Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

MARCH 2001 

OEI-03-00-00090 

Medicare Payments for the Same Service 

by More Than One Carrier 
OFFICE OF INSPECTOR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, 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 Philadelphia Regional Office prepared this report under the direction of Robert A. Vito, 

Regional Inspector General, and Linda M. Ragone, Deputy Regional Inspector General. Principal 

OEI staff included: 

REGION HEADQUARTERS 

Robert Katz, Project Leader Tricia Davis, Program Specialist 

Erika Q. Lang, Program Analyst 

To obtain copies of this report, please call the Philadelphia Regional Office at (800) 531-9562. 

Reports are also available on the World Wide Web at our home page address: 

http://www.dhhs.gov/progorg/oei 
EXECUTIVE SUMMARY 

PURPOSE 

To determine if multiple carriers paid for duplicate Part B services rendered by the same 

provider. 

BACKGROUND 

The Health Care Financing Administration (HCFA) contracts with private health insurance 

companies called carriers to process Part B claims for reimbursement. After furnishing a 

physician service, providers submit a claim for reimbursement to the carrier with 

jurisdiction over this service. Under the Common Working File system, the carrier then 

sends the claims information to one of nine host sites for approval. At the host site, the 

claim is screened for consistency, entitlement, and duplication of previously processed 

claims. 

Potentially duplicate claims are ones which contain identical elements for a service. Both 

the carriers and the Common Working File host sites are required to review incoming 

claims for possible duplication using certain criteria, and to deny ones that are potentially 

duplicate. 

For this inspection, we selected a sample of potential duplicate services from HCFA’s 5 

percent National Claims History file for 1998. We contacted carriers who had paid for the 

services in our sample, and asked them to identify the providers who had billed for these 

services. We then asked providers to furnish us with medical documentation to support 

the sample services. Sample services represented 15 different procedure codes. We also 

examined data from HCFA’s 100 percent claims file for the providers who rendered 

services in our sample. 

FINDINGS 

Medicare’s claims processing system did not prevent any of the duplicate 

payments in our sample 

None of the medical records received from providers in our sample justified billings to 

multiple carriers. Although carriers and Common Working File host sites have checks 

designed to detect duplicate billings, these measures are clearly vulnerable to duplicate 

claims that are sent to different carriers. 

Medicare Payments for the Same Service i OEI-03-00-00090 
Some sample providers had a significant number of potential duplicate billings 

In reviewing 100 percent of the providers’ billings for the 15 procedure codes reviewed, 

we found that nearly one-fourth of the providers in our sample (20 of 86) had at least 20 

services involving potential duplicate billings. Seven providers had more than 100 services 

involving potential duplicate billings in 1998. Further, the duplicate billings were not 

limited to the 15 codes. We found other duplicate billings representing additional services, 

including evaluation and management services, group psychotherapy, and magnetic 

resonance imaging. 

RECOMMENDATIONS 

We believe our findings highlight a significant vulnerability in Medicare’s claims processing 

system. The inability to detect duplicate payments by multiple carriers could lead to substantial 

future losses for Medicare. 

To address the vulnerabilities identified in this report, we recommend that HCFA: 

Revise Common Working File edits to detect and deny duplicate billings to more 

than one carrier. If this measure is determined not to be cost effective, then 

increased post-payment reviews should be conducted, particularly in areas where 

providers commonly perform services in multiple carrier jurisdictions. 

Promote provider compliance and cooperation with the Office of Inspector 

General’s Compliance Program Guidance for Individual and Small Group Physician 

Practices. Providers in solo or small group physician offices should be encouraged to 

conduct effective voluntary compliance activities to maintain optimum levels of integrity in 

their practices. 

Encourage providers to clarify carrier jurisdiction questions, in addition to other 

billing questions, by using toll-free telephone lines recently established by carriers. 

We have forwarded claims information to HCFA so they may take appropriate action regarding 

the duplicate payments cited in this report. In addition, we have referred some of the providers 

that we identified as having high numbers of duplicate billings to our Office of Investigations. 

