare claims for 1999.  We spoke with staff from 
HCFA as well as six Medicare contractors regarding critical care policy and claims 
processing.  We only examined the issues above; we did not conduct a medical review to 
determine whether the billing for critical care was appropriate or necessary. 
FINDINGS 
Ten Physician Specialties Receive the Majority of Critical Care Payments 
Internal medicine and pulmonary disease account for nearly 50 percent of critical care 
claims submitted, while eight other specialties account for approximately 40 percent.  In 
1999, nurse practitioners, physician assistants, and clinical nurse specialists received 
Medicare payments for critical care services totaling $325,535 (0.09 percent of total spent 
on critical care). 
Critical Care Reimbursement  OEI-05-00-00420  Critical Care Services Are Not Being Unbundled 
Contractors are not paying for services that should be bundled into critical care codes. 
Based on our analysis of 1999 data, we estimate that carriers allowed only 2,900 services 
for a total of $51,800 that should have been bundled into critical care payment. 
Questionable Payments for Services Have Dropped 
Carrier payments continue for services billed beyond the first hour on a given day without 
a corresponding bill for the first hour on that day, but dropped 74 percent between 1998 
and 1999. 
CONCLUSION 
Based on our analysis, we found that very few problems exist in the specific areas of 
concern outlined in this report.  We believe the few problems that we identified can be 
efficiently corrected by HCFA requesting carriers to refine payment system edits and 
clarify or correct local payment policy statements.  Again, we must caution that we did not 
conduct a medical review to determine the appropriateness or necessity of the critical care 
provided. 
ii 
Critical Care Reimbursement  OEI-05-00-00420  T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

FINDINGS

Ten Physician Specialities Receive the Majority of Critical Care Payments  . . . . . . . . . . .  4

Critical Care Services Are Not Being Unbundled  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Questionable Payments for Services Have Dropped  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

iii 
Critical Care Reimbursement  OEI-05-00-00420  I N T R O D U C T I O N  
PURPOSE 
To examine the use of and Medicares reimbursement for critical care codes. 
BACKGROUND 
Critical care is the direct delivery of medical care for a critically ill or injured patient.  To 
be considered critical, an illness or injury must acutely impair one or more vital organ 
systems such that the patients survival is jeopardized.  This care requires that a 
practitioner make highly complex decisions to treat single or multiple vital organ systems 
failures or to prevent further deterioration of those organ systems.  Care may require 
extensive interpretation of multiple data sources and the application of advanced 
technology to manage the patient.  Therefore, critical care services require frequent, 
personal assessment and manipulation by a practitioner to support a patients life. 
Critical care is usually, but not always, given in a critical care area, such as the coronary 
care unit, intensive care unit, respiratory care unit, or emergency care unit.  However, 
providing medical care to patients located in critical care areas does not automatically 
result in a patient receiving critical care services.  Practitioners may provide critical care 
on multiple days provided that the patients condition continues to require the level of 
attention described above. 
Critical care is a time based code (i.e., the practitioners total duration of time spent 
providing critical care services is reported, even if the time spent is not continuous).  The 
time that a practitioner can report as critical care is the time spent engaged in work 
directly related to the individual patients care whether that time was spent either at the 
immediate bedside or elsewhere on the floor or unit.  However, a practitioner may not 
report time spent outside of the unit or off the floor as critical care because the 
practitioner is not immediately available to the patient.  A practitioner may not report time 
spent that does not directly contribute to the treatment of the patient as critical care, even 
if performed in the critical care unit. 
Medicare Reimbursement 
The Health Care Financing Administration (HCFA) contracts with private insurance 
companies called carriers to process bills for services delivered by physician and 
non-physician practitioners. 
1 
Critical Care Reimbursement  OEI-05-00-00420  Medicare reimburses physicians, as well as non-physician practitioners,1 for evaluation and

management services, including critical care services, provided to Medicare beneficiaries. 

Practitioners use Current Procedural Terminology (CPT)2 code 99291 to report up to the

first hour of critical care on a given date of service.  A practitioner should report less than

30 minutes of critical care time using another evaluation and management code.  To report

each additional 30 minutes beyond the first hour of critical care, practitioners use 99292. 

A practitioner may also use 99292 to report the final 

15-30 minutes of critical care on a given date, after the initial hour has been billed.  Only

one practitioner may bill for a given hour of critical care even if more than one practitioner

is providing care to a critically ill patient.

