Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

Imaging Services for 

Nursing Home Patients: 

Medical Necessity 

JUNE GIBBS BROWN 

General 

AUGUST 1997 -

OEI-O9-9500092 
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. 

Offke 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 San Francisco Regional Office prepared this report under the direction of 

Kaye D. Kidwell, Regional Inspector General, and Paul A. Gottlober, Deputy Regional 

Inspector General. Principal OEI staff included: 

REGION IX HEADouARTEI2s 

Brad Rollin, Project Leader Stuart Wright, Program Specialist 

Robert Gibbons, Project Leader 

Kathy Dezotte 

Don Loeb 1-

ThomasPurvis 

Joseph Corso, Consultant 

To obtain a copy of this report, call the San Francisco Regional Office at 415437-7900. 
EXECUTIVE SUMMARY 

PURPOSE 

This inspection determined the medical necessity of imaging services provided to residents 

of nursing homes and paid by Medicare. 

BACKGROUND 

Nursing homes* arrange for ancillary services--such as x-rays and electrocardiograms 

(EKGs)--for patients who require them. In some instances, firms known as potiable x-ray 

suppliers provide x-ray and EKG services in nursing homes. ** According to Medicare 

regulations, all imaging services must be ordered by a physician. To assess the medical 

necessity of imaging services, we reviewed 729 imaging services that nursing home 

patients received in 1994. 

FINDINGS 

Less than 2 percent of chest x-raysprovided to nursing home patients in 1994 were 

medically unnecessary or undocumented 

Of the $120 million that Medicare paid for chest x-rays during 1994, it paid less than 

$1 million for medically unnecessary and undocumented services. The quality of portable 

chest x-ray images is acceptable in more than 90 percent of cases. 

In contrast to chest x-rays, 25 percent of EKGs provided to nursing home patients in 

1994 were medically unnecessary or undocumented 

In 1994, approximately 12 percent of EKGs were medically unnecessary, and in more 

than 13 percent of cases, documentation was inadequate. Medicare’paid almost 

$32 million for EKGs for nursing home patients in 1994. This included paying 

$8.4 million for 194,000 medically unnecessary or undocumented EKGs. High volume 

physicians and suppliers comprise a very small proportion of providers in general, but 

they accounted for approximately 9 percent of all medically unnecessary and 

undocumented EKGs in 1994. Portable suppliers are much more likely to be paid for 

undocumented EKGs than non-portable suppliers. 

� For purposesof this inspection, nursing homes refers to skilled nursing, Medicaid nursing, board and 

care, assisted living, and retirement facilities. 

� * Otheroptionsfor nursing facilities include providing the service with theii own equipment or 

transporting patients to hospital outpatient departments, imaging centers, physician offices,or other facilities. 

i 
The HCFA should require that Medicare contractorsprofile high volume EKG suppliers 

and physicians to determine if they routinely billfor medically unnecessary and 

undocumented EKGs 

AGENCY COMMENTS 

We received comments on the draft report from HCFA and the Assistant Secretary for 

Planning and Evaluation. Both HCFA and the Assistant Secretary for Planning and 

Evaluation concurred with our recommendation. We have made minor clarifications in 

the report in response to technical comments made by these agencies. 

ii 
TABLE OF CONTENTS 

PAGE 

EXECUTIVE SUMMARY 

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

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

�  Medical necessity of chest x-rays . . . . 

�  Medical necessity of electrocardiograms 

RECOMMENDATION . . . . . . . . . . . . . 

APPENDICES 

A: OIG Medical Review Criteria . . . . . . . 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 

...................... 9 

. . . . . . . .................... A-l 

B: Confidence Intervals .......................................... B-l 

C: Agency Comments ........................................... C-l 
INTRODUCTION 

PURPOSE 

This inspection determined the medical necessity of imaging services provided to residents 

of nursing homes and paid by Medicare. 

BACKGROUND 

Medicare (PartsA and B) 

Congress enacted Medicare in 1965 to provide health services to the elderly and disabled. 

The program consists of two distinct parts. The first part is hospital insurance or Part A. 

Part A covers services furnished by providers, i.e., hospitals, home health agencies, and 

skilled nursing facilities. The second part, supplementary medical insurance or Part B, 

covers a wide range of medical services and supplies. These include physician services, 

outpatient hospital services, diagnostic laboratory tests, x-rays, ambulance services, and 

durable medical equipment. 

