Department  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
FRAGMENTED  PHYSICIAN  CLAIMS 

SEPTEMBER  1992 
 OFFICE  OF  INSPECTOR  GENERAL 
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 three  OIG  operating  components:  the Office of Audit  Services, the 
Office  of Investigations,  and the Office of Evaluation  and Inspections.  The OIG  also informs 
the Secretary of HHS  of program, and management problems, and recommends courses to 
correct  them. 
OFFICE  OF  AUDIT  SERVICES 
The OIGs  Office of Audit  Services (OAS)  provides all 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 
assessmentsof HHS  programs and operations  in order  to reduce waste, abuse, and 
mismanagement and to promote  economy and efficiency throughout  the Department. 
OFFICE  OF  INVESTIGATIONS 
The OIGs  Office of Investigations  (01)  conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing  in HHS  programs or to HHS  beneficiaries  and of 
unjust enrichment  by providers.  The investigative efforts of 01 lead to criminal  convictions, 
administrative  sanctions, or civil money penalties.  The 01 also oversees State Medicaid  fraud 
control  units which  investigate and prosecute fraud and patient  abuse in the Medicaid  program. 
OFFICE  OF  EVALUATION  AND  INSPECTIONS 
The OIGs  Office of Evaluation  and Inspections  (OEI)  conducts short-term  management and 

program evaluations  (called inspections)  that focus on issues of concern to the Department, 

the Congress, and the public.  The findings and recommendations  contained  in these inspection 

reports  generate rapid, accurate, and up-to-date  information  on the efficiency, vulnerability, 

and effectiveness of departmental  programs. 

This report  was prepared  by the Health  Care Branch, Office of Evaluation  and Inspections. 

The following  persons participated  in the project: 

Cathaleen  A. Ahern 

David C. Hsia, M.D.,  J.D., M.P.H. 

Brian  P. Ritchie 

To obtain  a copy of this report,  call the Health  Care Branch at (410) 966-3148. 
 Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
FRAGMENTED  PHYSICIAN  CLAIMS 
 EXECUTIVE  SUMMARY 
PURPOSE 
The  Office  of  Inspector  General  (OIG)  conducted  this  study  to  examine  patterns  of 
physician  billing  in  certain  cases in which  a Medicare  beneficiary  underwent  more  than 
one  surgical  procedure  on  the  same day. 
BACKGROUND 
This  study  illustrates  the  types  of claims  discussed  in  a September  1991 OIG  report, 
Manipulation  of Procedure  Codes  by Physicians  to  Maximize  Medicare  and  Medicaid 
Reimbursement.  Another  Office  of  Inspector  General  inspection,  of liver  biopsies, 
identified  a high  rate  of fragmented  claims  - those  in which  a physician  billed  for 
opening  the  abdomen  and  removing  the  gallbladder  as well  as biopsying  the  liver,  for 
example.  In  this  example,  only  the  gallbladder  removal  should  be billed  for;  the 
biopsy  should  not  be  since  it was not  a separate  procedure  as defined  in  the 
guidelines  of Phvsicians  Current  Procedural  Terminologv  (CPT-4)  and  the  laparotomy 
(incision)  should  not  be  as it was only  an approach  to  the  gallbladder. 
Because  63 percent  of all  surgical  cases in that  sample  were  fragmented,  the  OIG 
examined  billing  and  payment  data  for  other,  similar  surgeries,  using  1988 claims. 
METHODS 
From  a list  of  codes  for  exploratory  surgery  and  biopsies,  6 codes with  potential  for 
incorrect  billing  were  selected  for  further  review.  The  6 codes  for  biopsy  and/or 
exploration  were  claimed  240,800  times  for  $54,660,400  (projected);  another  surgical 
code  was billed  on  the  same day  160,300  times,  for  $79,653,600  (projected).  These 
codes  were  further  examined.  An  OIG  physician  determined  which  surgical 
procedures  could  reasonably  be performed  and  properly  billed  on  the  same day.  The 
remaining  combinations  of procedures  are  discussed  in this  report. 
FINDINGS 
Physicians  frequently  billed  for  biopsies  and/or  explorations  which  were  part  of 
another  surgical  procedure,  realizing  as a result  more  than  $12 million  in 
overpayments  in  1988: 
. 	 Projected  overpayments  associated  with  two  exploratory  surgery  codes,  and  with 
surgical  biopsies  of the  liver  and  pancreas,  total  $7,620,565  for  1988. 
. 	 Projected  overpayments  for  separate  procedures  claimed  inappropriately 
totalled  $3,404,100. 
i  . 	 Projected  overpayments  for  secondary  procedures  that  should  have  been  denied 
as duplicative  or  mutually  exclusive  totalled  $1,721,600. 
RECOMMENDATION 
The  Health  Care  Financing  Administration  should  require  carriers  to  deny  or  adjust 
payment  for: 
(1)  exploratory  surgery  performed  incidently  to  a procedure  separately  billed, 
(2) 	 biopsies  performed  in the  course  of more  major  surgery  in  the  same body 
cavity, 
(3)  separate  procedures  billed  with  another  procedure, 
(9  mutually-exclusive  procedures,  and 
(5)  claims  by assistants  for  procedures  denied  when  billed  by surgeons. 
Proper  denial  of such  claims  can be  accomplished  by creating  screens  which  reject 
exploration  codes  billed  with  any related  code,  adjust  biopsy  codes when  billed  with 
more  major  surgery,  reject  codes  for  separate  procedures  unless  they  are  the  only 
procedure  claimed,  reject  duplicative  and  mutually-exclusive  procedures,  and  pay 
assistants  only  when  the  surgeon  may be paid  for  a procedure. 
In  HCFAs  response  to  the  draft  report,  they  concurred  in  part  with  these 
recommendations  and  identified  additional  steps they  have  taken  which  address  some 
of these  concerns.  We  removed  from  the  overpayment  calculation  two  sets of codes 
dealing  with  breast  biopsies  and  bone  marrow  biopsies.  While  we  continue  to believe 
these  represent  fragmented  billing,  HCFA  believes  they  represent  permissible  coding. 
We  have  retained  the  recommendation  dealing  with  payments  to  assistants  at surgery, 
and  will  more  fully  develop  this  issue in  a future  inspection.  The  HCFAs  comments 
are  included  in  their  entirety  as appendix  E. 
ii  TABLE  OF  CONTENTS 
EXECUTIVE  SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i 