Medicare does not pay for certain procedures when these procedures are provided on the

same day by the same practitioner who billed for the critical care.  Medicare bundles

payment for these procedure codes into critical care codes 99291 and 99292.  Examples of

these procedures include:  ventilator management, interpretation of chest x-rays and

cardiac measurements, and vascular access procedures.

In 1999, Medicare reimbursed practitioners over $353 million for critical care services,

with the average rate for 99291 and 99292 services being $193.74 and 

$94.05 respectively.

Concerns 
In 1999, the rate of reimbursement for critical care was reduced because of a change in the

CPT definition of critical care services.  Effective with the publication of 

CPT 2001 in January 2001, the definition has again been revised and reimbursement rate

increased.  Because of HCFAs ongoing efforts with these payment policy revisions,

officials are interested in reviewing utilization patterns to identify unintended

consequences of these program changes and correct any over or undervalued CPT codes. 

Additionally, several local carriers, practitioners, and HCFA staff have voiced concerns

regarding Medicares reimbursement for critical care as it relates to:

<  the provision of critical care services by provider specialties not usually associated 
with critical care (e.g., podiatrists), 
<  reimbursements for services included in the critical care service which should not be 
separately billed, and 
<  excessive amounts of services billed. 
1	 Section 4511 of the Balanced Budget Act of 1997 removes the restriction on settings for services 
furnished by nurse practitioners, clinical nurse specialists and physician assistants. Payments are 
allowed for services furnished in all settings by these health care professionals but only if no 
facility or other provider charges, or is paid in connection with the service. Payment is equal to 
the lesser of 80 percent of the actual charge or 85 percent of the physician fee schedule. 
2	 Current Procedural Terminology is a listing of descriptive terms and identifying codes for 
reporting medical services and procedures performed by physicians. 
2 
Critical Care Reimbursement  OEI-05-00-00420  METHODOLOGY 
We spoke with staff from HCFA as well as staff from six regional carriers.  These carriers

represented 32 percent of critical care claims processed.  We spoke with carrier staff

regarding their processing of claims, guidance to providers, and whether they had in place

processes for detection of potentially inappropriate payments for critical care codes.  We

further questioned staff regarding their experience with separately billed services such as

x-rays and ventilator management.  In addition, we reviewed relevant HCFA and Carrier

Manuals regarding critical care.

In addition to our discussions with HCFA and carrier staff, we obtained 100 percent of all

critical care claims for 1998 and 1999 from the National Claims History Data File

maintained by HCFA.  We examined claims submitted and the processing of these critical

care claims.  We used SAS, a statistical program, to examine whether there were unusual

patterns in the use of critical care codes by specialties or locations such as emergency

rooms, intensive care units, or homes.  We also used these data to identify 

non-physicians providing critical care to beneficiaries.  In addition, we identified claims for

a second half-hour of critical care without a corresponding claim for the first hour of that

care.  We did not conduct a medical review to determine whether the billing for critical

care was appropriate.

Using a 1 percent sample of all 1999 Medicare claims, we identified providers submitting

claims for procedures included in the critical care payment.  All findings presented in this

report are based on analysis of claims data.

Our review was limited to the issues identified in the previous section.  We did not

conduct a medical review to determine the appropriateness or necessity of the critical care

provided.

We conducted our review in accordance with the Quality Standards for Inspections

issued by the Presidents Council on Integrity and Efficiency.

