Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

MEDICARE PAID 

$22 MILLION IN 2012 FOR 

POTENTIALLY 

INAPPROPRIATE 

OPHTHALMOLOGY CLAIMS 

Suzanne Murrin 

Deputy Inspector General for 

Evaluation and Inspections 

December 2014 

OEI-04-12-00281 
 

 

 

 

EXECUTIVE SUMMARY: MEDICARE PAID $22 MILLION IN 2012 FOR 

POTENTIALLY INAPPROPRIATE OPHTHALMOLOGY CLAIMS 

OEI-04-12-00281 

WHY WE DID THIS STUDY 

Medicare paid approximately $8.2 billion in 2012 to screen for, diagnose, evaluate, or 

treat cataracts, wet age-related macular degeneration (wet AMD), and glaucoma. 

Medicare uses a combination of national and local coverage requirements to determine 

whether it will cover services for these conditions. However, recent investigations have 

found that some ophthalmology services for these conditions are vulnerable to fraud, 

waste, and/or abuse. 

HOW WE DID THIS STUDY 

We reviewed Medicare claims data from 2012 and identified approximately 49 million 

claims that 46,456 providers submitted for screening for, diagnosing, evaluating, or 

treating cataracts, wet AMD, and glaucoma. We also reviewed the Medicare coverage 

database and identified 4 national requirements and 2 local coverage requirements that 

specified when Medicare should and should not cover certain ophthalmology procedures 

associated with these conditions. Then we analyzed these claims to identify those that 

were potentially paid inappropriately based on these requirements. We did not review the 

medical records for any claims to determine if exceptions to the requirements were 

documented and appropriate. We also calculated the total amount that Medicare paid 

each provider for these claims, and we determined which contractor paid these claims. 

WHAT WE FOUND 

Medicare paid $22 million for ophthalmology claims in 2012 that were potentially 

inappropriate, according to national and local coverage requirements. Specifically, 

$14 million was paid despite the presence of national requirements that were designed to 

prevent these payments. Similarly, $8 million was paid despite the presence of local 

coverage requirements that were designed to prevent these payments. Additionally, two 

of eleven Medicare contractors paid a disproportionate amount of the potentially 

inappropriate Medicare payments. 

WHAT WE RECOMMEND 

We recommend that the Centers for Medicare & Medicaid Services (CMS) (1) implement 

additional claims processing edits or improve existing edits to ensure claims are paid 

appropriately and (2) determine the appropriateness of ophthalmology claims identified 

in this report and take appropriate action. CMS concurred with both of our 

recommendations. 
TABLE OF CONTENTS 

Objective......................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................5 

Finding .........................................................................................................7 

Medicare paid $22 million for potentially inappropriate 

ophthalmology claims in 2012 .........................................................7 

Conclusion and Recommendations ............................................................12 

Agency Comments and Office of Inspector General Response .....14 

Appendix....................................................................................................15 

A: The Numbers and Dollar Amounts of Claims Paid Beyond 

Limitations Established in Each LCD, 2012 ..................................15 

B: The Number and Dollar Amount of Claims Paid Beyond Each 

of the Limitations Established in LCDs, 2012 ...............................16 

C: Agency Comments ...................................................................17 

Acknowledgments......................................................................................19 
 

 

 

 

 

OBJECTIVE 

To determine the extent to which Medicare payments for ophthalmology 

claims in 2012 were potentially inappropriate. 

BACKGROUND 

In 2012, Medicare paid approximately $8.2 billion for all services that 

screen for, diagnose, evaluate, or treat cataracts, wet AMD, and 

glaucoma.1 Recent investigations have found that certain ophthalmology 

services are vulnerable to fraud, waste, and/or abuse. For example, in 

2011, an ophthalmologist in Philadelphia was convicted for submitting 

$4.5 million in fraudulent claims, most of which were for diagnostic or 

evaluation services. Additionally, in 2013, an ophthalmologist in New 

Jersey was convicted of reusing single-use vials of Lucentis, an expensive 

ophthalmology biologic, from 2008 to 2009. 

Medicare Requirements for Ophthalmology Services 

Medicare uses a combination of national and local coverage requirements 

to determine whether certain ophthalmology services are covered. 

National requirements are created at the Federal level and apply to all 

Medicare beneficiaries and claims processing contractors.2 In the absence 

of specific national requirements, claims processing contractors may 

create their own local coverage requirements about what services to cover. 

The most common local coverage requirements are local coverage 

determinations (LCDs), which are contractor decisions about whether to 

cover particular services in their respective jurisdictions.3 Medicare may 

still pay for claims that do not meet the specifications outlined in national 

or local coverage requirements if additional documentation adequately 

explains the medical need for the claim. 

Medicare covers procedures to screen for, diagnose, evaluate, or treat 

many eye conditions. However, the three eye conditions for which 

Medicare pays the most each year are cataracts, wet AMD, and glaucoma. 

____________________________________________________________ 

1

 Medicare Part B covers ophthalmology services provided by licensed specialists, 

including ophthalmologists and optometrists. Social Security Act, § 1832(a)(1); Centers 

for Medicare & Medicaid Services (CMS), Medicare Benefit Policy Manual, Pub. No. 