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

PURPOSE  ...................................................  1 

BACKGROUND  ..............................................  1 

METHODS  ..................................................  2 

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4 

RECOMMENDATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8 

APPENDIX  A:  Laparotomies 

APPENDIX  B:  Breast  and  Bone  Marrow  Biopsies 

APPENDIX  C:  Liver  and  Pancreas  Biopsies 

APPENDIX  D:  Separate  Procedures 

APPENDIX  E:  HCFAs  Comments 
 INTRODUCTION 
PURPOSE 
The  Office  of  Inspector  General  (OIG)  conducted  this  study  to  examine  patterns  of 
physician  billing  in  certain  cases in which  a Medicare  beneficiary  underwent  more  than 
one  surgical  procedure  on  the  same  day. 
BACKGROUND 
Other  OIG  Studies  This  study  illustrates  the  types  of claims  discussed  in the 
September  1991 OIG  report,  Manipulation  of Procedure  Codes  by Physicians  to 
Maximize  Medicare  and  Medicaid  Reimbursement. 
In  another  inspection,  on  liver  biopsies,  the  OIG  selected  a random  1 percent  sample 
of  claims  for  Medicare  patients  who  underwent  liver  biopsies  (procedure  codes  47000 
and  47100).  This  process  identified  329 claims,  representing  273 patients  and  290 
biopsies.  In  all but  17 cases, the  OIG  was  able  to identify  the  hospital  in which  the 
biopsy  took  place.  The  OIG  requested  the  entire  medical  record  from  each  of the 
hospitals.  The  final  sample  consisted  of 289 claims  for  237 patients  representing  253 
procedures. 
Thirteen  percent  (39  of 289 claims)  were  miscoded,  claiming  a wedge  was performed 
when  actually  a needle  sample  was  taken,  or vice versa,  or  billing  when  no  biopsy,  or 
no  procedure  at all, was  performed.  Surgeons  billed  for  both  a biopsy  and  an 
exploratory  laparotomy  in  14 claims.  In  82 of  128 claims,  surgeons  billed  for  a liver 
biopsy  as well  as a more  major  procedure  such as a gallbladder  removal.  Our  findings 
from  this  study  are  reported  in the  December  1991 OIG  report,  Liver  Biopsies. 
These  findings  led  us to  further  examine  the  payment  for  exploratory  surgery  and 
biopsies  when  performed  with  another  surgical  procedure. 
Coding  Concems  The  most  important  coding  issue discussed  in  this  report  is what  is 
called  fragmentation.  Even  the  simplest  surgical  procedure  involves  many  steps, 
from  the  preparation  of the  skin  to  the  incision  to  the  control  of bleeding  and  eventual 
suture  of the  incision.  All  of these  steps are  integral  to  the  procedure  itself;  other,  less 
obvious,  links  exist between  the  major  procedure  being  performed  and  other  minor 
procedures  which,  when  performed  alone,  can be coded  separately.  Examples  of the 
latter  procedures  are  discussed  in  this  report. 
The  guidelines  given  to  surgeons  in Phvsicians  Current  Procedural  Terminolorrv  (CPT-
4),  issued  by the  American  Medical  Association,  discuss when  a procedure  may be 
considered  a separate  procedure  for  reporting  and  billing  purposes. 
1 
 SEPARATE  PROCEDURE:  Some  of the  listed  procedures  are  commonly 
carried  out  as an integral  part  of a total  service,  and  as such  do  not  warrant  a 
separate  identification.  When,  however,  such  a procedure  is performed 
independently  of, and  is not  immediately  related  to,  other  services,  it may be 
listed  as a separate  procedure.  Thus,  when  a procedure  that  is ordinarily  a 
component  of  a larger  procedure  is performed  alone  for  a specific  purpose,  it 
may  be  considered  to be  a separate  procedure.  (Phvsicians  Current  Procedural 
Terminologv.  copvright  1988.1990.) 
A  gastrostomy,  for  example,  is the  creation  of an artificial  opening  in the  stomach.  It 
is usually  done  as a component  of surgery  in which  a cancerous  or  ulcerated  part  of 
the  stomach  is removed.  However,  when  performed  independently  of, and  not 
immediately  related  to,  other  services,  it may be listed  as a separate  service.  This 
would  occur,  for  example,  when  a malnourished  patient  had  to  have  a tube  for  feeding 
placed  directly  into  the  stomach,  through  the  skin. 
If  a carrier  were  to  pay  separately  for  an exploratory  laparotomy  (incision),  a liver 
biopsy,  and  a cholecystectomy  (removal  of the  gallbladder),  as did  occur  in the  sample 
of  claims  reviewed  for  the  liver  biopsy  study,  the  surgeon  would  in  effect  be paid  three 
times  for  opening  the  abdomen. 
METHODS 
The  source  of the  data  examined  in  this  study  is the  1988 BMAD  file  of procedures,  a 
1 percent  sample  of  all  procedures  for  which  Medicare  was billed.  From  a list  of 
HCPCS  codes  for  exploratory  surgery  and  biopsies,  6 codes with  potential  for  incorrect 
billing  were  selected  for  further  review.  The  6 codes  selected  were  billed  199,500 
times  in  1988; total  allowed  amounts  for  these  procedures  exceeded  $54 million 
(projected).  Anoth  er surgical  code  was billed  on the  same  day for  the  same patient 