The Health Care Financing Administration (HCFA) administers Medicare and contracts 

with private insurance companies to process and pay claims. Contractors that process 

Part A claims are referred to as fiscal intermediaries. Contractors that process 

Part B claims are called carriers.’ Some companies have both fiscal intermediary and 

carrier contracts. 

The HCFA provides substam@ guidance to fiscal intermediaries and carriers on 

applicable laws, regulations, national polices, fee schedules, and other requirements. In 

some areas, federal law and HCFA allow the fiscal intermediaries and carriers latitude in 

determining both coverage and reimbursement. 

Skilled Nursing Facilities and Other Extended Care Facilities 

The Medicare program provides coverage under Part A for skilled nursing services but 

not for custodial care. The skilled nursing benefit includes: 

b nursing care, 

b bed and board, 

b physical, occupational, and speech therapy, 

b medical social services, and 

b drugs, biologicals, supplies, appliances, and equipment for use in the facility. 

’ An exception to this general rule is that fiscal intermediaries prockss Part B claims submitted 

by hospitals (for inpatient and outpatient services), home health agencies, and skilled nursing facilities. 
Medicare law stipulates that beneficiaries are eligible for skilled nursing benefits if they 

are transferred to the skilled nursing facility after a minimum 3day covered stay in an 

acute hospital. The patient must require skilled nursing care, and a physician must order 

the services. Part A covers skilled nursing services for up to 100 days per “spell of 

illness. ” 

In addition to skilled nursing facilities, other facilities offer varying levels of care for 

Medicare beneficiaries. These include Medicaid nursing, board and care, assisted living, 

and retirement facilities. We have included all of these facilities in the scope of this 

inspection and refer to them collectivelyas “nursing homes. ” 

Imaging services to nursing home residents 

Nursing homes frequently provide directly or arrange for ancillary services--such as xrays--for their patients who require them. Imaging services include radiography (x-ray), 

magnetic resonance imaging (MRI), computerized axial tomography (CAT scan), 

echography (ultrasound), and cardiac catheterization. For purposes of this inspection, 

electrocardiographic (ERG) services are included as imaging services. 

In some instances, firms known as portable x-ray suppliers provide x-rays and ERGS to 

nursing home residents. 2 Medicare’s portable x-ray benefit covers skeletal films of the 

arms, legs, pelvis, vertebral column, and skull as well as chest and abdominal films that 

do not use contrast media. Medicare also covers EKGs under the portable benefit, if they 

are medically necessary and are performed by certified portable x-ray suppliers. All of 

these services must be diagnostic rather than therapeutic. Portable x-ray suppliers must 

meet HCFA’s conditions of participation. These conditions require, among other things, 

that suppliers comply with State and local laws, which may provide for the licensing and 

regulation of portable suppliers. 

Billing for imaging services 

Imaging services provided to nursing home patients are billed to the f=cal intermediary or 

the carrier depending on which entity provides the service and whether there is any 

financial arrangement between the service provider and a skilled nursing facility. In all 

cases, a physician may bill the Part B carrier for interpreting an imaging procedure. For 

a full discussion of billing options and practices, see the companion report “Portable 

Imaging Services: A Costly Option” (OEI-O9-9500090). 

OperationRestore Trust 

In May 1995, President Clinton and Health and Human Services Secretary Donna Shalala 

announced the kickoff of Operation Restore Trust (ORT), a new health care anti-fraud 

’ Other options for musing facilities include providing the service with their own equipment or 

transportingpatientsto hospital outpatient departments, imaging centers, physician offices, or other facilities. 
initiative. The ORT is a crackdown on Medicare and Medicaid fraud, waste, and abuse in 

home health agencies, nursing homes, and durable medical equipment suppliers. The 

ORT focuses on the five states--California, New York, Florida, Texas, and Illinois--that 

account for 40 percent of the nation’s Mdicare beneficiaries and program expenditures. 

The ORT includes Federal and State agencies in collaboration with the private sector and 

beneficiaries. The federal agencies involved include the Office of Inspector General 

(OIG), HCFA, and the Administration on Aging. The OIG has undertaken a number of 

national program inspections aimed at identifying and eliminating systemic weaknesses 

that allow fraud, waste, and abuse to occur in the areas of home health, nursing homes, 

and durable medical equipment. This inspection was conducted as part of ORT. 