100-02, ch. 15, § 30.4. Medicare claims identify the specialties of providers by using 

codes for those specialties. 

2

 Social Security Act, §§ 1862(a)(1)(A), 1862(l), 1869 (f)(1)(B); CMS, Medicare 

National Coverage Determinations Manual, Pub. No. 100-03, Foreword. 3

 Social Security Act, §§ 1862(a)(1)(A), 1862(l), 1869(f)(2)(B); CMS, Medicare 

Program Integrity Manual, Pub. No. 100-08, ch. 13, § 13.1.3. A single claims processing 

contractor may be responsible for more than one jurisdiction and apply a single LCD 

across more than one of its jurisdictions. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 1 
 

In 2012, Medicare paid approximately $8.2 billion to screen for, diagnose, 

evaluate, or treat these conditions. 

Cataracts. Medicare paid approximately $3.5 billion in 2012 for services 

that screen for, diagnose, evaluate, or treat cataracts, the leading cause of 

blindness in the world.4

 Medicare covers many services that diagnose or 

evaluate cataracts. However, it has a national requirement stating that it 

will not routinely cover more than one comprehensive eye examination 

and scan for beneficiaries whose only diagnosis was cataracts.5 

Medicare also covers several services that treat cataracts, including 

cataract surgeries. Cataract surgeries remove the poorly functioning 

natural lens of an eye and replace it with a synthetic lens. It is medically 

impossible to perform more than one cataract surgery on the same eye 

because an eye’s natural lens will never grow back. Medically impossible 

services should be denied as not being reasonable and necessary. 

Wet AMD. Medicare paid approximately $2.2 billion in 2012 for services 

that screen for, diagnose, evaluate, or treat wet AMD. This disease is the 

leading cause of severe vision loss in people over age 65 in the United 

States. Medicare covers several services that diagnose or evaluate wet 

AMD, including fluorescein angiographies,6 but it does not have any 

national requirements that place specific limits on these services. 

However, some claims processing contractors have LCDs limiting the 

number of these diagnostic or evaluation services for which a provider 

may bill annually.7 

Medicare also covers several services that treat wet AMD, with the most 

common being the injection of the biologic Lucentis, which goes directly 

into the eye. In 2012, Medicare paid an average of $2,013 for each full 

Lucentis injection. Medicare does not have a national requirement 

specifically limiting this injection; however, the claims processing 

contractors for six jurisdictions have LCDs specifying that Lucentis 

____________________________________________________________ 

4

 National Institutes of Health, “Leading Causes of Blindness,” NIH Medline Plus. 

Volume 3, Number 3, Summer 2008.
 5

 CMS, National Coverage Determinations Manual, Pub. No. 100-03, ch. 1, § 10.1. 

Claims for additional exams are denied as not reasonable and necessary unless there is an 

additional diagnosis and the medical need for the additional exam is fully documented.
 6

 Fluorescein angiography is an eye test that uses a special dye and camera to look at 

blood flow in the retina and choroid, the two layers in the back of the eye. 7

 For example, L27584 states that fluorescein angiographies are considered medically 

necessary no more than nine times per eye per year and that claims exceeding this 

frequency will be suspended and reviewed for medical necessity. CMS, Local Coverage 

Determination (LCD) for Ophthalmic Angiography (Fluorescein and Indocyanine Green) 

(L27584), Palmetto GBA. These requirements indicate that the additional exams are 

denied as not reasonable and necessary unless the medical need for the additional exams 

is fully documented. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 2 
 

 

 

 

 

 

 

injections are not covered more frequently than once per month per eye.8 

To support the monthly limit on Lucentis injections, these LCDs cite the 

Food and Drug Administration (FDA)-approved dosing guidelines on the 

biologic’s label. The FDA guidelines state that injections should be 

administered between once monthly and once every 3 months.9 

Another service that treats wet AMD, ocular photodynamic therapy, is a 

process with two steps. These steps are billed separately, but they must be 

performed within 30 minutes of one another.10 Because both steps must 

be performed for the procedure to work properly, Medicare has a national 

requirement stating that it covers each step only when both steps are 

performed on the same date.11 

Glaucoma. Medicare paid approximately $1.3 billion in 2012 for services 

that screen for, diagnose, evaluate, or treat glaucoma, which is a leading 

cause of blindness in the United States.12 A national requirement states 

that Medicare covers either of two types of screening services once every 

12 months for beneficiaries at high risk for glaucoma.13 

Medicare Claims Processing Contractors 

CMS uses contractors to process and pay for services provided to 

beneficiaries in the Medicare program.14 The scope of each claims 

processing contract covers a specific jurisdiction (e.g., States) and one or 

more claim type. Claim types include Part A claims, Part B claims, 

durable medical equipment, and home health and hospice claims. Some of 

these contractors are awarded and administer multiple contracts.

 ____________________________________________________________ 

8

 Three claims processing contractors, responsible for six jurisdictions, have a total of
 

three LCDs specifying limitations on Lucentis injections. The LCDs indicate that the 

additional Lucentis injections are denied as not reasonable and necessary unless the 

medical need for the additional injections is fully documented. 