160,300  times,  for  more  than  $79 million  (projected). 
These  claims  include  those  in which  an anesthesiologist  billed  a different  code  than  the 
surgeon  did,  creating  the  appearance  of multiple  surgeries.  These  claims  were 
eliminated.  An  OIG  physician  determined  which  surgical  procedures  could  reasonably 
be performed  and  properly  billed  on  the  same day.  These  were  also  eliminated,  along 
with  instances  in which  too  little  information  was provided  to  make  an assessment. 
Thus  the  overall  sample  was reduced  from  3,598 line  items  to  1,599, largely  due  to 
eliminating  those  cases in which  the  anesthesia  bill  gave the  appearance  of multiple 
procedures  having  been  performed. 
Limitations  of the Data  Since  this  inspection  examined  only  billing  data,  errors  in 
those  data  could  distort  the  results.  For  example,  claims  by anesthesiologists  were 
eliminated  from  the  sample.  If  the  codes  for  type  of service  or  specialist  were  in 
error,  some  anesthesia  claims  may be intermingled  with  the  claims  for  surgeons  and 
their  assistants.  (Some  anesthesia  claims  which  were  eliminated  were  shown  as a 2 
(surgery)  for  type  of service,  but  as an 05  (anesthesia)  for  specialist  type.)  We  did 
2  not  examine  beneficiary  histories  to  attempt  to  reconstruct  a billing  history,  nor  did  we 
examine  medical  records. 
The  numbers  of claims  referred  to  in the  sample  have  been  projected  to  their 
numbers  in  the  universe  of  1988 claims.  Numbers  under  2,000  (i.e.,  20 sample  claims) 
have  a wide  margin  of  error.  They  are  shown,  however,  since  they  may be  easily 
identified  by carriers  screening  processes. 
3 
 FINDINGS 
Physicians  frequently  billed  for  biopsies  and/or  explorations  which  were 
part  of  another  surgical  procedure,  realizing  as a result  more  than  $12 
million  in  overpayments  in  1988. 
Projected  overpayments  associated  with  two  exploratory  surgery  codes,  and  with 
surgical  biopsies  of the  liver  and  pancreas  total  $7,620,565  for  1988. 
The  overpayments  identified  in  this  report  are  shown  in  detail  in Appendices  A 
through  D.  The  spreadsheets  are  labeled  with  the  code  which  triggered  the  review. 
The  principal  procedure  for  which  this  review  determined  payment  could  be allowed  is 
identified  in  the  left  hand  columns.  When  only  separate  procedures  were  billed,  the 
procedure  with  the  highest  allowed  amount  was identified  as principal  and  all  others 
denied.  The  discussion  below  documents  our  findings  and  concerns,  as well  as 
identifying  corrective  measures  taken  by HCFA  to  address  some  of these  issues. 
FraPmenting  laparotomy  claims: 
Laparotomy  is the  term  used  for  surgical  incision  of the  abdomen;  not  to be 
confused  with  laparoscopy,  in which  an instrument  is inserted  through  a small  slit 
into  the  abdomen.  Some  abdominal  surgery,  e.g., appendectomies,  can be  performed 
through  small  incisions.  A  laparotomy,  however,  is necessarily  the  first  step  in  major 
surgery  of the  abdomen;  an exploratorv  laparotomy  is undertaken  when  the  surgeon 
does  not  know  what,  if any, definitive  surgery  will  be needed.  Occasionally  no  further 
surgery  will  be performed,  e.g., when  cancer  is so widespread  that  removing  an organ 
would  not  help  the  patient.  In  such cases, the  surgeon  correctly  bills  Medicare  for 
having  performed  an exploratory  laparotomy. 
When  more  major  surgery  is performed,  however,  the  laparotomy  is only  the  initial 
stage  of  that  surgery.  For  example,  if the  surgeon  discovers  a cancerous  condition 
which  necessitates  removing  part  of the  colon,  he or  she would  bill  for  the  colectomy 
(removal  of  all  or  part  of the  colon),  but  not  for  the  laparotomy,  nor  for  biopsies  or 
an incidental  appendectomy.  If,  during  the  same surgery,  the  surgeon  also created  a 
colostomy  (an  opening  from  the  colon  to  the  surface  of the  body),  he or  she could  bill 
for  that,  using  the  code  which  incorporates  both  the  colectomy  and  colostomy.  The 
same  principle  would  apply  to  a third  or  fourth  distinct  procedure.  It  is perfectly 
appropriate  to  file  claims  for  as many  procedures  as were  performed,  but  not  to 
fragment  any  one  procedure  into  its component  parts. 
Particularly  egregious  use of the  exploratory  laparotomy  code  is in combination  with 
those  codes,  such  as 43605  (biopsy  of stomach  by laparotomy)  and  49220  (staging 
celiotomy  [laparotomy]  for  Hodgkins  disease  or  lymphoma  [includes  splenectomy, 
needle  or  open  biopsies  of both  liver  lobes,  possibly  also removal  of abdominal  node 
and/or  bone  marrow  biopsies,  ovarian  repositioning]),  in which  the  laparotomy  is 
4  inherent  in  the  verbal  description  of the  code.  This  may,  however,  represent  an effort 

by the  physicians  billing  staff  to  find  codes  describing  what  the  procedure  was, fully 

expecting  the  carrier  to  pay  only  the  correct  code. 

