News Release

Study finds Medicare overbilling may be caused by government's faulty reimbursement

System prone to human error

Peer-Reviewed Publication

American College of Emergency Physicians

Washington, DC--In the midst of an ongoing crackdown on health care providers for allegedly overbilling federal health care programs, a study in the September 2002 Annals of Emergency Medicine finds the government's coding system used to determine physicians' Medicare payments is an unvalidated process prone to errors. (Reliability of Assigning Correct Current Procedural Terminology--4 E/M Codes)

"The American College of Emergency Physicians strongly supports government efforts to remove fraudulent practices from the Medicare program," said Michael L. Carius, MD, president of ACEP. "But the truth is that most of what the government calls fraud and abuse results from simple billing errors and the problems inherent in complying with Medicare's more than 100,000 pages of rules and supporting documents."

Nearly 9,000 Current Procedural Terminology (CPT) codes are used in the medical field to code medical procedures for Medicare claims. The codes describe the extent of a physician's interaction with a patient, such as obtaining the patient's medical history, performing a physical examination, and providing various levels of medical services. Each code is tied to a payment amount. The more complex the interaction between the patient and physician, the higher the code and level of payment.

This study focuses on the five evaluation and management (E/M) codes that represent 70 percent of the codes emergency physicians use to bill for the services they provide. E/M coding has received extraordinary attention by government auditors. The study's authors explain this is because most claims are billed under these codes, which represent less tangible services and have less precise definitions than other codes, opening them up to broader interpretation, and thus inviting more scrutiny.

To determine the reliability of the federal government's E/M coding system, Raymond E. Jackson, MD, and his team of investigators from William Beaumont Hospital System in Royal Oak, Mich., sent emergency department medical records to several coding specialists to determine their level of agreement in assigning codes. Two sets of charts were sent to multiple specialists at four different coding agencies (inter-agency) and a third set was sent to several coding specialists within the same coding agency (intra-agency). The records were blinded so coders were unaware of what codes others had assigned.

"This study is similar to the famous tax test that Money magazine conducted a couple of years ago," said Brent Asplin, MD, MPH, author of a related editorial in this issue. "Money sent a hypothetical family's tax return to 46 professional tax preparers and got back 46 different answers, and not a single one was correct. Dr. Jackson's team finds that the Medicare coding system is just as prone to inconsistency and disagreement, even when specialists are put to the task."

The study shows poor agreement among coding specialists on which codes they assigned to emergency department medical records. In 6 percent of the medical records, the study found no agreement at all among the four different coding agencies, and in only 15 percent of the cases did coding agencies have complete agreement.

"The current system for coding is too undecipherable and unreliable to justify the huge fines placed on health care institutions for allegedly upcoding services," said Dr. Asplin.


Annals of Emergency Medicine is the peer-reviewed journal of the American College of Emergency Physicians, a national medical organization with nearly 23,000 members. ACEP is committed to improving the quality of emergency care through continuing education, research, and public education. Headquartered in Dallas, Texas, ACEP has 53 chapters representing each state, as well as Puerto Rico and the District of Columbia, and a Government Services Chapter representing emergency physicians employed by military branches and other government agencies.

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