Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

MEDICARE TESTS OF LOWER 

EXTREMITY ARTERIES 

MAY 1993 
OFFICE OF INSPE~OR 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 OIG’S 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 

assessments of 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 OIG’S 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 OIG’S 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 in the Philadelphia Regional Office, under the direction of Joy Quill, 

Regional Inspector General and Robert A. Vito, Deputy Regional Inspector General. 

Participating in this project were: * 

. 

Robert Katz, Project Leader Penny Thompson, Headquarters 

Eileen Silk, Lead Analyst Wayne Powell, Headquarters 

Cynthia Hansford, Administrative Staff W. Mark Krushat, SC.D., Headquarters 

Linda Moscoe, Headquarters 

To obtain a copy of this repo~ call the PhiladelphiaRegional Office at (215) 596-0607. 
Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

MEDICARE TESTS OF LOWER 

EXTREMITY ARTERIES 

MAY 1993 0EI-03-91-O0950 
EXECUTIVE SUMMARY 

PURPOSE 

To review Medicare 

extremity arteries. 

BACKGROUND 

carriers’ utilization review practices for noninvasive tests of lower 

Peripheral vascular disease (PVD) is the general term applied to a group of distinct 

diseases and syndromes involving the arteries, veins, connective tissues, and vessels of 

the extremities. Although vascular diseases may occur in any body part containing 

blood vessels, many victims of PVD experience symptoms in their legs, such as pain, 

cramps, numbness, coldness, and weakness. Physicians use a wide array of noninvasive 

techniques to diagnose the presence, location, and extent of conditions, such as 

atherosclerosis (narrowing of the arteries), which interfere with the flow of blood to or 

from the extremities. 

Diagnostic arterial tests of the lower limbs have increased dramatically in recent years. 

Medicare Part B allowed amounts virtually doubled for these tests in all settings and 

specialties from 1987 to 1990. In 1991, total allowed dollars exceeded $71 million. In 

terms of total Part B billings, the leading specialties include general surgeons, thoracic 

surgeons, and internal medicine specialists. These 3 groups accounted for more than 

410,000 services totaling some $34 million in allowances. 

The Health Care Financing Administration (HCFA) recognizes limb arterial studies 

(as well as other related noninvasive vascular tests) as “services where abuses have 

been identified, and medical review should be undertaken.” Such services are included 

as an alert to carriers in the Medicare Carriers Manual. The alert enables carriers to 

facilitate the identification of aberrant practice patterns. 

In order to determine how Medicare reviews claims for these tests, we contacted 36 

carriers representing 58 geographical jurisdictions to obtain their coverage guidelines 

and pertinent policies. Responses were received from 34 carriers serving 56 

jurisdictions. We analyzed the criteria and methods carriers use to evaluate and 

control utilization. We obtained statistical information from HCFA. 

This is one in a series of Office of Inspector General reports on carriers’ utilization 

review efforts in areas that appear on HCFAS Postpayment Alert List (PAL) of 

abusive services. 

i 
FINDINGS 

b Over half the carriers have special utilization policies. 

Over half of the carriers responding to our inquiries had some type of 

utilization review safeguard in place. These safeguards consisted of prepayment 

thresholds or special policies related to coverage, documentation, and/or 

equipment requirements. 

b Coverage policies could produce savings to the Medicare program. 

Medicare could realize savings nationally by adopting policies such as 

prepayment threshold policies. Based on the experience of four carriers which 

have threshold limits of two tests a year per physician per beneficiary, Medicare 

would save about $5.7 million annually. 

RECOMMENDATION 

We believe the monetary benefits of tighter uti ization policies, such as prepayment 

thresholds, are evident. ‘The HCFA has convened a workgroup to review coverage 

policies for these tests. They plan to issue new coverage guidelines. We recommend 

that HCFA continue to work with carriers to ensure that there are sufficient 

safeguards to prevent the unnecessary utilization of lower extremity tests. These 

safeguards may include the policies that are currently utilized by some carriers. 

