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Incorrect POS May Result In $1.5 Million In Overpayments

August 12, 2008:
It seems like such a simple thing to do but the Office of Inspector General has stated that 85 out of 100 claims processed by First Coast Service Options, Inc. during 2004 and 2005 could have possible place of service (POS) errors. This could result in an estimated $1.5 million in claims were paid that may have had an incorrect place of service indicated. As a result, Providers in Florida and Connecticut may be seeing a request for refund of overpayments soon.

First Coast Service Options, Inc. (First Coast) is the Part B contractor for Connecticut and Florida. The OIG analyzed a stratified random sample of 100 services selected from a population of 57,315 physician services totaling $5,030,991 that had been identified as potentially billed with incorrect place-of-service codes and paid by First Coast.

Upon review of the claims the OIG found that physicians did not always correctly code the place of service on claims submitted to First Coast and that the contractor processed and paid many of these claims. Many of the claims incorrectly indicated an office place-of-service code for services that were actually performed in outpatient hospitals or ASCs. Of these 85 incorrectly coded services, 31 did not result in overpayments but 54 resulted in overpayments totaling $2,914. By extrapolating these results, the OIG has determined that First Coast overpaid physicians $1,493,801 for incorrectly coded services provided during the 2-year period that ended December 31, 2005.

The OIG has recommended that First Coast:
  • Recover the $2,900 in overpayments for the sampled services
  • Review the OIG information provided on non-sampled services to identify which services are potentially billed with incorrect place-of-service codes and recover any overpayments
  • Reemphasize to physicians and their billing agents the importance of correctly coding the place of service
  • Work with the program safeguard contractor to develop a data match that will identify physician services at high risk for place-of-service miscoding and recover any identified overpayments

Deborah C. Hall
Clinical Technical Editor


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