Intra-operative  breast  biopsies: 

The  claims  associated  with  incisional  breast  biopsies  were  for  the  removal  of cysts or 

for  mastectomies  (removal  of the  breast).  Draft  Medicare  Carriers  Manual 

instructions  provide  for  rebundling  biopsies  into  payments  for  cyst excisions  and  for 

mastectomies,  but  do  not  require  denial  of multiple  claims  for  excisions.  While  the 

methodology  for  claims  review  in this  study  allowed  two  mastectomy  codes  (as 

presumably  involving  both  breasts),  the  manual  instructions  deny  secondary 

mastectomy  codes when  the  principal  procedure  is a mastectomy.  Correct  use of left 

and  right  modifiers  should  allow  for  more  precise  assessment. 

The  HCFAs  response  to  the  draft  version  of this  report  indicate  that  they  believe 

biopsies  billed  with  excisions  and  mastectomies  are  permissible  (presumably  referring 

to  the  one-stage  approach  to  diagnosing  and  excising  cancerous  tumors).  We  have 

retained  Appendix  B detailing  these  procedures,  but  have  deleted  the  amounts  paid 

from  the  overpayment  calculation. 

Claims  from  two  surgeons,  neither  an assistant: 

A  chance  finding  was  20 cases in which  a second  surgeon  billed  for  the  laparotomy, 

without  indicating  assistant  status,  and  was paid  as though  s/he were  the  primary 

surgeon.  The  CPT  instructions  provide  for  two  surgeons  or  for  a surgical  team  in 

certain  instances.  One  surgeons  billing  for  the  laparotomy  while  another  bills  for  a 

gallbladder  extraction  does  not  meet  the  criteria  discussed  in CPT. 

For  example,  two  surgeons  billed  for  operating  on  the  same patient  on  the  same day. 

One  was  allowed  $1342  for  a hemigastrectomy  (removal  of half  of the  stomach);  the 

other,  although  not  identified  as an assistant,  $517.  The  first  surgeon  was  allowed 

$245  for  a liver  biopsy;  the  second  $219, plus  $235 for  an omentectomy  (removal  of 

abdominal  tissue).  Both  the  biopsies  and  the  omentectomy  are  separate  procedures, 

not  allowable  when  billed  with  more  major  procedures.  The  second  payment  for  the 

hemigastrectomy  is 42 percent  of the  first;  the  second  liver  biopsy  payment  is 89 

percent  of the  first. 

The  Carriers  Manual  section  referred  to  above  would  require  denial  of 

omentectomies,  laparotomies,  and  various  other  incidental  procedures  when 

hemigastrectomy  is the  principal  procedure.  Several  other  major  abdominal 

procedures  (e.g.,  colectomy  and  cholecystectomy)  have  similar,  although  less extensive, 

lists  of  codes  to be  rebundled.  This  still  allows  for  many  of the  overpayments 

identified  in  this  report,  both  for  major  procedures  for  which  rebundling  is not 

required,  and  for  those  separate  and  incidental  procedures  not  listed. 