9

 FDA, Lucentis® (ranibizumab injection) Intravitreal Injection, Initial US Approval: 

2006. US BLA (BL125156) Ranibizumab Injection. For example, CMS, Local 

Coverage Determination (LCD) for Ranibizumab (Lucentis) (L29266), First Coast 

Service Options, Inc., June 14, 2011. 

10 FDA, VisudyneTM (verteporfin for injection) US package insert, April 7, 2000. 11 CMS, National Coverage Determinations Manual, Pub. No. 100-03, ch. 1, § 80.2. 12 National Institutes of Health, “Leading Causes of Blindness,” NIH Medline Plus. 

Volume 3, Number 3, Summer 2008.
 13 CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 15. § 280.1. 14 CMS has completed the process of replacing all other claims processing contractor
 

types, which included fiscal intermediaries, carriers, and regional home health
 

intermediaries, with Medicare Administrative Contractors (MAC). Section 911 of the
 

Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 

108-173, expanded CMS’s authority to contract with entities such as MACs. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 3 
 

 

 

 

 

 

 

The primary goal of each claim processing contractor is to appropriately 

process and pay Medicare claims.15 Because of the large number of claims 

that contractors must process, they cannot manually review every claim 

submitted by providers. Instead, contractors take two main types of 

actions to prevent inappropriate payments: (1) medical review of selected 

claims and (2) provider outreach and education. Medical review actions 

include identifying claims for review and determining whether they meet 

Medicare coverage criteria, implementing automated prepayment edits,16 

and developing local coverage requirements. Provider outreach and 

education is provided through a variety of media, such as articles, 

conference calls, and Web-based training.17 

Related OIG Work 

OIG has previously found vulnerabilities in Medicare payments for 

ophthalmology services.18 For example, OIG found that Medicare 

inappropriately paid $97.6 million in 2005 for evaluation and management 

services that were paid separately from global eye surgeries.19 

Other OIG work has found that Medicare paid providers substantially 

more for treating wet AMD with the expensive biologic Lucentis instead 

of other biologic treatments that are similarly effective.20 For example, 

OIG found that in 2008 and 2009, Medicare Part B would have saved 

$1.1 billion if it had reimbursed all Lucentis injections at the rate of a 

cheaper alternative biologic.21 

Additionally, OIG is currently conducting a study to identify and describe 

providers with questionable billing for ophthalmology services from

 ____________________________________________________________ 

15 CMS, Medicare Fee-for-Service 2011 Improper Payments Report, p. 6. Accessed at 

http://www.cms.gov/Research-Statistics-Data-and-Systems/MonitoringPrograms/CERT/Downloads/2011-Medicare-FFS-Improper-Payment-Report-.pdf on 

September 3, 2014. 

16 “Edits” are coded into the claims payment system to automatically deny all or part of a 

claim or suspend all or part of a claim for manual review. CMS, Medicare Program 

Integrity Manual, ch. 3. § 3.2, and ch. 7. § 7.2.8.1. 17 CMS, Medicare Contractor Beneficiary and Provider Communications Manual, 

ch. 6. § 20. 

18 OIG, Fletcher Allen Health Care Did Not Always Bill Correctly for Evaluation and
 

Management Services Related to Eye Injection Procedures, A-01-11-00515, May 2012; 

OIG, Prevalence and Qualifications of Nonphysicians Who Performed Medicare 

Physician Services, OEI-09-06-00430, August 2009. 

19 OIG, Nationwide Review of Evaluation and Management Services Included in Eye and
 

Ocular Adnexa Global Surgery Fees for Calendar Year 2005, A-05-07-00077, 

April 2009. 

20 OIG, Medicare Payments for Drugs Used to Treat Wet Age-Related Macular 

Degeneration, OEI-03-10-00360, April 2012. 21 OIG, Review of Medicare Part B Avastin and Lucentis Treatments for Age-Related 

Macular Degeneration, A-01-10-00514, September 2011. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 4 
 

 

 

 

2012.22 The report will also determine the extent to which Lucentis was 

billed to Medicare in 2012. 

METHODOLOGY 

Data Collection and Analysis 

We analyzed claims data for ophthalmology services to identify those that 

Medicare potentially paid inappropriately based on national or local 

coverage requirements. Each Medicare-allowed amount is composed of 

the Medicare Part B responsibility (80 percent) and the beneficiary’s 

responsibility (20 percent).23 Throughout this report, when we refer to the 

dollar amount that Medicare “paid” for each service, we are referencing 

the Medicare-allowed amount for each service. 

We analyzed 100 percent of paid claims for ophthalmology services in 

2012 from CMS’s National Claims History (NCH) Carrier File. This 

included approximately 49 million paid claims billed by 46,456 providers 

in 2012. Additionally, because Medicare covers glaucoma screening 

services only once every 12 months for beneficiaries at high risk for 

glaucoma, we analyzed 100 percent of paid claims for glaucoma screening 

exams in 2011 from NCH. This included 24,772 paid claims billed by 

847 providers in 2011. 