AGENCY COMMENTS 

The HCFA concurred with our recommendations. The HCFA stated that they will 

reexamine existing criteria regarding duplicate editing in the Common Working File 

system to determine the cost effectiveness of including the carrier number in the match 

Medicare Payments for the Same Service ii OEI-03-00-00090 
criteria. If a revision is determined not to be cost effective, improved duplicate billing 

edits will be considered within the Common Working File redesign initiative. The HCFA 

also plans to prepare a model article for inclusion in all Medicare contractor carrier 

bulletins, reminding providers to conduct effective voluntary compliance activities to 

ensure high levels of integrity in their practices. To encourage providers to clarify carrier 

jurisdiction questions via the carrier toll-free telephone lines, HCFA will instruct carriers 

to alert personnel servicing the toll-free lines to be sensitive to this issue and to provide 

appropriate information to providers. 

Medicare Payments for the Same Service iii OEI-03-00-00090 
iv

TABLE OF CONTENTS 

PAGE

EXECUTIVE SUMMARY .................................................... i

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

FINDINGS ................................................................ 6

Claims processing system did not prevent duplicate payments ..................... 6

Some providers had significant numbers of potential duplicate billings .............. 7

RECOMMENDATIONS ................................................ 9

APPENDICES

A: Procedure Codes Included in Sample .................................... 10

B: Estimate and Confidence Interval ....................................... 11

C: Agency Comments ................................................. 12

Medicare Payments for the Same Service iv OEI-03-00-00090 
INTRODUCTION 

PURPOSE 

To determine if multiple carriers paid for duplicate Part B services rendered by the same 

provider. 1 

BACKGROUND 

The Health Care Financing Administration (HCFA), which administers the Medicare 

program, contracts with private health insurance companies called carriers to process 

Part B claims for payment. Claims under Medicare Part B include medical and surgical 

services by physicians, ambulance services, durable medical equipment, outpatient 

hospital services, and laboratory services. 

Carrier Jurisdiction 

After physician services are furnished to a Medicare beneficiary, the provider submits a 

claim for reimbursement to the carrier with jurisdiction over the service. In accordance 

with the Omnibus Reconciliation Act of 1989, as amended by the Omnibus Reconciliation 

Act of 1990, carrier jurisdiction for physician services was revised to reflect the locality 

where the service was furnished. Previously, carrier jurisdiction was based on the 

location of the physician’s office. The rule governing carrier jurisdiction has been in 

effect since January 1, 1992; however, carriers were allowed to delay its implementation 

until July 1, 1998. 

Processing Part B Claims 

A carrier receives claims via electronic submission or mail. The carrier enters the claim 

into its processing system, calculates the payment amount, and conducts consistency and 

utilization checks using computerized edits. The carrier then sends the claim to one of 

nine host sites of the Common Working File (CWF) system. The HCFA established the 

Common Working File system in 1991 to improve the accuracy of claims processing. 

The host sites maintain beneficiary claims history and entitlement information. Each 

beneficiary is assigned to only one host site. At the host site, the claim is screened for 

consistency, entitlement, and duplication of previously processed claims. This screening 

process is Medicare’s front line of defense against paying inappropriate claims. Within 

1 The term “provider,” as used in this report, refers to any practitioner who provides a Part B service to a 

Medicare beneficiary. 

Medicare Payments for the Same Service 1 OEI-03-00-00090 
24 hours of receiving a claim, the host site makes one of three payment determinations: 

(1) pay the claim, (2) reject the claim, or (3) hold the claim to obtain missing information. 

Detecting Duplicate Payments 

As part of Medicare’s guidelines to detect and prevent inappropriate payments, both the 

Common Working File system and the carriers are required to conduct checks on claims 

to detect duplicate payments. The Common Working File host sites check for exact 

duplicate claims by comparing the carrier number, the claim’s document control number, 

and service dates on the File’s history record. If these fields are identical on two claims, 

one claim is denied. According to procedures described in the Medicare Carriers Manual 

regarding the control of potentially duplicate payments, as well as information obtained 

from HCFA, carriers are required to deny claims that match on certain fields 

(beneficiary’s health insurance claim number, identical service dates, provider number, 

type of service, procedure code, place of service, and submitted charge). As a further 

check for duplicate services, service dates are matched with one or more of the following 

variables: provider number, type of service, and procedure code. If these items match, 

the claim is held for review and duplicate payments are denied. Line items within claims 

are also compared for duplicate entries. 

