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Underpayment versus Overpayment (GEN)
Posted May 5, 2008
The question of underpayments and overpayments has been raised. An underpayment can be either by error or by intent. The amount billed by the provider may be by choice less than that which is specified in the Medicare Physician Fee Schedule (MPFS). If a fee submitted is less than that specified in the MPFS, it is assumed that is the fee desired by the billing provider, and the lower fee is paid. The MPFS is the upper limit of payment. This fee includes a spectrum of and variation of services which one would expect for a particular service. Fees which are in excess of the MPFS fee are reduced to the MPFS fee.
In the case of the Recovery Audit Contractor (RAC), to make the process an even process, the RAC recovers and is paid for underpayments discovered as well as overpayments discovered.
In figures on the Centers for Medicare & Medicaid Services (CMS) Web site, in all of Medicare, on projections from sampling, there is a one tenth percent underpayment found and a 3.2 percent overpayment found. One can see that these are both errors and present efforts by Medicare are to reduce both types of errors.
For reduced services, a 52 modifier can be used, and for extended services, a 22 modifier can be used. The use of these modifiers is expected to be infrequent by Medicare, since the MPFS amount provides for a spectrum of variation in services rendered for a particular code. |
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