National Requirements. To determine which claims were potentially paid 

inappropriately, according to four national requirements, we analyzed all 

ophthalmology claims data to identify those for: 

(1) additional cataract diagnostic tests billed as being performed in 2012, 

for beneficiaries whose only diagnosis was cataracts and who had 

already had cataract diagnostic tests in 2012; 

(2) additional cataract surgeries billed for the same eye in the same year; 

(3) ocular photodynamic therapy to treat wet AMD in which both steps of 

the treatment were not billed as being performed on the same date; or 

(4) glaucoma screening tests billed for beneficiaries who had already been 

screened for glaucoma within the previous 12 months (including 

2011 claims, as needed). 

We determined the number of claims billed with these characteristics, and 

we calculated the total amount that Medicare paid each provider for claims 

with these characteristics. We also determined which contractors paid 

claims with these characteristics. 

____________________________________________________________ 

22 OEI-04-12-00280, in progress. 

23 Medicare Part B also required a deductible of $99.90 per month in 2012. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 5 
 

 

 

Local Coverage Requirements. We first reviewed claims processing 

contractors’ LCDs to identify requirements regarding services that screen 

for, diagnose, evaluate, or treat cataracts, wet AMD, and glaucoma. We 

identified 21 LCDs, all of which concerned services related to wet AMD.24 

For each of these LCDs, we identified the unique limits stated in the LCD. 

For example, some LCDs allowed up to four fluorescein angiographies per 

eye per year, while others allowed up to nine. We also identified the dates 

when the LCDs were active, the contractor jurisdictions that were using 

those LCDs, and the providers in those jurisdictions. 

To determine which claims were potentially paid inappropriately, 

according to local coverage requirements, we limited our analysis to only 

those claims to which the LCDs applied.25 We identified claims with these 

characteristics: 

1) Lucentis injections to treat wet AMD that were billed more frequently 

than the LCD-established limits (28 days), or 

2) tests to diagnose wet AMD that were billed more frequently than 

LCD-established limits. 

We determined the number of claims billed with these characteristics, and 

we calculated the total amount that Medicare paid each provider for claims 

with these characteristics. We also determined which contractors paid each 

of these claims. 

Limitations 

We did not review medical records for any claims in this report. Some 

claims for cataract diagnostic exams, wet AMD diagnostic exams, or 

Lucentis injections may have had documentation supporting the need for 

these procedures and, therefore, would be allowable by the national or 

local coverage requirement. 

Standards 

This study was conducted in accordance with the Quality Standards for 

Inspection and Evaluation issued by the Council of the Inspectors General 

on Integrity and Efficiency. 

____________________________________________________________ 

24 See Appendix A for the list of 21 LCDs and the dollar amount of claims that Medicare 

potentially paid inappropriately. 

25 OEI-04-12-00280, in progress, will determine the extent to which providers bill 

unusually high for Lucentis injections and tests to diagnose wet AMD in jurisdictions 

without these LCDs. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 6 
 

 

FINDINGS 

Medicare paid $22 million for potentially inappropriate 

ophthalmology claims in 2012 

According to national and local coverage requirements, Medicare paid 

approximately $22 million for potentially inappropriate ophthalmology 

claims in 2012. Medicare paid these claims despite national or local 

coverage requirements that were designed to prevent their payment. 

Overall, two of eleven contractors paid a disproportionate amount of this 

$22 million for ophthalmology claims. 

In total, Medicare paid 46,456 providers for all services to screen for, 

diagnose, evaluate, or treat cataracts, wet AMD, and glaucoma in 2012. 

Almost all of these providers received either no potentially inappropriate 

Medicare payments (74 percent) or received less than $9,999 in potentially 

inappropriate Medicare payments (25.5 percent). Table 1 provides the 

number and percentage of providers by dollar ranges of potentially 

inappropriate Medicare payments for ophthalmology claims. 

Table 1. Number of Providers With Dollar Ranges of Potentially Inappropriate Medicare Payments 

for Ophthalmology Claims, 2012 

Dollar Ranges of Payments 

for Claims Number of Providers Percentage of Providers 

$0 34,383 74.0% 

$1–$999 7,677 16.5% 

$1,000–$9,999 4,159 9.0% 

$10,000–$99,999 225 0.5% 

$100,000 or more 12 <0.1%

 Total 46,456 100% 

Source: OIG analysis of NCH file. 

For example, 12 providers received between $100,000 and $1.5 million 

for ophthalmology claims that were potentially inappropriate in 2012. 

Among these 12 providers, all received payments that local coverage 

requirements were designed to prevent, but only 1 received payments that 

national requirements were designed to prevent. Fourteen percent 

($3 million of $22.3 million) of the total amount Medicare potentially paid 

inappropriately was for claims submitted by these 12 providers. 

Medicare paid $14 million for ophthalmology claims that were 

potentially inappropriate according to national requirements 

Medicare paid $14.3 million in 2012 for 68,837 ophthalmology claims 

despite national requirements designed to prevent payment for these 

claims. These four national requirements concerned ophthalmology 

services that screen for, diagnose, evaluate, or treat cataracts, wet AMD, 

and glaucoma in 2012. Table 2 shows the payment amount, number of 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 7 
 

 

 

 

claims, and number of providers by the four national requirements we 

analyzed. 