COMMENTS AND OIG RESPONSE 

The HCFA concurred with our recommendation. In HCFAS view, a variety of 

approaches might be appropriate to curtail unnecessary utilization in addition to 

prepayment thresholds. We agree that various approaches could result in savings. 

Our recommendation contains sufficient flexibility to embrace workable monitoring 

techniques at any phase of utilization review. We hope the examples of carrier 

practices which we have described in this report will be helpful to the Noninvasive 

Vascular Testing Work Group, which has been convened by HCFA to address such 

issues. 

We have refined our savings estimate based on more recent data, and made minor 

changes in the report based on HCFA’S technical comments. The full text of HCFA 

comments are contained in Appendix B. 

The Assistant Secretary for Planning and Evaluation reviewed the report and 

expressed concurrence. 

ii 
TABLE OF CONTENTS


EXECUTIVE SUMMARY


Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..1


FINDINGS


Carrier Utilization Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


Coverage Policies Could Produce Savings . . . . . . . . . . . . . . . . . . . . . . . . . . ...6


RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..7


COMMENTS AND OIGRESPONSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8


APPENDICES


Carriers’ Other Special Utilization Policies . . . . . . . . . . . . . . . . . . . . . . . . . . A-1


Comments Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-1


Potential Savings Calculations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..C-1

INTRODUCTION 

PURPOSE 

To review Medicare 

extremity arteries. 

BACKGROUND 

carriers’ utilization review practices for noninvasive tests of lower 

Physicians use a wide array of noninvasive techniques to diagnose the presence, 

location, and extent of conditions, such as atherosclerosis (narrowing of the arteries), 

which interfere with the flow of blood to or from the extremities. These techniques 

include Doppler and plethysmography tests. 

� Doppler tests: Using ultrasound principles, Doppler devices emit high 

frequency soundwaves which detect the flow of blood or pinpoint an arterial 

irregularity, such as an obstruction. 

� Plethysmography: Literally meaning “to record an increase,” this technique 

detects vascular obstructions by temporarily blocking blood flow circulation and 

recording and measuring any changes which result. 

Medicare Coverage and Guidance 

The HCFA recognizes limb arterial studies (as well as other related noninvasive 

vascular tests) as “services where abuses have been identified, and medical review 

should be undertaken.” Such services are included as an alert to carriers in a special 

Postpayment Alert List (PAL) in Section 7514 of the Medicare Carriers Manual. 

Carriers use the PAL to facilitate identification of aberrant practice patterns. 

Practitioner services included in the PAL are not limited by physician specialty. 

Based on a special review by a medical directors’ workgroup, HCFA issued these 

instructions in 1989: 

“The rapid proliferation of noninvasive vascular testing modalities 

presents a challenge to third party payers in determining appropriate 

reimbursement policies. While the patient clearly benefits from escaping 

the risks inherent in angio/venography (an invasive test), the very safety 

of the noninvasive tests may encourage overutilization. Carrier medical 

review policies must therefore be clear and well developed regarding 

these tests.” 

1 
Carriers can utilize a number of medical review policies, including prepayment 

thresholds. Prepayment thresholds (or screens) identifj claims that merit additional 

review prior to payment. Carriers frequently review the billing histories for providers 

and beneficiaries identified through these screens. Sometimes carriers request 

additional medical information before these claims are approved for payment. 

Medicare Reirnbmement 

Diagnostic arterial tests of the lower extremities (also referred to as arterial or 

vascular tests of the lower limbs) have increased dramatically in recent years. 

Allowed amounts virtually doubled for all settings and specialties from 1987 to 1990, 

according to Part B Medicare Annual Data (BMAD) statistics. In 1991, total dollars 

dropped to $71,231,617 even though total allowed services climbed to 801,415, 

according to the Part B Extract Summary System (BESS) file compiled through 

June 1992. 

Section 4108 of the Omnibus Budget Reconciliation Act of 1990, which mandated 

reductions in reasonable charges in the technical components of certain high-volume 

diagnostic tests, including arterial tests of the lower limbs, may have caused the decline 

in total dollars allowed in 1991. 

