OIG Reports on Overpayments Sparks Discussion

This Month

The Office of the Inspector General made public the report “Medicare Improperly Paid Providers for Non-Emergency Ambulance Transports to Destinations Not Covered by Medicare” (View the report) this month.

Oig Reports Overpayments Sparks DiscussionThe OIG took a look at non-emergency ambulance transport claims paid by Medicare between 2014 and 2016. This time the review focused on transports to what the Centers for Medicare and Medicaid Services labels non-covered destinations. Specifically, the transport codes for ALS and BLS non-emergency along with the accompanying ground mileage codes were dissected.

Over $8 million!

The study concluded by disclosing that a total of $8,633,940 was improperly paid on claims amounting to 62,642 claim item lines.

Over half of the claims that were paid improperly where transports to diagnostic or therapeutic sites other than a hospital or physician’s office and that did not originate at a skilled nursing facility (SNF). An additional one-third were paid improperly for transports to residences or assisted living facilities that did not meet the origin/destination rules.

Modifier Review

When billing ambulance transports, assuring the origin and destination modifiers are correctly applied is an absolute must to avoid submitting errant claims for payment. Since we all use computer programs to bill, it is always a risk when entering a facility into the system that the applied modifier that identifies the facility could be coded incorrectly and then populated throughout all future claims.

One simple error when entering the facility either by true human error or lack of research and control of the process for entering a facility could magnify the systems error across hundreds if not thousands of claims.

Research and Know

It is important to research and know the exact purpose of the facility when entering and applying the origin/destination modifier that will generate when picking the facility for the claim.

As a reminder, the origin/destination modifiers for use are…

D- Diagnostic or therapeutic site (not a doctor’s office or hospital)
E- Residential, domiciliary, custodial facility, nursing other than a Skilled Nursing Facility
G- Hospital based dialysis facility
H- Hospital
I – Site of Transfer (e.g. airport, ferry, helicopter pad) between modes of ambulance transport
J- Non-Hospital based dialysis facility
N- Skilled Nursing Facility (SNF)
P- Physician’s Office/Clinic
R- Residence S- Scene of Accident or Acute Event
X- Destination Code Only (Intermediate stop at a physician’s office en route to a hospital to stabilize a patient)

The tricky part about applying these necessary modifiers comes when it’s not clear what the origin and destination are.

Consider the Possibilities

Multi-purpose facilities have been built today to accommodate a wide range of residents. It’s not uncommon to have one facility at one central address contain separate parts with varying housing types.

XYZ Living Campus may have a SNF wing, another area that is designated as assisted living and yet a third part, on the same physical grounds and with the same address, that is an independent living area for senior residents.

Here again, properly identifying these various functions in the billing software set-up is important, but even more important is for the transport crews on the street to document specifically where they picked-up and dropped-off the patient.

The same principle applies to hospitals with various dedicated floors for multiple purposes. Even doctor’s offices can be housed within a facility requiring a separate origin/destination modifier versus the inpatient area which requires yet another.

These are just some of many possible examples.

What’s Next

The OIG report chided CMS for not requiring the Medicare Administrative Contractors (MACs) to implement nationwide prepayment edits in their systems to filter out and disallow payments for non-emergency ambulance transports to destinations not covered by Medicare.

So, that will change.

Secondly, the OIG charged CMS to recover the portion that is still recoverable of the $8.6 million dollars in improper payments identified in the report. It also charged CMS to instruct the MACs to notify ambulance providers and suppliers of improper payments made to them that are outside of the re-opening period so they can exercise their “reasonable diligence to investigate and return any identified improper payments in accordance with the existing 60-day rule for returning payments.

Additionally, the OIG strongly recommended that CMS direct the MACs to review claims for non-emergency transports that followed the 4-year audit study period and recover any improper payments identified.


Now’s the time to review your systems and processes, especially as it relates to origin and destination modifiers and their application. Of course, assuring that you are using a reputable third-party billing contractor who has the appropriate knowledge and controls in place to prevent mis-application of these modifiers is always the best course of action.

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