METHODOLOGY 

To determine if multiple carriers appropriately paid for what appeared to be duplicate 

services, we obtained and reviewed medical documentation from a sample of providers to 

see if it justified the services. 

Sampling 

We examined 1998 Part B paid services for a 5 percent sample of Medicare beneficiaries 

in the National Claims History file. This 5 percent file, which contained adjustments 

through June 1999, was 98 percent complete. We used six criteria to determine if two 

services appeared to be duplicate: the beneficiary’s health insurance claim number; the 

Unique Physician Identification Number of the provider performing the service; the start 

date of service; HCFA’s Common Procedure Coding System code describing the service; 

and the two modifiers that can further describe the service. If the six criteria for two 

services were identical, we considered those services to be potential duplicates. From 

this pool of potentially duplicate services, we selected those that had been billed to more 

than one carrier. As a result of this effort, we identified a universe of 5,876 services. 

Medicare Payments for the Same Service 2 OEI-03-00-00090 
From the 5,876 services, we identified 40 procedure codes with the highest allowed 

payment amounts in 1998. With the assistance of a carrier’s medical staff, we arrayed the 

codes into three categories: (1) services that should only be billed once per day by a 

single provider, (2) services that should rarely be billed more than once per day, and (3) 

services which could commonly be billed more than once per day. We narrowed our 

sample of procedure codes to include 15 from the first two categories. In our selection, 

we attempted to include a wide variety of service codes representing diverse provider 

specialties in various places of service. We then selected a random sample of services 

from each of the 15 codes. 

We divided the 15 codes into three tiers based on number of potential duplicate services. 

The first tier had 14 or fewer duplicate services. The second tier had 16-34, and the third 

tier had more than 34 services. For more information, see Appendix A. From each 

procedure code in the first tier, we chose a maximum of eight services. From each code 

in the second and third tiers, we selected a maximum of 14 and 30 services respectively. 

At this stage of sample selection, we had a total of 250 services conducted by 89 

providers. We subsequently eliminated services from three providers who were either 

under investigation by the Inspector General’s Office of Investigations (six services), or 

whose Unique Physician Identification Number was not accurately reflected on the 

National Claims History file (two services). Our resulting sample included 242 total 

services by 86 different providers. Pending receipt of documentation from providers, we 

presumed these 242 services actually represented 121 legitimate services which had been 

appropriately billed to the correct carrier, and 121 duplicate services which somehow had 

been billed to, and paid by, an additional carrier. 

Data Collection 

Carrier requests. We contacted each carrier that had paid for a service in our sample. 

We requested that carriers identify the names and addresses, including both the location 

and billing address, of the providers who submitted claims for our sample services. As 

each duplicate service in our sample was billed to multiple carriers, we typically requested 

each provider’s name and address information from two carriers. In response, we often 

received two different addresses for each provider. In addition, we asked carriers to 

confirm the Unique Physician Identification Number of the providers identified in the 

National Claims History file as having rendered the services. We also asked the carriers 

for copies of the claims that contained our sample services. 

Provider requests. We contacted providers using two methods: by mail or through an 

on-site visit. 

Our primary method of contacting providers was via letters, asking them to furnish us 

with medical documentation to support the services in our sample. We sent a form with 

each letter which detailed key elements of each service, including the name of the carrier 

that was billed. 

Medicare Payments for the Same Service 3 OEI-03-00-00090 
As mentioned above, we often had two addresses for each provider, one from each 

carrier. If the two carriers gave us the same address, we sent two forms, each 

representing one service, to that address. If the two carriers provided us with different 

addresses, we sent a separate form to each address. Primarily, we mailed the letters to 

the location addresses provided by the carriers. In the absence of a location address, we 

used billing addresses. We sent 121 letters to 82 providers, and visited 4 providers to 

obtain the medical documentation in person. 