According to BESS statistics for 1991, a wide variety of specialties conduct diagnostic 

arterial tests of the lower limbs. Three of the highest specialties (in terms of total 

dollars allowed) are general surgeons ($16 million), thoracic surgeons ($9 million), and 

internal medicine specialists ($9 million). These groups accounted for more than 

410,000 services totaling some $34 million in allowances. 

METHODOLOGY 

We contacted 36 Medicare carriers representing 58 geographical jurisdictions to obtain 

coverage guidelines and pertinent policies. Responses were received from 34 carriers 

2

representing 56 jurisdictions. Because the policies of an individual carrier may vary 

from jurisdiction tojurisdiction, inthisreport werefer toeach jurisdictional a carrier. 

Analysis focused on criteria and methods carriers use to evaluate and control 

utilization. We obtained statistical information from HCFA’S BMAD and BESS files, 

and obtained technical and clinical information from standard medical references and 

the Medicare Carriers Issues Manual (MCIM). 

We used the 1991 Part B sample fi]el to calculate national savings which would be 

realized if all specialties had a threshold of two tests per year, with additional tests 

requiring medical justification. To estimate the savings resulting if all carriers adopted 

a screening threshold of two tests a year (per physician, per beneficiary), we compared 

utilization rates in the four carriers with this threshold to utilization rates in the other 

carriers. 

This inspection was conducted in accordance with the Quality Standards for 

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

1 The Part B sample is a one percent random sample selection of Medicare 

beneficiaries from HCFAS Common Working File. It is maintained by the Office of 

Inspector General. 

3 
FINDINGS 

Over half the carriers have special utilization policies. 

Many carriers responded to HCFAS warnings about the abusive nature of arterial 

limb tests by instituting special policies to control the incidence of inappropriate 

testing. More than half of the responding carriers (32 of 56) had some type of 

utilization review safeguard in place. These safeguards consisted of prepayment 

thresholds or special policies related to coverage, documentation, and/or 

requirements. 

The 32 carriers accounted for approximately $29.5 million in allowances 

about 46 percent of the total allowances for the responding 56 carriers. 

equipment 

in 1991 or 

Carrier monitoring efforts vary widely. Such efforts include focused techniques as well 

as intensive, periodic reviews of arterial limb tests. Some carriers are heavily involved 

in prepayment monitoring while others depend solely on postpayment reviews. One 

carrier reported that its utilization review section evaluates every vascular test billed by 

podiatrists because of medical necessity concerns. Another carrier characterized these 

claims as, “Very hard to monitor except manually.” Conversely, another carrier said 

they never do any prepayment monitoring. 

The HCFA demonstrated its continued concern when it convened a technical advisory 

group in June 1992 to reevaluate coverage policies for these tests. They expect to 

issue new coverage guidelines in the future. 

I?repayment lheshoki’s 

Thirteen carriers utilize prepayment thresholds as a primary means of controlling 

unnecessary or inappropriate testing. Because of carrier confidentiality concerns, we 

will not identify the carriers. A chart depicting the threshold policy for each of the 13 

carriers appears on the next page. 

4 
A Physicians II Podiatrists 

B All 

c All 

QJ “


E All 

F Podiatrists II 

G II All 

H All 

II 

J Podiatrists 

II 

K Podiatrists 

I Podiatrists 

II 

L Podiatrists 

II 

M All 

II 2 @ 365 Days 

1 @ 180 Days 

1 @ 6 Months 

1 @ Year Each Leg; 

2 @ Year if Vascular 

Surgery 

1 @ Year Each Leg; 

2 @ year if Vascular 

Surgery 

Preoperative/NonSurgery: 1 @ 12 

Months 

Postoperative: 1 compl 

II 

II 

II 

II 

II 

II 

Test 1st 12 months; 

Limited Tests @ 3 

Months Thereafter 

Vascular Tests Not 

Covered 

1 @ 12 months 

1 @ 12 Months 

Vascular Tests Not 

Covered 

Vascular Tests Not 

Covered 

Vascular Tests 

Not Covered 

1 Preoperative 

Test a Year 

1 @ 365 Days; 