Table 2. Potentially Inappropriate Medicare Payments According to National Requirements, 2012 

National Requirement Medicare 

Payment* 

Number of 

Claims 

Number of 

Providers** 

Claims for additional cataract surgeries for the same 

eye in 2012 $8,564,392 10,560 4,548 

Claims for additional cataract diagnostic tests for 

beneficiaries whose only diagnosis was cataracts and 

who had already had cataract diagnostic tests in 2012 

$5,223,294 52,547 8,501 

Claims for glaucoma screening tests for beneficiaries 

more than once within a 12-month period $322,175 5,055 266 

Claims for ocular photodynamic therapy to treat wet 

AMD in which both steps of treatment were not billed 

as performed on the same day in 2012 

$228,755 675 269 

 Total $14,338,012 68,837 11,168 

Source: OIG analysis of 2012 NCH file. 

*Column does not sum to total due to rounding. 

**Column does not sum to total because some providers had potentially inappropriate claims across multiple national requirements.
 

It is medically impossible to have more than one cataract surgery per eye 

because the initial surgery removes the eye’s lens. However, Medicare 

paid approximately $8.6 million for 10,560 cataract surgeries on eyes that 

already had a cataract surgery in 2012. Ninety-three percent of providers 

(4,221 of 4,548) billing for additional cataract surgeries on the same eye in 

2012 did so for 5 or fewer claims. However, 7 providers billed for 20 or 

more cataract surgeries for eyes that already had cataracts removed in 

2012, and Medicare paid these 7 providers a combined total of $172,340 

for such surgeries. This includes one provider whom Medicare paid 

$59,455 for 69 surgeries—the most of any provider—on eyes that already 

had cataracts removed. 

Also, Medicare does not routinely cover more than one cataract diagnostic 

test for patients whose only diagnosis is cataracts. However, Medicare 

paid approximately $5.2 million for 52,547 cataract diagnostic exams on 

beneficiaries whose only diagnosis was cataracts and who had already had 

a cataract diagnostic exam and scan in 2012. The majority of providers 

(7,930 of 8,501) that billed for this type of exam did so for fewer than 20 

diagnostic claims in 2012. However, Medicare paid one provider $20,108 

for 260 additional cataract diagnostic services, the most of any provider. 

Medicare paid $8 million for ophthalmology claims that were 

potentially inappropriate according to local coverage 

requirements 

Medicare paid $7.9 million in 2012 for 25,583 ophthalmology claims 

despite the presence of 21 LCDs, which stated that these claims should not 

have been paid. These LCDs covered two types of coverage requirements 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 8 
 

 

 

regarding services that diagnose or treat wet AMD. Table 3 shows the 

payment amount, number of claims, and number of providers by the two 

requirements we analyzed. Also, see Appendixes A and B for the number 

and dollar amount of claims paid beyond the limitations established in 

these 21 LCDs. 

Table 3. Potentially Inappropriate Medicare Payments According to Local Coverage Requirements, 2012 

Local Coverage Requirement Medicare 

Payment* 

Number of 

Claims 

Number of 

Providers* 

Claims for Lucentis injections more frequently than 

contractor limits permitted in 2012 $4,123,516 2,019 271 

Claims for tests to diagnose wet AMD more frequently 

than contractor limits permitted in 2012 $3,822,131 23,564 1,166

 Total $7,945,647 25,583 1,354 

Source: OIG analysis of 2012 NCH file. 

*Column does not sum to total because some providers potentially inappropriate claims across multiple local coverage requirements. 

Three of the twenty-one LCDs used the FDA-approved dosing guidelines 

to establish every 28 days per eye as the highest frequency at which 

providers can bill for Lucentis injections to treat wet AMD. However, 

Medicare paid providers in areas covered by these LCDs approximately 

$4.1 million for 2,019 Lucentis injections that were billed for as having 

been performed sooner than 28 days from a prior Lucentis injection on the 

same eye. Medicare paid a combined total of $1 million to six providers 

for Lucentis injections exceeding this LCD limit. This includes one 

provider whom Medicare paid $253,093 for 127 Lucentis injections that 

were billed in excess of this limit in 2012. Additionally, Medicare paid a 

total of $267,834 to six individual providers—who together operated a 

single surgical group—for Lucentis injections that exceeded this limit. 

Medicare paid each of these providers between $20,000 and $105,000 for 

such Lucentis injections. 

The remaining 18 of the 21 LCDs established limits on the frequency of 

billing for tests to diagnose wet AMD. Overall, Medicare paid 

approximately $3.8 million for 23,564 claims beyond the limitations 

established by these LCDs. These 18 LCDs established 9 different 

limitations beyond which the claims processing contractors determined 

that Medicare should not cover diagnostic tests without additional 

supporting documentation.26 For example, some LCDs limit the number 

of fluorescein angiographies in a calendar year to four per beneficiary 

diagnosed with wet AMD. However, Medicare paid $1.4 million to 

1 provider for more than 4 fluorescein angiographies for each of 516 such 

____________________________________________________________ 

26 For these nine different limitations, see “Specific Limitation” column in the table in 

Appendix B. Depending on the procedure type and the LCD, these limitations range 

from 2 procedures allowed per eye annually to 12 procedures per eye annually. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 9 
 

 

beneficiaries in 2012, the highest dollar amount of potentially 

inappropriate claims paid to any provider. On average, this provider billed 

for 14 fluorescein angiographies for each of its beneficiaries diagnosed 

with wet AMD in 2012. However, the majority of providers (1,034 of 

1,166) submitting at least one potentially inappropriate claim to diagnose 

wet AMD did so for 20 or fewer total claims in 2012. 