3 
Critical Care Reimbursement  OEI-05-00-00420  F I N D I N G S  
Ten physician specialties receive the majority of critical care 
payments 
Two specialities receive over 50 percent of Medicares reimbursement for critical 
care 
In both 1998 and 1999, Medicare reimbursed internal medicine and pulmonary disease 
specialties over $182 million in reimbursement for critical care services.  Table 1 below 
provides the top ten specialties billing for critical care services.  These specialties account 
for 90 percent of all critical care bills submitted to Medicare.  Fifty-four different 
specialities split the remaining 10 percent of Medicare reimbursement for critical care. 
TABLE 1 
1998  1999 
Allowed  Percent of  Allowed  Percent of 
Specialty  Dollars  Dollars  Dollars  Dollars 
Internal Medicine
 $112,550,171  31.72%  $112,046,160  31.67% 
Pulmonary Disease
 70,997,003  20.01%  70,518,443  19.93% 
Cardiology
 38,646,726  10.89%  36,029,972  10.18% 
Emergency Medicine
 23,136,231  6.52%  24,697,832  6.98% 
Family Practice
 20,320,736  5.73%  20,011,506  5.66% 
Critical Care Intensivists
 15,667,979  4.42%  15,354,204  4.34% 
Multispecialty Clinic or Group Practice  14,021,552  3.95%  14,627,546  4.13% 
General Surgery  9,408,774  2.65%  9,553,924  2.70% 
General Practice  9,549,761  2.69%  8,695,531  2.46% 
Nephrology  8,654,139  2.44%  9,309,653  2.63% 
TOTAL (10 Specialties)  $322,953,072  91.02%  $320,844,771  90.70% 
OVERALL TOTAL  $354,804,520  100.00%  $353,760,445  100.00% 
Source: HCFA 100 Part B Claims File 
Non-physician practitioners receive a small percentage of total reimbursement 
for critical care services 
The Balanced Budget Act of 1997 removed the restrictions on the settings in which 
non-physician practitioners can provide services.  Some local carriers and practitioners 
voiced concern that non-physician practitioners were providing increasing amounts of 
critical care.  Non-physician practitioners can provide critical care as long as they are 
permitted to perform such care in the State in which they are registered.  In 1998, 
4 
Critical Care Reimbursement  OEI-05-00-00420  Medicare reimbursements for critical care provided by nurse practitioners, clinical nurse 
specialists, and physician assistants totaled $137,697.  While reimbursement for these 
non-physician practitioners increased to $325,535 in 1999, payments remain less than 0.09 
percent of total spent on critical care. 
Critical care services are not being unbundled 
Our review of a 1 percent sample of HCFAs National Claims History file reveals few 
providers are submitting claims for procedures that should be included as part of the 
critical care payment and not be billed separately.  Discussions with carriers reveal they 
have systems edits in place which should prevent payment for these services when 
performed by the same physician during the critical care period.  Based on our analysis of 
1999 data, we estimate that carriers allowed only 2,900 services for a total of $51,800 that 
should have been bundled into the critical care payment. 
Questionable payments for services have dropped 
Medicare payments for the first hour of critical care (99291) have remained constant since 
1996, while payments for additional time beyond the first hour in a day (99292) has 
dropped.  Our analysis of 100 percent of critical care claims payments made in 1998 
reveals that more than 34,000 claims for code 99292 critical care services without a 
corresponding 99291 claim (more than $3.3 million in payments) were processed.  In 1999 
this figure dropped by 74 percent to 8,885 claims ($928,034). 
While most carriers advise that they have systems edits in place designed to prevent this 
occurrence, one carrier provided the following scenario and local policy guidance to 
support billing for 99292 services without a corresponding 99291.  If a patient is admitted 
and receives 1 14 hours of evaluation and management care, immediately followed by 
14 hour of critical care, the physician could record 1 14 hours under evaluation and 
management and the last 14 hour of critical care could be coded as 99292.  The local 
policy statement reads: 
Instances when a critically ill patient is seen for the first time, either as an 
admission E/M (evaluation and management) or on consultation or referral and this 
service is immediately followed by a period of critical care service, the physician 
may bill using either of these options: 
<	 Combine and bill all services as critical care services using time spent for 
defining billing charges. 
<	 Bill the admission E/M or the consultation service as a separate service 
from the critical care service.  If this method is used, the time spent in 
performing the admission or consultation cannot be included in the critical 
care time billed.  Furthermore, the admission or consultation service billed 
must meet all of the documentation and time requirements listed under 
CPT of those services. 
5 
Critical Care Reimbursement  OEI-05-00-00420  Although this analysis of the local medical policy points to a potential problem, it is 
important to note that this carrier processed few Medicare claims and paid less than 
2 percent of the national allowed dollars for critical care services in 1999.  While we did 
not collect local policy guidance from other carriers processing critical care claims, the 
reduction in claims and payments for 1999 suggests this payment of 99292 without 99291 
is not a common problem. 
6 
Critical Care Reimbursement  OEI-05-00-00420  CONCLUSION 
Based on our analysis, we found that very few problems exist in the specific areas of 
concern outlined in this report.  We believe the few problems that we identified can be 
efficiently corrected by HCFA requesting carriers to refine payment system edits and 
clarify or correct local payment policy statements.  Again, we must caution that we did not 
conduct a medical review to determine the appropriateness or necessity of the critical care 
provided. 
7 
Critical Care Reimbursement  OEI-05-00-00420