If a provider returned two forms along with medical documentation, we considered the 

response complete. However, if the provider returned only one form for one carrier 

along with documentation, we contacted the provider to determine if a different set of 

records was available for the service billed to the other carrier. We telephoned providers 

if they failed to respond by the due dates contained in the letters. 

Several providers did not submit documentation even after repeated follow-up telephone 

calls. In these instances, we sent the provider a letter stating we would conclude the 

provider did not have the documentation if we didn’t receive it by a certain date. We did 

not hear back from five providers. Therefore, we counted them as not having 

documentation. 

When making follow-up contacts for medical documentation, we were careful to point 

out that two carriers had paid for the billed services, and that the provider should send us 

documentation to support each service billed. We also asked providers or their office 

personnel to explain why duplicate billings had been submitted to more than one carrier. 

Of the 86 providers in our sample, 79 sent medical documentation, representing 222 

services. Five providers, representing 12 services, did not send any medical 

documentation. Two providers, representing 8 services, could not be located. 

Consequently, there were 234 services for which we received or attempted to obtain 

documentation. 

Additional data provided by HCFA. As stated above, our sample of 242 total services 

involving 86 providers was pulled from a 5 percent sample of Medicare beneficiaries in 

the National Claims History file. In order to learn more about their billing practices, we 

asked HCFA to provide us with data for our sample providers from the 100 percent 

claims file. This file contains claims information for all Medicare beneficiaries. 

Furthermore, this file was more current than the 5 percent claims file, as it included any 

adjustments in services made through June 2000. 

Data Analysis 

Medical documentation from providers. We reviewed medical documentation from 

providers to determine if the services should have been billed to two carriers. We did not 

review the documentation to determine medical necessity. We determined that the 

Medicare Payments for the Same Service 4 OEI-03-00-00090 
potential duplicate billing would be justified if there were medical documentation to 

support each service billed. For example, in the case of an inpatient hospital visit, the 

medical documentation sent to us should have verified, at a minimum, medical care by the 

same provider for the same patient on the same day in two hospitals located in different 

carrier jurisdictions. If documentation supported one service only, we determined that 

one of the claims was a duplicate, and should not have been paid. 

We computed overpayment amounts for the services in our sample. If documentation 

was submitted to support only one billing, we attributed the correct payment to the 

carrier where the service was rendered. If we were unable to ascertain which carrier had 

jurisdiction for the service performed based on the medical records sent to us, we 

attributed the correct payment to the carrier with the higher allowed amount (thereby, 

resulting in a lower and more conservative improper payment amount). If the allowed 

amounts were the same, we attributed payment to the carrier listed first in our database. 

Provider billing histories. We examined the 100 percent National Claims History file 

for Part B paid services for all beneficiaries seen by the providers in our sample. We 

identified all Part B services billed by our sample providers in 1998. Using six criteria 

(described on page 2), we identified the total number of potential duplicate services billed 

by sample providers. We analyzed duplicate billings for the 15 procedure codes in our 

sample, as well as all other procedure codes. We also calculated the allowed amounts for 

these services. 

As the 100 percent National Claims History file contained more current data than the 5 

percent file, we analyzed it to determine if any adjustments to our sample services had 

been made. We found that 16 services in our sample were eliminated from the more 

current data in the 100 percent claims file. The dropped services may signify that the 

carrier, provider, or other party discovered the duplicate billing and the provider refunded 

the overpayment to Medicare. These services, representing seven providers, were 

retained in our sample since we obtained the 100 percent claims file after collecting 

medical documentation from providers. 

__________ 

This study was conducted in accordance with the Quality Standards for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

Medicare Payments for the Same Service 5 OEI-03-00-00090 
FINDINGS 

Medicare’s claims processing system did not prevent any of 

the duplicate payments in our sample 

None of the medical records received from providers in our sample justified billings to 

multiple carriers. For 222 services, provider documentation did not support the need for 

billing two separate carriers. Therefore, half of these services (111) were improperly 

submitted to and paid by a Medicare carrier. There were an additional 12 services for 

which no documentation was provided. Medicare allowances for the 123 improper 

services totaled almost $12,000. We estimate total improper allowances for the 15 codes 

as approximately $446,000. See Appendix B for estimate and confidence interval. 