Two of eleven contractors paid a disproportionate amount of 

potentially inappropriate Medicare payments 

Overall, Medicare paid a total of $22.3 million for 94,420 ophthalmology 

claims that were potentially inappropriate according to national and local 

coverage requirements. Two Medicare contractors paid $9 million for 

27,851 of these ophthalmology claims. This amounts to 40 percent of all 

potentially inappropriate payments for ophthalmology claims. However, 

these contractors paid only about a quarter of all payments for 

ophthalmology claims in 2012. See Table 4 for the dollar amount of 

ophthalmology claims that were potentially paid inappropriately and the 

total dollar amount of ophthalmology claims paid by each contractor. 

Table 4. Dollar Amount of Ophthalmology Claims That Were Potentially Paid Inappropriately According to National 

and Local Coverage Requirements, by Contractor, 2012 

Contractor 

Potentially 

Inappropriate 

Medicare Payments 

Percentage of 

Potentially 

Inappropriate 

Medicare Payments 

Overall Medicare 

Payments 

Percentage of 

Overall Medicare 

Payments 

Wisconsin Physicians 

Services $5.7 million 26% $1.3 billion 16% 

First Coast Service Options $3.3 million 15% $0.8 billion 10% 

Palmetto GBA $3.1 million 14% $1.5 billion 19% 

Cahaba GBA $2.3 million 11% $0.6 billion 7% 

Novitas Solutions $2.2 million 10% $1.2 billion 15% 

National Government 

Services $1.4 million 6% $0.8 billion 9% 

Trailblazer Health Enterprises $1.4 million 6% $0.6 billion 8% 

CGS Administrators $1.2 million 5% $0.3 billion 4% 

Noridian Administrative 

Services $1.0 million 5% $0.6 billion 7% 

NHIC Corporation $0.5 million 2% $0.3 billion 4% 

Pinnacle Solutions $0.2 million 1% $0.1 billion 1% 

Total* $22.3 million 100% $8.2 billion 100% 

Source: OIG analysis of 2012 NCH file. 

*Columns may not sum to total due to rounding. 

The two contractors that paid the highest dollar amount for potentially 

inappropriate ophthalmology claims each had a strong association with a 

different local coverage requirement. For example, two-thirds 

($2.2 million of $3.3 million) of the dollars that First Coast Service 

Options paid for potentially inappropriate ophthalmology claims were for 

fluorescein angiographies billed for more than 4 times per beneficiary in 

2012. Also, approximately 55 percent ($3.2 million of $5.7 million) of the 

dollars that Wisconsin Physicians Services paid for potentially 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 10 
 

inappropriate ophthalmology claims were for Lucentis injections billed for 

more frequently than 28 days on each eye. Therefore, these two 

contractors may not have appropriately enforced their own requirements to 

prevent these payments. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 11 
 

 

 

CONCLUSION AND RECOMMENDATIONS 

Medicare paid approximately $8.2 billion in 2012 to screen for, diagnose, 

evaluate, or treat cataracts, wet age-related macular degeneration 

(wet AMD), and glaucoma. Medicare uses a combination of national and 

local coverage requirements to determine whether it will cover services for 

these conditions. However, recent investigations have found that some 

ophthalmology services for these conditions are vulnerable to fraud, 

waste, and/or abuse. 

Medicare paid approximately $22 million for 94,420 ophthalmology 

claims in 2012 that were potentially inappropriate according to national 

and local coverage requirements. However, we did not review the medical 

records for any claims to determine if exceptions to the requirements were 

documented and appropriate. Additionally, two of eleven Medicare 

contractors paid a disproportionate amount of the potentially inappropriate 

Medicare payments. Our results demonstrate vulnerabilities in Medicare’s 

oversight and enforcement of its national and local coverage requirements. 

Therefore, we recommend that CMS: 

Implement additional claims processing edits or improve 

existing edits to ensure claims are paid appropriately 

CMS should ensure that it has claims processing edits to appropriately 

enforce national requirements. Specifically, these edits should prevent 

payment for cataract surgeries on eyes of beneficiaries that have already 

had their natural lens removed. They also should prevent payment for 

ocular photodynamic therapy claims in which both steps of treatment were 

not billed as performed on the same day. Additionally, these edits should 

identify certain claims and flag them for further review. This includes 

claims for (1) additional cataract diagnostic tests for beneficiaries whose 

only diagnosis was cataracts and who had already had cataract diagnostic 

tests in the calendar year and (2) claims for glaucoma screening tests for 

beneficiaries that are submitted more than once within a 12-month period. 