Postoperative: 

3 First Year, 1 a Year 

Thereafter 

5

Other special policies 

Nineteen carriers have instituted special policy guidelines stressing coverage, 

documentation, and/or equipment requirements. Several carriers delineate which 

symptoms or diagnoses would justify reimbursement for these tests. For example, one 

carrier stipulates which symptoms justi& coverage, such as “intermittent claudication” 

or “ulcer of lower limbs.” Other carriers stipulate what constitutes acceptable 

documentation; for example, one carrier requires physicians to use equipment which 

produces “hard-copy output.” (See Appendix A for a list of the 19 jurisdictions and 

summaries of their special policies.) 

Coverage policies could produce savings. 

Medicare could realize savings nationally if carriers used prepayment thresholds as the 

basis for their prepayment review safeguards before applying other coverage criteria. 

Four carriers have implemented prepayment thresholds of two tests a year per 

physician per beneficiary. Based on the experience of the 4 jurisdictions in 1991, we 

estimated 64,915 tests would not have been performed if this limit had been in place 

nationally. Based on the average cost of about $892 per test, about $5.7 million 

would have been saved annually. Potential savings over the next 5 years exceeds $28 

million. (See Appendix C for further details of our calculations.) 

The unnecessary utilization of lower extremity tests results in unwarranted Medicare 

expenditures. According to BMAD statistics for 1990, more than 200,000 beneficiaries 

received multiple lower extremity tests. Some beneficiaries received as many as 14 

tests from the same physician. To use one of these beneficiaries as an example, a 

prepayment threshold of two tests a year per physician could have effected potential 

savings of $1272 in allowances just for this one beneficiary if additional tests were 

deemed unnecessa~ (12x average 1990 allowance of $106). 

Four carriers do not cover vascular tests performed by podiatrists. If all vascular tests 

performed by podiatrists were not covered, Medicare could save about $8.8 million 

annually or $44 million over the next 5 years. This figure, however, does not take into 

account that some beneficiaries currently having tests done by a podiatrist may have 

the test done by another physician specialty. 

2Based on a one percent national sample of 1991 services maintained by the Office 

of Inspector General. 

6 
RECOMMENDATION 

We believe the monetary benefits of tighter utilization policies, such as prepayment 

thresholds, are evident. The HCFA has convened a workgroup to review coverage 

policies for these tests. They plan to issue new coverage guidelines. We recommend 

that HCFA continue to work with carriers to ensure that there are sufficient 

safeguards to prevent the unnecessary utilization of lower extremity tests. These 

safeguards may include the policies that are currently utilized by some carriers. 

7 
COMMENTS 

Comments and OIG Response 

The HCFA concurred with our recommendation. In HCFA’S view, a variety of 

approaches might be appropriate to curtail unnecessary utilization in addition to 

prepayment thresholds. We agree that various approaches could result in savings. 

Our recommendation contains sufficient flexibility to embrace workable monitoring 

techniques at any phase of utilization review. We hope the examples of carrier 

practices which we have described in this report will be helpful to the Noninvasive 

Vascular Testing Work Group, which has been convened by HCFA to address such 

issues. 

The HCFA suggested that the technical and/or professional components of tests 

involving lower extremity arteries may have been overvalued, thus resulting in 

excessive payments. The HCFA felt OIG should examine this issue. We will consider 

adding this issue to our workplan. 

The Assistant Secretary for Planning and Evaluation reviewed the report and 

expressed concurrence. 

Technical comments 

The HCFA suggested the chart on page 2 indicate whether the figures are based on a 

calendar or fiscal year. We revised the chart to reflect that the figures represent 

calendar years. 