Although carriers and Common Working File host sites have checks designed to detect 

duplicate billings, these measures are clearly vulnerable to duplicate claims sent to 

different carriers. Carrier edits are designed to detect duplicates within a carrier, rather 

than across carriers. Carriers, therefore, cannot compare their incoming claims with 

those received by neighboring carriers. The only time that duplicate claims submitted to 

multiple carriers could be identified is when the data is sent to the host sites for 

processing. For the services in our sample, however, it appears that the Common 

Working File system did not identify duplicate services billed to more than one carrier. 

Few providers reported making refunds to Medicare 

Only eight providers stated that they had refunded overpayments to the appropriate 

carrier. Seven of these providers initiated the refunds as a result of our inquiries. These 

refunds totaled approximately $1,100 and included not only the services in our sample, 

but other duplicate payments which the provider discovered following our inquiries. An 

additional four providers, who acknowledged their errors, asked for instructions on how 

they should refund their excessive payments to the appropriate carrier. 

Providers gave various reasons to explain duplicate billings 

Fifteen providers told us that, prior to our requests, they were totally ignorant of the 

existence of the duplicate billings and had no idea how they had occurred. Another seven 

providers cited the policy change, which based carrier jurisdiction on where the service 

was performed rather than the location of the provider’s office, as the reason for their 

duplicate billings. Although this policy was effective in 1992, carriers were allowed to 

delay implementation until July 1998. One New York City provider explained in a letter, 

“I learned from a billing seminar . . . that claims for patient services received in Queens . . 

. are processed by GHI [Group Health Incorporated]. After 

Medicare Payments for the Same Service 6 OEI-03-00-00090 
learning this, I reapplied for reimbursement to GHI . . . and assumed that I would not be 

paid by Empire. However . . . both Empire and GHI sent reimbursements to my 

office.” Other explanations cited by providers included confusion caused by carrier 

transitions, having offices or performing services across State lines, and inadvertent 

errors by billing services. 

Some sample providers had a significant number of 

potential duplicate billings 

In reviewing 100 percent of the providers’ billings for the 15 procedure codes, we found 

that nearly one-fourth of the sample providers (20 of 86) had at least 20 services 

involving potential duplicate billings to multiple carriers. One of the 20 providers had 

966 potential duplicate services, with questionable allowances totaling about $31,000. 

Another six of the 20 providers had at least 100 services involving potential duplicate 

billings. The 86 sample providers had a total of 2,871 services representing 

approximately $101,000 in improper allowances due to questionable billings to multiple 

carriers. 

For some sample providers, potential duplicate services comprised a high percentage of 

overall services for the 15 codes reviewed. As shown in Table 1, potential duplicate 

services represented one-fifth or more of the total services paid by Medicare to several 

providers. Specifically, there were 5 providers whose potential duplicate services 

represented 20 percent or more of their overall billings. For 8 of the 86 providers, at 

least 10 percent of their total 1998 Medicare billings involved potential duplicate 

services. In contrast, for more than two-thirds of the 86 providers, potential duplicate 

billings represented less than 1 percent of their total Medicare claims. 

Table 1. Percentage of Services Involving Potential Duplicates for 15 Sample Codes 

Provider involving duplication 

Number of services 

services overall 

Total number of 

involving duplication 

Percentage of services 

A 334 828 40% 

B 966 2748 35% 

C 114 332 34% 

D 38 124 31% 

E 115 565 20% 

A detailed review of all procedure codes showed that duplicate billings to multiple 

carriers were not limited to the 15 codes in our sample. For the 86 providers, an 

additional 1,667 services involved potential duplicate billings, representing nearly 

$86,000 in improper allowances. Fourteen of the top 25 codes that appeared most 

frequently were evaluation and management codes used for physician services. Many of 

these codes can be billed only once per day, and, therefore, any duplication would seem 

questionable. Other procedure codes involved in the duplicate billings were group 

Medicare Payments for the Same Service 7 OEI-03-00-00090 
psychotherapy (90853), subsequent nursing facility care per day (99312), end stage renal 

disease related services per day (90925), and spinal canal magnetic resonance imaging 

(72148). The definitions for these codes suggest that a provider would rarely furnish a 

beneficiary with two of these services on the same day, especially in two different carrier 

jurisdictions. 