This report is the last in a series of three reports prepared by the OIG on imaging services 

for nursing home patients. The first report, “Portable Imaging Services: A Costly 

-Option” (OEI-09-95-00090), determined how different billing practices, financial 

arrangements, and clinical settings affect the cost of imaging services for the Medicare 

program and its beneficiaries. The second report, “Portable Imaging Services: Nursing 

Home Perspectives” (OEI-O9-95-ooO91), determined when, how, and why nursing homes 

use portable imaging services for their patients. 

METHODOLOGY 

Sample Selection 

From a 1 percent Common Working File database, we extracted data on all beneficiaries 

who were in a nursing home at any time during 1994. We then extracted claims data on 

all imaging services provided to these beneficiaries. 

We identified nursing home residents through a number of indicators in the claims data. 

These indicators included place of service, hospital discharge destination, skilled nursing 

claims, and HCFA Common Procedure Codii System (HCPCS) codes that are likely to 

correspond to a nursing home resident (such as transportation of portable x-ray 

equipment). Based on a pre-test of this approach, we estimate that our database included 

more than 95 percent of all nursing home residents who received imaging services. From 

this database, we selected a stratified sample: 
Stratum 

All or part billed 

by skilled nursing 

facility 

Billed directly by 

supplier or other 

service provider 

EKGs (HCPCS= 93000 through 93010) 

CAT scans and MRIs 

(numerous HCPCS codes) 

ORT States 53 

Non-ORT States 32 

ORT States 134 

Non-ORT States 60 

ORT States 143 

Non-ORT States 65 

ORT States 167 

Non-ORT States 75 

When there was no skilled nursing facility claim that could be associated with an imaging 

service, we verified that the beneficiary was a nursing home resident by contacting 

physicians, portable suppliers, and nursing homes. We excluded beneficiaries from the 

sample who did not reside in skilled nursing, Medicaid nursing, board and care, assisted 

living, or retirement facilities when the service was rendered. 

Medical Record Request 

For all claims, we requested medical records and original x-rays, EKGs, MRIs, and 

CAT scans. We requested information from all entities involved in providing the service. 

These included nursing homes, physicians, hospitals, portable x-ray suppliers, and 

independent laboratories. We specifically requested: 

�  the physician’s order for the procedure, including documentation of the need for 

portable x-ray or EKG services (if applicable); 

�  ‘the original x-ray, MRI or CAT scan film,’ or EKG; 

�  the written interpretation of the procedure; 

�  the patient’s history; and 

0 any other progress notes, nurses’ assessments, and medication records for the week 

up to and including the date of the procedure. 

Medical Review Screening Instrument 

With the assistance of a medical review contractor, we developed screening instruments 

based on appropriateness criteria from the American College of Radiology and the 

American College of Cardiology: We developed separate screening instruments for 

each imaging procedure. Only those procedures that failed to meet the screening 

instrument criteria were sent to the medical review contractor for further analysis. 

4 
In no instances did OIG reviewers determine that a case was medically unnecessary. 

Appendix A contains the screening criteria for chest x-rays and EKGs. 

Medical Review Process 

The contractor developed its own medical review protocol. Depending on the result of the 

OIG screening, the type of imaging service, and the setting in which it was provided, 

the review included (1) medical necessity and appropriateness, (2) quality of care, 

(3) assessment of the need for portable services, and/or (4) assessment of chest x-ray 

fihn quality. 

Initially, this inspection included MRIs and CAT scans. We discontinued the medical 

review of these procedures after the medical review contractor determined that, based on a 

sample of cases, almost all of these services were medically necessary. Continued 

medical review would have been costly and unproductive. 

. 

, 
FINDINGS 

Of the $120 million that Medicare paid for chest x-rays during 1994, it paid less than 

$I million for medically unnecessary and undocumented chest x-rays 

Chest x-rays are a routine diagnostic procedure used by physicians to rule out or diagnose 

numerous conditions in elderly patients. Physicians can justify ordering a chest x-ray 

when a nursing home patient has a respiratory problem that might be considered minor for 

the general population. The results of our medical review confirm this. As the following 

table shows, based on our projections, almost all chest x-rays rendered in 1994 were 

determined to be medically necessary: 