Further, CMS should instruct claims processing contractors to implement 

claims processing edits or improve existing edits to appropriately enforce 

LCDs. These edits should identify certain claims and flag them for further 

review. This includes claims for (1) Lucentis injections that are billed 

sooner than 28 days after a prior injection on the same eye and (2) claims 

for tests to diagnose wet AMD more frequently than contractor limits 

permit. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 12 
 

 

 

Determine the appropriateness of ophthalmology claims 

identified in this report and take appropriate action 

In a separate memorandum, we will refer to CMS for appropriate action 

the claims that we identified as potentially inappropriate. CMS and/or its 

contractors should assess these claims and if warranted, review medical 

records. After this assessment, CMS should determine and take an 

appropriate course of action. Appropriate actions could include, but are 

not limited to: (1) recoupment of any inappropriate payments; 

(2) provider education on how to properly bill for ophthalmology services; 

or (3) no action, if billing is determined to be appropriate. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 13 
 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

CMS concurred with both of our recommendations. CMS noted that it is 

pursuing a comprehensive strategy to combat fraud, waste, and abuse in 

Medicare. This includes educating providers on appropriate billing for 

services and improving its centralized portal that provides contractors and 

law enforcement with access to Medicare data and analytic tools. 

CMS concurred with our first recommendation and described its efforts to 

implement additional or improve existing claims processing edits. CMS 

stated that it implemented Medically Unlikely Edits regarding 

ophthalmology services in April 2013 and that it will consider developing 

edits to address the additional potential vulnerabilities identified in this 

report. CMS also stated that it will work to enhance the current claims 

processing edits to prevent inappropriate payment for claims. CMS added 

that it will educate its contractors of the potential vulnerabilities identified 

in the report and encourage them to flag these claims for medical review. 

CMS concurred with our second recommendation and described its plans 

to determine the potential return on investment from a medical record 

review of the claims provided. Based on the analysis and contractor 

resources, CMS will determine an appropriate number of claims to review. 

Then, it will take action based on the results of that review. 

We support CMS’s efforts to address the potential vulnerabilities 

identified in this report. The full text of CMS’s comments is provided in 

Appendix C. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 14 
 

 

 

APPENDIX A 

The Numbers and Dollar Amounts of Claims Paid Beyond 

Limitations Established in Each LCD, 2012 

LCD State(s) Medicare Payment* 

Number of 

Providers* Number of Claims* 

LCD 

Number 

1 IA, IL, IN, KS, MI, MN, MO, NE, WI $3,157,914 183 1,535 L32013 

2 FL $2,183,876 56 9,828 L29177 

3 DC, DE, MD, NJ, PA $877,662 117 5,016 L27497 

4 AL, GA, TN $868,065 74 437 L30555 

5 KY, OH $341,367 122 2,003 L31882 

6 CT, NY $250,171 173 3,388 L25466 

7 KY, OH $126,421 290 2,297 L31842 

8 AR, CO, LA, MS, NM, OK, TX $97,537 16 47 L32642 

9 IA, IL, KS, MN, MO, NE, WI $38,806 440 948 L29971 

10 FL $3,579 54 80 L29276 

11 PR, VI $203 1 2 L29429 

12 FL $46 2 2 L28982 

13 AS, CA, GU, HI, MP, NV 0 0 0 L27584 

14 CT, NY 0 0 0 L28488 

15 DC, DE, MD, NJ, PA 0 0 0 L27479 

16 FL 0 0 0 L28843 

17 PR, VI 0 0 0 L29473 

18 KY, OH 0 0 0 L31897 

19 NC, SC, VA, WV 0 0 0 L31557 

20 PR, VI 0 0 0 L28876 

21 PR, VI 0 0 0 L29105

 Total $7,945,647 1,354 25,583 

Source: OIG analysis of 2012 NCH file and LCDs in Medicare Coverage Database.
 

*Column does not sum to total because some providers had potentially inappropriate claims according to multiple LCDs. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 15 
 

 

APPENDIX B 

The Number and Dollar Amount of Claims Paid Beyond Each 

of the Limitations Established in LCDs, 2012 

Type of 

Limitation Specific Limitation 

Jurisdiction 

Having 

Limitation 

Medicare 

Payment* 

Number of 

Providers * 

Number of 

Claims* 

Limitation to 

prevent 

payment for 

claims 

indicating that 

providers billed 

for beneficiaries 

to have tests to 

diagnose wet 

AMD more 

frequently than 

contractorestablished 

limits 

HCPCS code 92235 is not allowed 

more than 4 times per eye per year 

for patients diagnosed with wet 

AMD.27 J09, J12 $2,991,705 142 14,561 

HCPCS code 92250 is not allowed 

more than 2 times per eye per year. J13, J15 $376,139 463 5,667 

HCPCS codes 92235 and 92240 

are not allowed within 30 days of 

one another on the same eye, 

unless the patient has a second 

diagnosis in addition to wet AMD. 