The HCFA questioned our cost projections based on more than 517,000 tests. This 

figure should have read 51,797 tests. However, we have revised and refined our 

calculations using complete 1991 data recorded through June 1992. The revised 

estimate rises to an annual savings of about $5.7 million (64,915 cases with savings 

multiplied by an average payment of $89 based on the one percent national sample 

maintained by our office). The $89 figure represents the average payment for lower 

extremity tests using complete figures recorded through June 1992. The previously 

cited figure of $98 reflected figures recorded at the close of December 1991. 

Additional information may be found in Appendix C. 

The full text of HCFA comments appears in Appendix B. 

8 
APPENDIX A 

Nineteen carriers implemented special policies relating to coverage, documentation, 

and/or equipment requirements. Because of concerns about the confidentiality of 

carrier policies, we will not identify the carriers. 

F Acceptable symptoms delineated. 

II B Test must produce hard-copy output with a bidirectional 

flow. + 

II c Medical necessity review conducted on all claims. 

D Acceptable diagnoses delineated. 

Test must produce hard-copy output using bidirectional II vascular flow/imaging.

E 

II F Acceptable diagnoses delineated. 

II G Test must produce hard-copy output signed by physician. 

II H Defines requirements for limited and complete tests. 

Documentation must accompany claims. II I 

Acceptable diagnoses delineated. II J 

II K Covered only in cases of planned surgical intervention.

Acceptable symptoms delineated. II L 

Covered only in cases of planned surgical intervention. II M 

Patient record must contain hard-copy output/imaging. II N 

II 

o Claims must include a report of clinical findings and test 

results. + 

Acceptable symptoms delineated. 

Acceptable symptoms delineated. 

Acceptable diagnoses delineated. 

Medical records must contain documentation. 

+ Applies specifically to podiatrists.

A -1 
APPENDIX B 

COMMENTS ON THE DRAFI’ REPORT 

B-1 
.- W 

DEPARTMENT OF HEALTH& HUMAN SERVICES 

Memorandum 

%iiiiifiiiiii!@“’‘2“ 

Acting Administra or


Office of Inspector General (OIG) Draft Report: “Medicare Testsof Lower


Extremity Arteries,” OEI-03-91-O0950


Bryan B. Mitchell


Principal Deputy Inspector General


We reviewed the above-referenced draft report concerning the results of 

OIG’S review of carriers’ use of special policies to combat umecesary and 

inappropriate noninvasive tests of lower extremity arteries. 

We agree with OIG’S recommen&tion that the Health Care Financing 

Administration should continue to work with carriers to ensure that sufficient 

payment safeguards are in place for Medicare-covered noninvasive tests of 

lower extremity arteries. However, we do not agree with OIG’S projected 

savings for the nationwide implementation of the use of prepayment 

thresholds prior to the application of other coverage criteria. Our detailed 

comments are attached for your consideration. 

Thank you for the opportunity to review and comment on this draft 

report. Please advise us if you agree with our position on the report’s 

recommendation at your earliest convenience. 

Attachment 

z 
on Office of Inspector General (OIG) Draft Re~oti 

“Medicare Tests of Lower Extremity Arteries” 

0EI-03-91-O0950 

Recommendation 

That HCFA continue to work with carriers to ensure that there are sufficient 

safeguards to prevent the unnecessary utilization of lower extremity tests. 

These safeguards may include the policies that are currently utilized by some 

carxiers. 

JICFA Remonse 

We agree. The Noninvasive Vascular Testing Work Group, convened by 

HCFA and composed of Medicare carrier medical directo~ is working to 

develop model local medical review policies for tests of lower -emity 

arteries and transcranial dopplers. 

Although OIG focused on prepayment review, we believe a variety of policies 

and approaches might be appropriate and ought to be considered by OIG 

when reviewing this area. They include the following: 

- The thrust of HCFA utilization review activities is moving to a 

postpayment basis. The effectiveness of prepayment review versus 

targeted postpayment review should be evaluated. Prepayment 

review may not be cost-effective, given the relative costs of manual 

review compared with the payment amount for lower extremity and 

transcranial doppler tests. Reliance on prepayment review without 

other checks also runs the risk of increasing utilization, if physicians 

bemme aware of screen parameters and take advantage of the 

situation. 