Medicare Payments for the Same Service 8 OEI-03-00-00090 
RECOMMENDATIONS 

We believe our findings highlight a significant vulnerability in Medicare’s claims processing 

system. The inability to detect duplicate payments by multiple carriers could lead to substantial 

future losses for Medicare. 

To address the vulnerabilities identified in this report, we recommend that 

HCFA: 

Revise Common Working File edits to detect and deny duplicate billings to more 

than one carrier. If this measure is determined not to be cost effective, then 

increased post-payment reviews should be conducted, particularly in areas where 

providers commonly perform services in multiple carrier jurisdictions. 

Promote provider compliance and cooperation with the Office of Inspector 

General’s Compliance Program Guidance for Individual and Small Group Physician 

Practices. Providers in solo or small group physician offices should be encouraged to 

conduct effective voluntary compliance activities to maintain optimum levels of integrity 

in their practices. 

Encourage providers to clarify carrier jurisdiction questions, in addition to other 

billing questions, by using toll-free telephone lines recently established by carriers. 

We have forwarded claims information to HCFA so they may take appropriate action regarding 

the duplicate payments cited in this report. In addition, we have referred some of the providers 

that we identified as having high numbers of duplicate billings to our Office of Investigations. 

AGENCY COMMENTS 

The HCFA concurred with our recommendations. The HCFA stated that they will 

reexamine existing criteria regarding duplicate editing in the Common Working File 

system to determine the cost effectiveness of including the carrier number in the match 

criteria. If a revision is determined not to be cost effective, improved duplicate billing 

edits will be considered within the Common Working File redesign initiative. The HCFA 

also plans to prepare a model article for inclusion in all Medicare contractor carrier 

bulletins, reminding providers to conduct effective voluntary compliance activities to 

ensure high levels of integrity in their practices. To encourage providers to clarify carrier 

jurisdiction questions via the carrier toll-free telephone lines, HCFA will instruct carriers 

to alert personnel servicing the toll-free lines to be sensitive to this issue and to provide 

appropriate information to providers. 

Medicare Payments for the Same Service 9 OEI-03-00-00090 
 APPENDIX A 

Procedure Codes Included in Sample

Procedure Code Services in Universe 

Number of Potential Duplicate 

Selected for Sample 

Number of Services 

Tier 1 

70553 2 2 

72158 4 4 

90921 8 8 

66984 12 8 

90801 14 8 

Tier 2 

99223 16 14 

99204 20 14 

99254 20 14 

99244 24 14 

11721 34 14 

Tier 3 

90862 42 30 

99238* 42 24 

90816 82 30 

99232* 110 28 

99213 226 30 

TOTAL 656 242 

*Six services from procedure code 99238 were dropped from the sample, as the provider was under investigation 

by the Inspector General’s Office of Investigations. Two services were dropped from procedure code 99232, as 

the provider’s Unique Physician Identification Number was not accurately reflected on the National Claims 

History file. 

Medicare Payments for the Same Service 10 OEI-03-00-00090 
APPENDIX B 

Estimate and Confidence Interval

We used the Survey Data Analysis (SUDAAN) software package to compute allowance and 

confidence interval estimates presented in the following table. The estimate is weighted based on 

the sample design and is reported at the 95 percent confidence level. 

Weighted Total Estimate 95% Confidence Interval 

Questionable Medicare Allowances 

for 15 Sample Codes 

$446,015 $367,775 - $524,255 

Medicare Payments for the Same Service 11 OEI-03-00-00090 
APPENDIX C 

Health Care Financing Administration Comments

Medicare Payments for the Same Service 12 OEI-03-00-00090 
APPENDIX C 

Medicare Payments for the Same Service 13 OEI-03-00-00090 
APPENDIX C 

Medicare Payments for the Same Service 14 OEI-03-00-00090