However, the second diagnosis 

cannot be diabetic retinopathy. J01, J11, J15 $341,367 122 2,003 

HCPCS codes 92235 and 92240 

are not allowed within 30 days of 

one another on the same eye, 

unless they are provided on the 

same day. J12 $70,333 48 286 

HCPCS codes 92133 and 92134 

are not allowed within 28 days of 

one another on the same eye for 

patients diagnosed with retinal 

diseases (including wet AMD). J05, J06 $38,806 440 948 

HCPCS codes 92133 and 92134 

are not allowed on the same day for 

the same eye. J09 $3,625 56 82 

HCPCS codes 92225 and 92226 

are not allowed more than 12 times 

per eye per year for patients 

diagnosed with wet AMD. J13, J15 $453 2 18 

HCPCS codes 92235 and 92240 

are not allowed more than 9 times 

per eye per year. J01, J11, J15 - - -

HCPCS code 92134 is not allowed 

more than 1 time per eye per 

month. J13, J15 - - -

Limitation to 

prevent 

payment for 

claims 

indicating that 

Lucentis 

injections were 

provided more 

often than 

contractorestablished 

limits 

HCPCS code J2778 is not allowed 

more often than every 28 days per 

eye diagnosed with wet AMD. 

J04, J05, J06, 

J07, J08, J10 $4,123,516 271 2,019

 Total $7,945,647 1,354 25,583 

Source: OIG analysis of 2012 NCH file and LCDs in Medicare Coverage Database.
 

*Column does not sum to total because some providers had potentially inappropriate claims according to multiple LCDs. 

____________________________________________________________ 

27 Medicare Part B services are classified and paid using Healthcare Common Procedure 

Coding System (HCPCS) codes. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 16 
APPENDIXC 

Agency Comments 

/~~ l-4-	DEPARTMENT OF HEAL'IH Centers for Medicare & Medicaid Services & HUMAN SERVICES 

Administrator 

Washington, DC 20201 

DATE: NOV -7 2014

TO: 	 Daniel R. Levinson 


Inspector General 


FROM: 	 Marilyn Tavenner 


Administrator 


SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Medicare Paid $22 Million in 

2012 for Potentially Inappropriate Ophthalmology Claims," (OEI-04-12-00281) 

The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 

comment on this draft report. CMS-is committed to eliminating fraud, waste, and abuse in 

Medicare. 

To combat fraud, waste, and abuse in Medicare, CMS is pursuing a comprehensive strategy 

comprised ofseveral initiatives. Specific to ophthalmology claims, CMS has released 

educational materials on ophthalmological benefits to educate physicians and other providers on 

the coverage and billing requirements for ophthalmological services. The published materials 

specify that glaucoma screening is covered annually and that providers may only bill for cataract 

removal once per eye. 

CMS is continually improving and updating its fraud, waste, and abuse prevention efforts. CMS 

has used authority granted by the Affordable Care Act to establish temporary moratoria on the 

enrollment ofhigh-risk providers in fraud "hot spots." We have also continued making 

improvements and changes to One Program Integrity (One PI), CMS' centralized portal that 

provides CMS contractors and law enforcement with access to Medicare data and analytic tools 

to review the data. In addition, CMS has implemented the Fraud Prevention System (FPS), 

which applies predictive analytic technology on claims prior to payment to identify aberrant and 

suspicious billing behavior. 

The OIG's recommendations and CMS' responses to those recommendations are discussed 

below. 

OIG Recommendation 

Implement additional claims processing edits or improve existing edits to ensure claims are paid 

appropriately 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 17 
 

APPENDIX C 

Agency Comments (Continued) 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 18 
 

ACKNOWLEDGMENTS 

This report was prepared under the direction of Dwayne Grant, Regional 

Inspector General for Evaluation and Inspections in the Atlanta regional 

office, and Jaime Stewart, Deputy Regional Inspector General. 

Evan Godfrey served as the lead analyst for this study. Central office staff 

who provided support include: Clarence Arnold, Scott Horning, Scott 

Manley, Christine Moritz, and Dave Tawes. 

Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims (OEI-04-12-00281) 19 
Office of Inspector General

http://oig.hhs.gov 

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 the following operating components: 

Office of Audit Services 

The Office of Audit Services (OAS) provides 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. These assessments help reduce waste, abuse, and 

mismanagement and promote economy and efficiency throughout HHS. 

Office of Evaluation and Inspections 

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 

HHS, Congress, and the public with timely, useful, and reliable information on significant 

issues. These evaluations focus on preventing fraud, waste, or abuse and promoting 

economy, efficiency, and effectiveness of departmental programs. To promote impact, OEI 

reports also present practical recommendations for improving program operations. 

Office of Investigations 

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 

of fraud and misconduct related to HHS programs, operations, and beneficiaries. With 

investigators working in all 50 States and the District of Columbia, OI utilizes its resources 

by actively coordinating with the Department of Justice and other Federal, State, and local 

law enforcement authorities. The investigative efforts of OI often lead to criminal 

convictions, administrative sanctions, and/or civil monetary penalties. 

Office of Counsel to the Inspector General 

The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

OIG, rendering advice and opinions on HHS programs and operations and providing all 

legal support for OIG’s internal operations. OCIG represents OIG in all civil and 

administrative fraud and abuse cases involving HHS programs, including False Claims Act, 

program exclusion, and civil monetary penalty cases. In connection with these cases, OCIG 

also negotiates and monitors corporate integrity agreements. OCIG renders advisory 

opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG 

enforcement authorities.