The High Percentage of Medically Necessary Chest X-rays 

Illustrates Its Acceptance and Use as a Diagnostic Tool 

Total number of chest x-rays in 1994 1,677,530 

Percent Medically Necessary per Screening Instrument 40.9 

Criteria 

Percent Medically Necessary per Medical Review Contractor 57.8 

Percent Medically Unnecessary 1.0 

Percent Inadequate Documentation 0.4 

.* 

Approximately 41 percent of chest x-rays met the screening instrument criteria for medical 

necessity. In 58 percent of cases, information in patients’ medical records did not meet 

the basic criteria, but medical reviewers determined that the services were necessary and 

appropriate. In these cases, beneficiaries exhibited different or less severe symptoms than 

those that were determined to be medically necessary via the screening instrument. The 

medical reviewers also determined that beneficiaries who received multiple chest x-rays in 

a short period of time received appropriate services. 

Overall, carriers and our medical review contractor agreed that chest x-rays are 

appropriate for diagnosing numerous conditions. One carrier manual lists four pages of 

diagnoses that would justify the need for a chest x-ray. The list includes numerous 

cardiovascular and respiratory conditions as well as common nursing home patient 

problems such as cancer, stroke, asthma, diabetes, difficulty swallowing, senile 

degeneration, and weight loss. 

6 
The quality of portable chest x-ray images is acceptable in more than 90 percent of cases 

Some critics have questioned the quality of portable chest x-ray images because of the 

difficulty of positioning bed-ridden patients. In our companion reports on portable 

imaging services, we noted that using a portable supplier for non-emergency chest x-rays 

and EKGs has become routine for sampled nursing homes. Portable suppliers provide 

more than 60 percent of all chest x-rays for nursing home patients. 

Film quality was acceptable for almost all portable chest x-rays. In most of the cases 

where the medical reviewer deemed the quality unacceptable, the technician had failed to 

include left and right markers on the image. There were almost no cases where the image 

was unreadable. 

In 1994, approximately 12 percent of EKGs were medically unnecessary, and in more 

than 13 percent of cases, documentation was inadequate 

In 1994, Medicare paid almost $32 million for EKGs for nursing home patients. This 

included paying $8.4 million for 194,000 medically unnecessary or undocumented EKGs. 

Medicare paid for these services because EKGs are not a costly procedure and are a low 

priority for medical review. The table below summarizes the medical review findings 

projected nationally: 

Percent Medically Necessary per Medical Review Contractor 50.7 

Percent Medically Unnecessary 11.9 

EKGs Are Frequently Questionable 

Total number of EKGs in 1994 3’ 772,836 

Percent Medically Necessary per Screening Instrument 24.2 

Criteria 

Percent Inadequate Documentation 13.3 I

In the medically u~ecessary cases, the medical review contractor determined that the 

. EKG served no useful diagnostic purpose. The table on the following page illustrates a 

few typical cases. It shows that nursing homes, physicians, and/or suppliers (1) falsify or 

miscode diagnosis codes, (2) do not have adequate documentation to support providing the 

service, or (3) inappropriately provide EKGs. 
Medical Review Shows the Nature of Medically Unnecessary EKGs 

I

Patient Diagnosis on Claim Medical ReviewFinding 

#l Hyperlipidemia EKG was done to evaluatehyperlipidemia. EKG 

is not a testfor hyperlipidemia. 

#2 Premature Beats Nothing in the medical record indicatesthat 

rhythmwas a problem. 

#3 Cardiac Arrest Patientwas deceased--EKG was a flatline. 

#4 Cerebrovascular No reasonfor EKG. Recentlydischargedfrom 

Accident hospitalwhere EKG wasprobab& done. 

#5 Congestive Heart Medical record showsno rationalefor requesting 

Failure an EKG. 

#6 Acute Cystitis No reasons listed in medical record for an EKG. 

Physicians and portable suppliers who provide more EKGs per beneficiary than other 

providers are far more likely to provide medically unnecessary EKGs 

Physicians or suppliers who bill for more than four EKGs per beneficiary per year 

comprise a very small proportion of providers in general, but they accounted for 

approximately 9 percent of all medically unnecessary and undocumented EKGs in 1994. 

On average, most physicians and portable suppliers who provide and interpret EKGs do so 

for beneficiaries who receive one or two EKGs per year. Some physicians and portable 

suppliers, however, provide or interpret far more per beneficiary. One supplier, for 

example, provided an average of 27 EXGs for each of its beneficiaries in 1994. While biweekly EKGs might be appropriate in special instances, this average is extreme. 