- It may also be beneficial to examine payment for these tests. 

Specifically, it has been suggested that the payment amounts for the 

technical and/or professional components of these tests are too high. 

The rates could be too high given the way that technical components 

were determined or because these tests are in the low range of the 

work scale and physicians responding to the Hanmrd Sumey may 

have overestimated the value of the services at the low end of the 

work scale. 
Page 2 

In addition, OIG found that special utilization policies could produce savings 

to the Medicare program, and used as an example tie adoption by four 

carriers of a screening threshold of two tests a ya, per physician, per 

beneficiary. While nationwide implementation of this policy might achieve 

some savings, OIG does not present any rationale for its selection of this 

policy (versus more or less stringent policies) as a baseline policy. OIG also 

does not address the appropriateness of placing emphasis solely on volume 

and COSLwithout regard to a determination of tie appropriate utilization of 

the test involved. 

Technical Comments 

Backmound, page 2- the chart and/or the accompan~g text should indicate 

whether the figures are based on a calendar or fiscal year. 

Findinml page 6, second paragraph under “Coverage IJolkks Could Produce 

Savings” -the paragraph states that $5 million could be saved annually based 

on the experience of the four jurisdictions which used prepayment thresholds 

in 1991. This savings estimate assumes that near]y 518,000 tests would not 

have been performed if the same prepayment threshold had been in place 

nationally and is based on the average cost of about $98 per test. 

This conflicts with the chart on page 2 which indicates that the average 

allowed amount in 1991 was $89. The problem may be as simple as 

transposed digits or it muld be a case of using calendar year figures in one 

instance and fiscal year data in the other. 

Finally, the estimated $5 million in annual savings appears to be incorrect 

based on the data provided. The number of tests (518,000) multiplied by the 

average cost per test ($98) produces savings totig over $50 million. This 

figure exceeds the total dollars allowed in 1987 and 1988 for all diagnostic 

testsof the lower extremities. Perhaps OIG means to my that over the entire 

5-year period of 1987-91, 518,000 tests would have been performed. Assuming 

20 percent or roughly 104,000 fewer tests would have been performed in 1991, 

at an average savings of $98 per tes~ savings for 1991 would still exceed 

$10 million. 
APPENDIX C 

ESTIMATED SAVINGS BASED UPON LIMITING 

THE NUMBER OF TESTS PER BENEFICIARY 

To estimate the potential savings attributable to limiting the number of tests, we 

reviewed the 1991 experience of Medicare carriers. Four carriers implemented 

prepayment thresholds of two tests a year per physician per beneficiary prior to 1991. 

Ushg­ a one percent sample of Medicare Part B payments for 1991 reflecting data 

through December 1991, we developed the following distributions. 

AU Carriers Four Carriers with Limitations 

(2/Year) 

Number of Number Number Number Number 

Tests per of of of of 

Beneficiary Tests Beneficiaries Tests Beneficiaries 

1 Test 477,700 477,700 71,800 71,800 

2 Tests 111,800 55,900 12,000 6,000 

3 Tests 59,700 19,900 5,100 1,700 

4+ Tests 50,400 12,600 2,400 600 

Average Number of Tests 

per Beneficiary 1.24 1.14 

Based upon this data, we determined the carrier limitation of two tests per beneficiary 

per physican would produce an 8.1 percent reduction in the number of tests 

performed. At the close of June 1992, Part B data indicates that 801,415 tests were 

performed for a total allowed amount of approximately $71,232,000. Applying this 8.1 

percent reduction, we estimated that approximately $5,769,000 could be saved in the 

amount allowed if this two-test limit were applied nationwide. 

c-1 
Bryan B. Mitchell


Principal Deputy Inspector General


OIG Final Report: “Medicare Tests of Lower Extremity Arteries,” OEI-03-91-00950


Gerald H. Britten 

Acting Assistant Secretary for 

Planning and Evaluation 

Attached is a copy of our final inspection report entitled, “Medicare Tests of Lower 

Extremity Arteries.” 