5 
 Claims  from  assistants  at surgery: 
In  13 cases in which  a primary  as well  as an assistant  surgeon  billed  for  a laparotomy, 
the  average  amount  allowed  the  assistant  was  $53, ranging  from  11 to  33 percent  of 
the  respective  surgeons  allowed  amount.  In  the  23 cases in which  an assistant  billed 
for  a laparotomy  but  a primary  surgeon  did  not,  the  average  amount  allowed  the 
assistant  was  $148.  We  did  not  attempt  to  determine  how  the  carriers  assigned 
allowed  amounts  to  the  solo  bills  of the  assistants,  but  may  study  this  issue separately. 
Medicare  Carriers  Manual  instructions  issued  in  October  1991 list  procedures  for 
which  assistants  may  not  bill.  The  only  impact  these  instructions  would  have  had  on 
the  claims  reviewed  in this  study  would  have been  denial  of $29.41  for  an assistant  at 
an incisional  breast  biopsy. 
Facility  codes  differing  from  surgeons  codes: 
Twelve  of the  exempted  claims  were  for  facility  fees as well  as anesthesia  and 
surgeons  fees for  breast  biopsies.  In  each  case, the  facility  coded  the  biopsy  code, 
although  the  surgeon  indicated  that  the  procedure  was a cyst excision,  or,  in  one 
instance,  a mastectomy.  The  ambulatory  surgical  center  (ASC)  payment  group  for  a 
biopsy  is the  same  as the  group  which  includes  cyst excision,  but  lower  than  the 
payment  the  ASC  could  have  received  for  a mastectomy. 
Projected  overpayments  for  separate  procedures  billed  inappropriately  totalled 
$3404,100. 
An  examination  of the  codes  billed  on the  same day for  the  same patient  reveals 
numerous  instances  of  combinations  that  are  contrary  to  the  guidelines  expressed  in 
CPT-4.  For  example,  billing  for  code  44005,  enterolysis  (cutting  internal  adhesions) 
for  bowel  obstruction  (separate  procedure),  at the  same time  as any other  surgery 
violates  CPT  guidelines.  Enterolysis  is typically  undertaken  either  because  the 
adhesions  are  causing  an acute  bowel  obstruction  or  incidental  to  another  reason  for 
having  opened  the  abdomen,  such as during  gallbladder  surgery.  In  either  case, a 
laparotomy  is merely  an approach  to  the  surgical  field,  and  should  not  be paid  for 
separately.  Additionally,  this  code  for  lysis of  adhesions  is limited  to  use in those  cases 
in which  the  lesions  cause  a bowel  obstruction.  Thus  code  44005  should  not  be billed 
when  the  adhesions  are  removed  incidentally. 
See Appendix  D  for  a list  of separate  procedures,  which  should  be  denied  when 
performed  with  any other  procedure. 
Projected  overpayments  for  secondary  procedures  that  should  have  been  denied  as 
duplicative  or  mutually  exclusive  totalled  $1,721,600. 
Since  the  codes  for  exploratory  surgery  include  any biopsies  that  were  performed,  any 
claim  for  a biopsy  of an abdominal  organ  on  the  same patient  on  the  same day 
6 
 represents  duplicate  billing.  In  these  cases, either  the  biopsy  claim  or  the  exploration 
claim  should  be  denied. 
The  primary  reason  for  erroneous  claims  associated  with  bone  marrow  needle  biopsies 
is billing  for  the  actual  aspiration  of the  material  to be  examined  by more  than  one 
physician,  or by  one  physician  twice.  In  86 instances,  both  codes  85095,  bone  marrow 
smear  and/or  cell  block,  aspiration  only,  and  85102,  needle  biopsy  of the  bone  marrow, 
were  billed  simultaneously.  Even  if one  was billed  by a surgeon  and  the  other  by a 
pathologist,  they  clearly  are  both  billing  for  performing  the  same  action.  The  HCFA 
disagrees  with  this  conclusion;  we  have  retained  Appendix  B, but  removed  the 
payment  amounts  from  the  overpayment  calculation. 
As  mentioned  earlier,  several  of the  claims  associated  with  breast  biopsies  were  for 
both  a partial  and  a radical  mastectomy.  We  assumed  that  this  indicated  surgery  on 
both  breasts,  so both  were  allowed. 
Multiple  procedures  within  one  code: 
Thirteen  claims  (26  line  items)  were  for  duplicate  codes  19120, excision  of cyst, 
fibroadenoma,  etc.,  ... , one  or  more  lesions.  We  believe  this  description  means  that 
on  any  one  occasion,  this  code  should  be used  for  all  the  cysts, etc., removed.  In  these 
cases, however,  both  were  allowed.  The  codes were  paid  at the  same rate  once,  one 
at half  of the  other  eight  times,  and  one  at a reduced  rate  four  times.  They  are  shown 
as deny  secondary  procedure  in Appendix  B. 
Mutually-exclusive  procedures: 
Cholecystectomies  are  the  procedures  most  often  fragmented  in  all  the  claims 
examined  as part  of this  report.  Several  were  reported  in  conjunction  with 
cholecystenterostomies,  a logical  impossibility,  since  the  cholecystectomy  code  means 
the  gallbladder  was  removed,  and  the  cholecystenterostomy  code  that  the  gallbladder 
was  connected  to  the  intestine.  This  concern  is not  addressed  by the  draft  instructions. 
7 
 RECOMMENDATION 

The  Health  Care  Financing  Administration  should  require  carriers  to  deny  or  adjust 
payment  for: 
(1)  exploratory  surgery  performed  incidently  to  procedure  separately  billed, 
(2) 	 biopsies  performed  in  the  course  of more  major  surgery  in the  same body 
cavity, 
(3)  separate  procedures  billed  with  another  procedure, 
(4)  mutually-exclusive  procedures,  and 
(5)  claims  by  assistants  for  procedures  denied  when  billed  by surgeons. 
Proper  payment  of such  claims  can be accomplished  by creating  screens  which  reject 
exploration  claims  billed  with  any related  code,  adjust  biopsy  claims  when  billed  with 
more  major  surgery  in  the  same body  cavity,  reject  claims  for  separate  procedures 
unless  they  are  the  only  procedure  billed,  reject  claims  for  duplicative  and  mutually-
exclusive  procedures,  and  pay  assistants  only  when  the  surgeon  may  be paid  for  a 
procedure. 
This  can best  be  done  by creating  software  which  examines  claims  according  to  a 
logical  clinical  sequence,  rejecting  for  development  (or  outright  denial)  those  claims 
which  fail  to  pass the  screens.  The  simplest  version  of this  software  would  merely 
reject  laparotomies  and  separate  procedures  done  in  conjunction  with  any other 
procedure,  without  further  analysis. 
The  HCFA  has created  series  of combinations,  which  address  some  of the  problems 
identified  in  this  report.  For  example,  laparotomies,  lysis of adhesions,  and 
omentectomies  are  denied  in  conjunction  with  certain  abdominal  procedures,  but  not 
with  many  others. 
The  HCFA  concurred  with  our  recommendations  concerning  exploratory  surgery  and 
payment  for  separate  and  mutually-exclusive  procedures.  They  disagree  that  biopsies 
should  not  be  paid  for  when  performed  in  the  course  of more  major  surgery,  but  have 
rather  identified  a lesser  payment  amount  which  does  not  pay  the  surgeon  again  for 
having  opened  the  abdomen.  In  their  technical  comments  they  disagreed  that 
demonstrated  unbundling  of breast  biopsies  and  bone  marrow  biopsies.  We  have 
retained  the  appendices  detailing  these  situations,  but  have  removed  the  payments  for 
them  from  our  overpayment  calculation.  We  will  expand  upon  our  examination  of 
assistants  at surgery  in  a future  study. 
8 
 APPENDIX  A 
Overpayrnem  ass&ted  with  code 49oo0,  Eapbratory  Lqamtomies,  and  with  49010, 
Retroperitoneal  Laparotomies 
A  -1 
 49000  EXPLORATORY  LAPAROTOMY,  EXPLORATORY  CELIOTOMY  OBS  DENY  ALLOW  ALLOW  DENY  DENY  DENY 
WITH  OR  WITHOUT  BIOPSY(S),  LAP,  PRINCIPAL  SECONDARY  SEPARATE  LAP,  SECONDARY 
SEPARATE  PROCEDURE  SURGEON  PROCEDURE  PROCEDURE  PROCEDURE  ASSISTANT  PROCEDURE 
34151  RENAL  EMBOLECTOMY  (ABDOMINAL  INCISION)  1  $1,925.30  $320.90 
38100  SPLENECTOMY  (SEPARATE  PROCEDURE);  TOTAL  2  $695.20  $1,429.85  $352.20 
38564  LIMITED  LYMPHADENECTOMY,  FOR  STAGING  (SEP PROC)  1  $366.50  $411.50  $100.00 
II I  I  I  I  II 