One carrier recouped thousands of dollars that it had paid a physician in our sample for 

ordering and interpreting routine EKGs. As a result of this inspection, we referred a 

physician and a portable supplier to the Office of Investigations. 

Portable suppliers are much more likely to be paid for undocumented EKGs than nonportable suppliers 

In 1994, more than 28 percent of portable EKGs were not justified in the medical records, 

while only 3 percent performed by non-portable suppliers lacked appropriate 

documentation. The rates of medically unnecessary EKGs were similar for both portable 

and non-portable suppliers. Portable suppliers provided more than one-third of EKGs for 

nursing home patients in 1994. 

We found no significant difference in the rates of medically u~ecessary or undocumented 

EKGs between the five Operation Restore Trust States and the rest of the country. 

8 
. 

The HCFA should require that Medicare contractors profile high volume 

EKG suppliers and physicians to determine if they routinely bill for medically 

unnecessary and undocumented EKGs 

Suppliers and physicians who provide an average of more than four EKGs per beneficiary 

annually are more likely to be providing medically unnecessary or undocumented services 

than suppliers and physicians who provide one or two EKGs per beneficiary. Eliminating 

inappropriate billing by these providers would save Medicare less than $1 million 

annually, but it would reduce or eliminate payments to providers who routinely bill for 

medically u~ecessq EKGs. 

AGENCY COMMENTS 

We received comments on the draft report from HCFA and the Assistant Secretary for 

Planning and Evaluation. Both HCFA and the Assistant Secretary for Planning and 

Evaluation concurred with our recommendation that Medicare contractors profile high 

volume EKG suppliers and physicians. In addition, HCFA noted that it has eliminated 

coverage and payment for EKGs under the portable x-ray benefit and now requires that all 

Medicare tests be ordered by the patient’s treating physician. 

Both HCFA and the Assistant Secretary for Planning and Evaluation commented that the 

use of the term “nursing facility” in the draft report was confusing. In response, we have 

revised the report to refer to sampled facilities as “nursing homes.” These include skilled 

nursing, Medicaid nursing, board and care, assisted living, or retirement facilities. Where 

appropriate, we differentiate between skilled nursing facilities and other nursing homes 

included in the study. 

. 

The HCFA commented that our discussion of the skilled nursing benefit was too vague. 

Since neither of our findings pertains specifically to skilled nursing facilities, the purpose 

of describing these facilities in the background was simply to establish that they are 

defined specifically in the Medicare law. The companion reports “Portable Imaging 

Services: A Costly Option” (OEI-O9-9540090) and “Portable Imaging Services: Nursing 

Home Perspectives” (OEI-O9-95-00091) contain a more detailed description of the skilled 

nursing benefit. 

See appendix C for the full text of the agencies’ comments. 

9 
APPENDIX A 

OIG MEDICAL REVIEW CRITERIA 

Diagnoses/symptoms necessary for OIG reviewer to deem 

CHEST X-RAYS medically necessary: 

Cardiovascular 

Angina 

Aortic valve disease or injury 

Arrhythmia 

Atria1 fibrillation 

Atria1 tachycardia 

Cardiac disease 

Cardiovascular system symptoms 

Chest pain 

Heart disease 

Ischemic heart disease 

Myocardial infarction 

OTHER 

Cerebrovascular accident 

Choking 

Coma 

Diabetes 

Pulmonary 

Bronchopneumonia 

Cancer 

Cough with hemorrhage 

Emphysema 

Lung abscess 

Shortness of breath 

Tuberculosis 

Upper respiratory infection 

Fracture of clavicle, collarbone, coronoid process, larynx, rib, scapula, shoulder blade, 

.a 

SttXllUlll 

Hernia 

Malignant neoplasm (any) 

Scoliosis 

Septicemia 

Stroke 

Syncope 

Other criteria that must be met in addition to diagnoses/symptoms: 

b Service does not appear to be a routine preoperative screen. 

b Service does not appear to be a follow-up, performed less than 14 days after 

another chest x-ray. 

b Service is a follow-up, less than 14 days after prior chest x-ray, but beneficiary is 

on ventilator or has congestive heart failure, pneumonia, or pulmonary congestion, 

and beneficiary is experiencing new symptoms. 

