Detecting Potential Over Billing in Medicare Reimbursement via Hours Worked

54 Pages Posted: 14 Mar 2016

See all articles by Hanming Fang

Hanming Fang

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Qing Gong

University of Pennsylvania - Department of Economics

Date Written: March 7, 2016

Abstract

Medicare over billing refers to the phenomenon that providers report more and/or higher intensity service codes than actually delivered to receive higher Medicare reimbursement. We propose a novel and easy-to-implement approach to detect potential over billing based on the hours worked implied by the service codes physicians submit to Medicare. Using the Medicare Part B Fee-for-Service (FFS) Physician Utilization and Payment Data in 2012 and 2013 released by the Centers for Medicare and Medicaid Services (CMS), we first construct estimates for physicians' hours spent on Medicare Part B FFS beneficiaries. Despite our deliberately conservative estimation procedure, we find that about 2,300 physicians, or 3% of those with a significant fraction of Medicare Part B FFS services, have billed Medicare over 100 hours per week. We consider this implausibly long hours. As a benchmark, the maximum hours spent on Medicare patients by physicians in National Ambulatory Medical Care Survey data are 50 hours in a week. Interestingly, we also find suggestive evidence that the coding patterns of the flagged physicians seem to be responsive to financial incentives: within code clusters with different levels of service intensity, they tend to submit more higher intensity service codes than unflagged physicians; moreover, they are more likely to do so if the marginal revenue gain from submitting mid or high-intensity codes is relatively high.

Keywords: Medicare, Over billing, Hours Worked

JEL Classification: H51, I13, I18

Suggested Citation

Fang, Hanming and Gong, Qing, Detecting Potential Over Billing in Medicare Reimbursement via Hours Worked (March 7, 2016). PIER Working Paper 16-006, Available at SSRN: https://ssrn.com/abstract=2747152 or http://dx.doi.org/10.2139/ssrn.2747152

Hanming Fang (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Qing Gong

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States

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