38770  PELVIC  LYMPHADENECTOMY  (SEP PROC);  UNILATERAL  I  1  I  $672.00  1  $212.50  1 
II I  I  1 I  I  I 
43500  GASTROSTOMY,  WITH  EXPLORATION  $1,069.60  $611.80  1  $534.80  1  $611.80  11 

II I  I  1 I  I  I  II 

43605  BIOPSY  OF STOMACH  BY  LAPAROTOMY  $336.00  I  $1344.00  $1,123.10 
43630 	 HEMIGASTRECTOMY  OR  DISTAL  GASTRECTOMY,  WITHOUT  2  $2,704.30  $235.00  $345.45 
VAGOTOMY 
43635 	 HEMIGASTRECTOMY  OR  DISTAL  GASTRECTOMY,  WITH  1  $291.00  $1,187.00 
VAGOTOMY 
43640 	 VAGOTOMY  INCLUDING  PYLOROPLASY,  WITH  OR  WITHOUT  3  $3,067.45  $147.68  $865.49  $471.44 

GASTRECTOMY  I 

43820  GASTROJEJUNOSTOMY  1  $800.00  $437.50  $798.50 
43830  GASTROSTOMY,  TEMP  (TUBE,RUBBER,PLASTIC)(SEP  PROC)  2  $1,254.10  $1,231.55  $152.10 
43840 	 GASTRORRHAPHY,  SUTURE  OF PERFORATED  ULCER,  3  $1,833.20  $606.90  $53.50 
WOUND  OR  INJURY 
II I  I  I  I  II 

44005  ENTEROLYSIS  FOR  BOWEL  OBSTRUCTION  (SEP PROC)  11  $2,233.45  1  $8,606.55  1  $1,511.50  1  $3%.64  1 
1 
DUODENOTOMY,  FOR  EXPLORATION,  BIOPSY(S),  OR  I  $1,088.20  $879.55 

FOREIGN  BODY  REMOVAL  I  I  II 

II I  I  1 I  %280I .90  I  I  II

44021  ENTEROTOMY,  SMALL  BOWEL;  FOR  DECOMPRESSION  $767.00  1  $56.20  1 
II I  I  1 I  I  I  II 

44050  REDUCTION  OF VOLWLUS,  INTUSSUSCEPTION,  BY  LAP  $1,069.60  I  $192.60  1 
II I  I  I  I  II 

44110  BIOPSY  OF  INTESTINE  BY  CAPSULE,  TUBE,  PERORAL  2  $336.00  I  $1,405.80  $432.00  1  $896.00  1 
44120 	 ENTERECTOMY,  RESECTION  OF SML  INTESTINE;  WITH  7  $1,603.30  $7,475.40  $365.60  $1,425.20  $3,014.65 

ANASTOMOSIS  I  I  I 

I  1 I  I  I  I 

44130  ENTEROENTEROSTOMY.  ANASTOMOSIS  fSEP PROC)  $1.180.00  $584.70 
44141 	 COLECTOMY,  PARTIAL;  WITH  SKIN  LEVEL  CECOSTOMY  OR  2  $175.00  $2,684.00 
COLOSTOMY 
44143 	 COLECTOMY,  PARTIAL;  WITH  END  COLOSTOMY,  CLOSURE  8  $478.60  $8665.25  $738.05  $1,530.50 
DISTAL  SEGMENT 
A-2 