A-l 
Diagnoses/symptoms necessary for OIG reviewer to deem 

EKGs medically necessary: 

Arrhythmia 

Angina 

Arteriosclerosis 

Atria1 fibrillation or flutter 

Bradycardia 

Cerebrovascular accident 

Complication of pacemaker 

Congestive heart failure 

Coronary artery embolism, sclerosis, or rupture 

Heart disease 

Myocardial infarction 

Permanent pacemaker 

Respiratory failure 

Syncope 

Tachycardia 

Other criteria that must be met in addition to diagnoses/symptoms: 

b Service was not a follow-up EKG performed less than 14 days after another EKG. 

b Service was a follow-up EKG performed less than 14 days after another EKG, but 

beneficiary was experiencing new symptoms. 

A-2 
APPENDIX B 

The following tables show the point estimates and 95 percent confidence intervals for 

selected statistics in the order they appear in the report. 

statistic 

Point estimate 95 percent 

confidence interval 

Percent of nursing home residents’ 1994 chest x-rays that were medically unnecessary or 

undocumented 

I- 1.3 percent I 0.2 percent - 2.5 percent 

Amount Medicare paid for chest x-rays provided to nursing home residents during 1994 

I--- $1 19,843,868 I $98,572,561 - $141,115,174 

Amount Medicare paid for medically unnecessary or undocumented chest x-rays provided to 

nursing home residents during 1994 

$957.736 $35,271 - $1,880,200 

Total number of chest x-rays provided to nursing home residents during 1994 

1,677,530 1,531,153 - 1,823,906 

Percent of nursing home residents’ 1994 portable chest x-rays that had an acceptable quality 

image 

92.0 percent 85.6 percent - 98.5 percent 

Percent of nursing home residents’ 1994 chest x-rays that were portable 

61.6 percent 52.8 percent - 70.4 percent 

Percent of nursing home residents’ 1994 EKGs that were medically unnecessary or 

undocumented 

I 25.1 percent 16.5 percent - 33.8 percent 

Percent of nursing home residents’ 1994 EKGs that were medically unnecessary

I I 

I 11.9 percent I 5.7 percent - 18.1 percent 

Percent of nursing home residents’ 1994 EKGs that were undocumented 

13.3 percent 6.6 percent - 19.9 percent 

Amount Medicare paid for. EKGs provided to nursing home residents during 1994 

I $3 1,764,242 $23,294,925 - $40,233,559 

B-l 
statistic 

Point estimate 95 percent 

confidence interval 

Amount Medicare paid for medically unnecessary or undocumented EKGs provided to nursing 

home residents during 1994 

$8,362,146 $4,564,525 - $12,159,766 

Total number of medically unnecessary or undocumented EKGs provided to nursing home 

residents during 1994 

194,234 127,246 - 261,221 

11Total number of EKGs provided to nursing home residents during 1994 II 

II 651,801 - 893,871 

II Percent of medically unnecessary or undocumented EKGs that were provided by physicians and II 

suppliers with an average of 4 or more EKGs per benefkkry during 1994 II I I II 

II I 9.4 nercent I 1.O uercent - 17.9 percent II 

IIPercent of nortable EKGs that were undocumented II 

II 28.2. percent 12.7 percent - 43.6 percent II 

IIPercent of non-sortable EKGs that were undocumented II 

3.3 percent 0.4 percent - 6.2 percent 

Percent of nursinrr home residents’ 1994 EKGs that were nortable 

35.3 percent 25.1 percent - 45.5 percent 

Percent of EKGs provided to nursing home residents in ORT States in 1994 that were 

medically unnecessary or undocumented .. 

26.6 percent 17.0 percent - 36.2 percent 

Percent of EKGs provided to nursing home residents in non-ORT States in 1994 that were 

medically unnecessary or undocumented 

24.2 percent 11.5 percent - 36.9 percent 

B-2 
APPENDIX C 

AGENCY COMMENTS 

Health Care Financing Administration 

Health Care 

DEPARTMENT OF HEALTH & HUMAN SERVICES FinancingAUministration 

Memorandum 

DATE: JON27 I997 

TO: Juae Gibbs Brown 

SUBJECT: Office of Inspector General (OIG) Draft Report: “ImagingServices for 

Nursing Home Patients: MedicaINecessity,” (OEI-O9-95-00092) 

We reviewed the above-referenced report concerning the iuedical necessity of imaging 

services provided to residents of mrning facilities and paid by Medicare. 

