EXECUTIVE SUMMARY:
The objective of this audit was to determine the extent of Medicare Part B overpayments made to physicians by TrailBlazer Health Enterprises, LLC (TrailBlazer) for billings with an incorrect place of service code. Seventy-six of 100 sampled physician services, were performed in a facility but were billed by the physicians using the “office” or other non-facility place of service codes. Based on a statistical projection, we estimate that TrailBlazer overpaid physicians $ 1,051,477 for incorrectly coded services provided during the 2-year period ended December 31, 2002. We recommended that TrailBlazer: (1) recover identified overpayments totaling $2,983; (2) work with the physician population to reassess their billings and refund estimated overpayments totaling $1,051,477; (3) educate and encourage the physicians to implement internal controls systems; (4) instruct physicians to notify their billing representatives about the importance of correctly reporting place of service codes; (5) coordinate with the Indian Health Service billing program representatives to ensure that safeguards in the new nationwide billing system under development guarantees facilities enter the correct place of service codes and that in the interim, appropriate action is taken to ensure that place of service coding is performed at the local level; and (6) educate TrailBlazer customer service personnel regarding their instructions to physicians’ representatives related to correct place of service codes. TrailBlazer officials generally agreed with the OIG findings.