Soon after the Office of Inspector General (OIG) reported that three Medicare carriers had overpaid ASC claims over a five-year period for multiple procedures in the same operative session, Nationwide Mutual Insurance Company, Blue Cross and Blue Shield of Kansas and TrailBlazer Health Enterprises decided to recoup the overpayments. The three carriers said they would use the OIG's report and their own records to confirm the number of cases, dollar amounts and providers they overpaid from 1997-2001. Here's how such overpayment can occur and what to do if your facility ever has to refund payments it received in error.

Almost always multiple procedures
Let's say Beneficiary A has three procedures at your ASC. Your facility bills for two of the procedures on one claim, and the Medicare carrier pays the claim as it should: paying the highestcost procedure at 100 percent and the second procedure at 50 percent of the rate. You bill for the third procedure on a separate claim. The carrier should reduce reimbursement by 50 percent. But the carrier's payment editor didn't recognize the procedure on the second claim as one of multiple procedures performed in the same session and pays the third procedure on the separate claim at the full surgical rate.

Regulations regarding Medicare payments for multiple surgical procedures performed in an ASC are contained in Title 42 Part 416.120 of the Code of Federal Regulations (42CFR416.120). There are three key points:

• When a surgeon performs one covered surgical procedure in an operative session, payment is based on the prospectively determined rate for that procedure.
• When more than one surgical procedure is furnished in a single operative session, payment is based on the full rate for the procedure with the highest reimbursement rate plus half of the rates for each of the other procedures.
• Since ASC facility services are subject to the Medicare Part B percent coinsurance and deductible requirements, Medicare payment is 80 percent of the prospectively determined rate, adjusted for regional wage variations. The beneficiary's coinsurance amount is 20 percent of the assigned rate.

$150,000 in overpayments
When OIG reviewed ASC facility claims Nationwide Mutual Insurance Company processed during 1997-2001, it found that the carrier overpaid 727 of the 4,165 instances (17 percent) in which facilities had split between separate claims multiple procedures provided during the same operative session. This amounted to $150,751 in overpayments. Affected ASCs must not only refund overpaid amounts to Nationwide, but they must refund excess co-pay collections to the Medicare beneficiaries themselves as well.

As a safeguard, I suggest you appoint someone on your staff to review a random sample of Medicare Explanation of Benefits (EOB) notices to ensure proper payment for multiple procedures. This process should occur in perpetuity, since there is no guarantee the problem won't resurface in the future.