Our detailed comments are attached for your consideration- Thank you for the 

opporhmity to review and comment on this report 

\ 

Attachment 

C-l 
Health Care Financine AdministrationIHCFA) Comments on 

; ffi or ” - e ervi s for ursitr 

J0EI-0!9-95-ooo92_1 

OIG Recommendation 

HCFA should require that Medicare con&actorsprofile high volume elecnocardiogram 

(EKG) suppliers and physicians to determine ifthey routinely bill for medically 

umeccssary and undocumented EKG& 

fICPA Resuons 

Weconcur. d rccommendationappearsto0beasassumingtiMticare 

contractarsha~themedicalnviewandbadget~o~tocanryitoutinacosteffective manna. We believe that two recent mgulation changes implementedhy HCFA 

cd%ctiw January 1, will have the efiket of reducing the dimensionsof the problem of 

Medicare paying for medically unnecessary and undocmnentadEKG Setvices-espekKy 

for those furnished by portable x-ray suppliers. The first change invokd the ehmination 

of coverage and payment for EKGs under the portable x-ray benefit The second change 

was the catablishmentof the requirement that in order to be considered medically 

necessary all Medicare tests (imcludingEKG@must be ordered by the patient’s treating 

physician. Since these two improvements in the Medicare regulationshave only been in 

effect for a short period of time, it is too early to lmow how helpful they will be in 

reducing the problem OIG identified. However, we believe the long-nm impact of these 

recent HCFA actions will be very favorable. 

HCFA’s goals are to ensure high quality health care, and to pay for services that are 

reasonable and medically mxisary. HCFA has talcenappropriate steps to target 

vuhemble areas in the Medicare prugran~ Medicare contractors conduct focused 

medicalreview(I;uR)onrmongoingbasistoensurethatservicespaidforbyMedicare 

are reasonable and appropriate. ‘Ihe FMR process allows contmetors to perform data 

analysistfiatallowsthem~identifyaberrantpa#ernsindatathatassistint;argetinghigh 

volume suppliers and physicians that are possibly bii routinely for services that are 

medically uunecessiiry. The eontractors use system edi& internal medieal review 

gaidclines, or medical review policies to target and limit abusive behavior. Qrrently, 

approximately 46 Medicarecormdon haveeditsinplacewithsetparametersrelatingto 

EKG services. 

Medicare eontractors are also curreutly using Provider Audit List&s (PAL) that profile 

providers that have been flagged for submittingerroneous or inappropriateclaims on a 

eontimral basis. Claims submitted by these providers are automaticallysuspended in 

order to allow the contractor an opportunity to eonduct medical review and make a 

c-2 

I 
Page 2 

payment determination. Use of the PAL in conjunction with FMR have resulted in 

dramatic savingsto the Medicareprogram As a result, our current data shows a 

4 percent increase in claim denials, 6 percent decrease in Medicare reimbmsement, 

6 percent~decreasein allowed charges, and a 7 percent decrease in allowed services. We 

believe the contractors have been very effective in using these mechanismsto ident@ 

Medicare dollars at risk, and target high vohune physicians and suppliers. 

Additional Comments 

The term nursing facility utilized throughoutthis report is misleading. Current Federal 

regulations d&ingukh between two types of long-term care (LTC) facilities: a nursing 

fkcilify @IF)under the Medicaidprogram and a skilled numingfacility (SNF) under the 

Medicare program. We suggestthat the tam LTC facility replace the words nursing 

fhility throughout this report when refhing to a generic musing home. If a policy or 

concern specifically relates to a Medicare SNP or a MedicaidNF, it should be so noted. 

The definition of the SNF‘benefit that appears in the Backgroundis too general. We 

suggest that it be more specific. The SNF benefit is referred to as post-hospital extended 

care services. It is designed to assistpersons who have had a 3day qualifying hospital 

stay and require skilled services on adaily basis to recuperate from an acute episode. 

Coverage, if approved, is limited to a total of 100days per benefit period. On the 21st 

day the beneficiary becomes responsiblefor a daily coinsurance amount equal to oneeighth of the inpatient hospital deductible, as prescribed by law. 

c-3 
Assistant Secretary for Planning and Evaluation 

DEPARTMENT OF HEALTH & HUNAN SERVICES mceol*secmsv 

wn(ington. DC. zo201 

~19l997 

To: June Gibbs Brown 

FROM: David F Garrison 

OlG m Rqxxt on Imaging Swiccs for Nursing Home Residents ­

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