We found that many Medicare carriers--over half the carriers responding to our 

queries--have instituted special policies to combat unnecessa~ and inappropriate 

noninvasive tests of lower extremity arteries. Thirteen carriers implemented 

prepayment thresholds to curtail utilization improprieties. The HCFA had previously 

warned carriers about abusive billings for these kinds of tests. 

We believe the monetary benefits of tighter utilization policies, such as prepayment 

thresholds, are evident. Based on the experience of four carriers which have threshold 

limits of two tests a year per physician per beneficiary, Medicare would save about 

$5.7 million annually. 

The HCFA has convened a workgroup to review coverage policies for these tests. 

They plan to issue new coverage guidelines. We recommend that HCFA continue to 

work with carriers to ensure that there are sufficient safeguards to prevent the 

‘mlTR’w33a..jTl+li!iiza+ikm of k.rwm ‘RXt,~TIiit~
 ‘1-6’13. m-es-e Sa?f”qyfmfi may im’iwtie ‘he 

policies that are currently utilized by some carriers. 

If you have any questions about this report, please call me or Michael Mangano, 

Deputy Inspector General for the Office of Evaluation and Inspections, or have your 

staff contact Penny Thompson at (410) 966-3138. 

Attachment 
Bryan B. Mitchell


Principal Deputy Inspector General


OIG Final Report: “Medicare Tests of Lower Extremity Arteries,” OEI-03-91-O0950


William Toby, Jr.


Acting Administrator


Health Care Financing Administration


Attached is a copy of our final inspection report entitled, “Medicare Tests of Lower


Extremity Arteries.”


We found that many Medicare carriers--over half the carriers responding to our


queries--have instituted special policies to combat unnecessary and inappropriate


noninvasive tests of lower extremity arteries. Thirteen carriers implemented


prepayment thresholds to curtail utilization improprieties. The HCFA had previously


warned carriers about abusive billings for these kinds of tests.


We believe the monetary benefits of tighter utilization policies, such as prepayment


thresholds, are evident. Based on the experience of four carriers which have threshold


limits of two tests a year per physician per beneficiary, Medicare would save about


$5.7 million annually.


The HCFA has convened a workgroup to review coverage policies for these tests.


They plan to issue new coverage guidelines. We recommend that HCFA continue to


work with carriers to ensure that there are sufficient safeguards to prevent the


unnecessary utilization of lower extremity tests. These safeguards may include the


policies that are currently utilized by some carriers.


The HCFA concurred with our recommendation. However, they felt other


approaches might also be effective in addition to prepayment thresholds. We did not


examine alternative approaches. However, our recommendation contains sufficient


flexibility to include other utilization review techniques.


If you have any questions about this report, please call me or Michael Mangano,


Deputy Inspector General for the Office of Evaluation and Inspections, or have your


staff contact Penny Thompson at (410) 966-3138.


Attachment

Morning Mail: Yes — x No

Title: Medicare Tests of Lower Extremity Arteries 

Reference: OEI-03-91-O0950 Contact: Penny Thompson (410) 966-3138 

We have released a 

Extremity Arteries.” 

final inspection report entitled, “Medicare Tests of Lower 

In response to warnings from the Health Care Financing Administration (HCFA) 

about abusive billings for noninvasive diagnostic tests of lower extremity arteries, we 

found that many Medicare carriers--over half the carriers responding to our queries-­

have instituted special policies to combat unnecessary or inappropriate tests. Thirteen 

carriers implemented prepayment thresholds to combat the problem. We believe the 

monetary benefits of tighter utilization policies, such as prepayment thresholds, are 

evident. Based on the experience of four carriers which have threshold limits of two 

tests a year per physician per beneficiary, Medicare would save about $5.7 million 

annually. The HCFA has convened a workgroup to review coverage policies for these 

tests. They plan to issue new coverage guidelines. We recommend that HCFA 

continue to work with carriers to ensure that there are sufficient safeguards to prevent 

the unnecessary utilization of lower extremity tests. The HCFA concurred with our 

recommendation.