E  I  I 
11 44145  1 COLECTOMY,  PARTIAL;  WITH  COLOPROCTOSTOMY  I  1  I  I  $1,571.90  I  $311.30  I 
II  I
44160  COLECTOMY  WITH  REMOVAL  OF TERMINAL  ILEUM  AND  1  $1,550.00  $820.90
ILEOCOLOSTOMY  I  I  I  I  I 
II  I  I  I  $868I.0  0  I  $264.I0  0  I 
44300  ENTEROSTOMY,  OR  CECOSTOMY,  TUBE  (SEP PROC)  2  $1,077.30 
II I  I  I  I  I  I 
44320  COLOSTOMY  OR  SKIN  LEVEL  CECOSTOMY;  (SEP PROC)  5  $1389.16  $2.89490  $423.01 
II I  I  1 I  I  I 
44345  REVISION  OF COLOSTOMY,  COMPLICATED  $567.70  I  $149.70  $131.60 
II I  I  1 I  I  I  I 
44600  SUTURE  OF  INTESTINE,  LARGE  OR  SMALL,  SINGLE  $585.60  1  $213.42 
II I  I  1 I  I  I  I 
44605  SUTURE  OF  INTESTINE;  WITH  COLOSTOMY  $291.00  $645.40 
44625  CLOSE  ENTROSTOMY  WITH  RESECTION  & ANASTOMOSIS  2  $641.70  $2,153.90  $1,140.70  $429.40 
44799  UNLISTED  PROCEDURE,  INTESTINE  2  $442.90  $3,147.15  $110.70  $450.85 
44900  I & D OF APPENDICEAL  ABCESS,  TRANSABDOMINAL  1  $734.20  $213.90 
44950  APPENDECTOMY  2  $671.80  $1,054.50  S895.70  $140.00 
44955  APPENDECTOMY;  WHEN  DONE  WITH  MAJOR  PROCEDURE  1  $554.50  $97.50  $110.90 
47000  BIOPSY  OF  LIVER,  PERCUTANEOUS  NEEDLE  3  $1,776.90  $198.50  $58.20 
47120  HEPATECTOMY,  RESECT  LIVER,  PARTIAL  LOBECTOMY  1  $1,361.90  $156.80 
47420  CHOLEDOCHOTOMY  WITH  EXPLORATION,  DRAINAGE  OR  2  $300.00  $2,040.00  $680.55 
REMOVAL  OF CALCULUS 
I  I 
(/  47480  1 CHOLECYSTOTOMY  WITH  EXPLORATION,  ETC.  (SEP PROC)  1  3  1  $1,771.35  I  $1,300.36  I  $9.00  I  $500.00 
47600  CHOLECYSTECTOMY  4  31J72.15  $2,836.80  $287.50  $2,003.30  $64.20 
47605  CHOLECYSTECTOMY;  WITH  CHOLANGIOGRAPHY  5  $1,4S6.00  $4,081.50  $998.35  SlJ24.12  $57.10 
47610  CHOLECYSTECTOMY,  EXPLORATION  OF COMMON  DUCT  2  $321.00  $1,687.30  $259.20  $400.00  $300.00 
47720  CHOLECYSTOENTEROSTOMY;  DIRECT  2  $623.60  $1,795.00  $2S5.50 
II  I  s306.I6 6  I  I 
47760  1 ANASTOMOSIS.  DIRECT.  EXTRAHEPATIC  DUCTS  & GI TRACT  I  1  I  S677.45  1  S1.067.00 
/I I
48540  INT  ANASTOMOSIS,  PANCREATIC  CYST  TO  GI TRACT;  1  SL245.00  $552.40  $510.70 
ROUX-EN-Y  I  I  I  I
II I  I  I  I 
49020  DRAINAGE  OF PERITONEAL  ABCESS,  TRANSABDOMINAL  5  $1,243.80  $1,703.45  $1,656.65  1  $133.06  I 
II I  I 
49200  / EXCISE,  DESTRUCT  INTRA-ABDOMINAL  TUMORS,  CYSTS,  ETC.  1  2  1  $810.00  $1,249.00  I  $103.20 
II I  I  1 I  %l,oooI .oo  I  I  I
49220  STAGING  LAP  FOR  HODGKINS  DISEASE  OR  LYMPHOMA  $543.20  1 
II I  I  I  I  I 
49505  REPAIR  INGUINAL  HERNIA  2  $778.85  1  $898.50  $110.86  I 
II I  I  I  I 
49560  REPAIR  INCISIONAL  HERNIA  (SEP PROC)  2  $321.00  $1,082.55  /  $66.34  I  $1,019.10 
II I  I  1 I  I  I  I 
49565  REPAIR  INCISIONAL  HERNIA,  RECURRENT  $319.40  I  $149.10  $319.40 
A-3 
 49999  UNLISTED  PROC,  ABDOMEN,  PERITONEUM  AND  OMENTUM  2  $855.70  $408.85  $177.36  $128.30 
50230  NEPHRECTOMY,  RADICAL,  REGIONAL  LYMPHADENECTOMY  1  $638.80  $1306.20 
50390  ASPIRATION  &/OR  INJECTION,  RENAL  CYST,  PERCUTANEOUS  1  $l,OOO.OO  $51.75  $200.00 
50800  URETEROENTEROSTOMY;  UNILATERAL  1  $294.10  $992.00  $58.80 
51550  CYSTECTOMY,  PARTIAL;  SIMPLE  1  $320.90  $929.90 
51840  ANTERIOR  VESICOURETHOPEXY  1  $853.00  $1,191.80  $400.00 
(MARSHALL-MARCHETTI-KRANTZ);  SIMPLE 
51841  ANTERIOR  VESICOURETHOPEXY;  COMPLICATED  (e.g.,  1  $320.90  $705.90 
SECONDARY  REPAIR) 
58150  TOTAL  ABDOMINAL  HYSTERECTOMY,  WITH/WITHOUT  9  $4,678.08  $10,213.40  $1,200.00 
SALPINGO-OOPHORECTOMY 
58210  RADICAL  HYSTERECTOMY  1  $2,231.60  $107.10 
58720  SALPINGO-OOPHORECTOMY,  UNI- OR  BILATERAL,  SEP PROC  4  $1,985.50  $3,839.04  $356.50 
58920  WEDGE  RESECTION  OR  BISECTION  OF  OVARY,  UNILATERAL  1  $337.50  $844.25 
OR  BILATERAL 
58925  OVARIAN  CYSTECTOMY,  UNILATERAL  OR  BILATERAL  2  $260.45  $1,008.50  $1347.85 
58940  OOPHORECTOMY,  PARTIAL  OR  TOTAL,  UNILATERAL  OR  3  $1,433.40  $1,559.50  $388.15  $778.00 
BILATERAL 
58950  RESECTION  OF OVARIAN  Ca WITH  2  $600.00  5LO16.35  $487.50  $1,417.35 
SALPINGO-OOPHORECTOMY  & OMENTECTOMY 
58951  RESECTION  OF OVARIAN  Ca WITH  TOTAL  ABDOMINAL  1  $582.00  $1365.00 
HYSTERECTOMY 
141  S39,637.44  $115,713.17  $5,957.29  $26,426.32  $5902.92  $11255.94 
A-4 
 49010  EXPLORATION,  RETROPERINEUM,  OBS  DENY  ALLOW  ALLOW  DENY  DENY 

II  I  I  I 
WITH  OR  WITHOUT  BIOPSY(S),  LAPAROTOMY,  PRINCIPAL  SECONDARY  SEPARATE  1 SECONDARY  11 

II  I  I  I 
SEPARATE  PROCEDURE  SURGEON  PROCEDURE  PROCEDURE  PROCEDURE  1 PROCEDURE  11 

1 $lCKMO
II 38I564  I  I  I  II

LIMITED  LYMPHADENECTOMY,  FOR  STAGING  (SEPARATE  $275.00  $411.50 
PROCEDURE)

II  3810I 0
 I  1 I  I  $800.00  I  I  II 
SPLENECI-OMY  (SEPARATE  PROCEDURE);  TOTAL  $200.00 
II  I  I  1 I  I  II 

43820  GASTROJEJUNOSTOMY  $1,500.00  $800.00  $437.50 
.. 

43832  GASTROSTOMY,  PERMANENT,  WITH  CONSTRUCTION  OF  1  $730.00  $859.80 

GASTRIC  TUBE 
49200 	 EXCISION  OR  DESTRUCTION  OF  INTRA-ABDOMINAL  1  $532.39  $974.40  S782.20 
TUMORS,  CYSTS,  ETC. 
49530  REPAIR  INGUINAL  HERNIA.  INCARCERATED  1  $300.00  S667.00 
II 58I150  I  I  I  II

TOTAL  ABDOMINAL  HYSTERECTOMY,  WITH/WITHOUT  1  $450.00  $895.80 

SALPINGO-OOPHORECTOMY  I 
II  I  1 I  I  II 

58200  1 TOTAL  HYSTERECTOMY,  INC.  PARTIAL  VAGINECTOMY  $250.00  1  $1,190.00  1  $75.00  / 
II  I  1 I  I  I 
22842  j  REMOVAL  OF SPINAL  INSTRUMENT  J1600.00  I  $3307.50  1  $1,828.20  11 

II  I  I  I 
9  $5,837.30  $9906.00  I  $437.50  $175.00  $2,610.40  11 

A-5 
 APPENDIX  B 
Overpayments  associated  with  code  19101, Biopy  of breast, inctinal  and  with  code 
85102,  Bone  mun-ow  needle  biopsy 
B-l  B-2 
 I 
/I  85102  1  BONE  MARROW  NEEDLE  BIOPSY  I  OBS  1  DENY  ALLOW  I  ALLOW  I  DENY 
BIOPSY,  PRINCIPLE  SECONDARY  BIOPSY, 
SURGEON  PROCEDURE  PROCEDURE  LABORATORY 
II  I  I  I  I 
20220  BONE  BIOPSY,  NEEDLE,  SUPERFICIAL  9  $357.00  I  $754.30  1  $336.13 
II  I  I  I  I 
20225  BONE  BIOPSY,  NEEDLE,  DEEP  5  $420.40  1  $110.55  1  $230.90 
II  I  I  1 I  I 
20245  BONE  BIOPSY,  EXCISIONAL,  DEEP  $84.60  1  $72.00  / 
II  I  1 I  I  I 
27447  TOTAL  KNEE  REPLACEMENT  I  $2,853.54  $82.90 
II  I  I  %I  I 
85095  BONE  MARROW  SMEAR,  ASPIRATION  ONLY  $7,014.05  I  $4,164.63  1  $81.00 
II  I I  I  I 
85100  BONE  MARROW  SMEAR,  ASPIRATION, STAINING  &  18 SlJO7.65  $1,937.10 
INTERPRETATION 
85101  BONE  MARROW  SMEAR,  ASPIRATION  & STAINING  1  $130.00  $90.00 
121  $8,693.30  $10,291.97  $110.55  $730.93 
B-3  APPENDIX  C 
Overpayments  associiated with  code 47100,  Biopy  of liver, wedge (separate procedure) 
and  with  cock  48100,  Biopsy  of pancreas  (separate procedure) 
C-l  Morning  Report:  2  Ye8  - No 
Title: 	 Implementation  of  State  Child  Support  Certified  Data 
Systems 
Reference:  OEI-04-96-00010  Contact:  Mary  Beth  Clarke 
(202)  619-2481 
We  released  a  final  report  on  implementation  of  State  child 

support  certified  data  systems.  States  appear  to  be  well 

positioned  to  get  their  systems  certified  by  the  October  1, 

1997  deadline.  At  the  time  of  our  review,  six  States  had 

certified  data  systems.  Forty-two  States  and  territories 

anticipate  having  their  systems  certified  by  the  deadline. 

Most  States  attributed  implementation  delays  largely  to  a 

requirement  to  share  technology,  short  time  frames,  and 

ineffective  State  and  contractor  working  relationships. 

Despite  the  favorable  outlook,  continuing  attention  will  be 

needed  to  ensure  success.  We  recommended  that  ACF  continuously 

monitor  the  status  of  each  State's  progress,  provide  technical 

assistance  to  States  having  difficulty  meeting  the  revised 

deadline,  and  continue  to  monitor  and  provide  technical 

assistance  to  States  as  they  prepare  to  develop  additional  data 

systems  required  by  the  Personal  Responsibility  and  Work 

Opportunity  Reconciliation  Act  of  1996.  The  ACF  agreed  with 

our  recommendations.