Medicare Could Do More to Flag Claims Under ‘Medically Unlikely Edits,’ GAO Says

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By Steve Teske

Only a small percentage of Medicare provider payments screened by a specific prepayment edit in 2011 were for amounts that exceeded excess billing limits, but the program still could do more to better target the edits, according to a Government Accountability Office report released June 11.

Fewer than 0.1 percent of payments Medicare made in 2011 were for amounts of services that exceeded a payment threshold known as a “Medically Unlikely Edit,” or MUE, GAO said in Medicare Program Integrity: Few Payments in 2011 Exceeded Limits Under One Kind of Prepayment Control, but Reassessing Limits Could Be Helpful (GAO-13-430).

MUEs set limits on the maximum units of services that may be billed by a provider for a beneficiary on a single date of service, GAO said. The Centers for Medicare & Medicaid Services has developed MUEs for three types of services: those provided by physicians and other practitioners; durable medical equipment services; and services provided in an outpatient hospital setting, it added.

GAO said it found that $14 million out of a total of $23.9 billion in Medicare payments were made for services that exceeded MUE limits and where the claims did not include information from the providers to indicate why the additional services were medically necessary.

Per-Day Limits Needed

GAO said claims could exceed the limits because the MUEs are not established as per-day limits that assess all services billed by a provider for a single beneficiary on the same day, such as no more than one of the same operation on each eye, GAO said.

By applying on a national basis more restrictive local limits used by some contractors, GAO found Medicare could have lowered payments by an additional $7.8 million.

The report said CMS plans to begin implementing MUEs for some services as per-day limits for services where it would be impossible to exceed the limits for anatomical or other reasons. Medicare contractors that pay claims may develop local edits, which can set more restrictive limits for some services than the national unpublished MUE limits, it said.

“However, CMS is not evaluating these local edits to determine if these lower limits might be more appropriate,” the report said.

“To the extent that these and other local edits are not evaluated more systematically, CMS may be missing an opportunity to achieve savings by revising some national MUEs to correspond with more restrictive local limits,” GAO said.

It found that payments that exceeded MUE limits were concentrated among certain providers and types of specialties; in certain states; and for certain services. For example, the top 100 providers with payments that exceeded the MUE limits accounted for nearly 44 percent of total payments that exceeded the MUE limits, although they accounted for only about 1 percent of total payments for all services with MUEs.

Moreover, about 26 percent of the top 100 providers included clinical laboratories and durable medical equipment providers, both of which had been identified previously as having high potential for fraudulent billings, GAO said.


GAO recommended CMS examine contractor edits to determine whether any national unpublished MUE limits should be revised. It should consider reviewing claims to identify providers that exceed the unpublished MUE limits and determine whether their billing was proper, GAO said.

In a response in the report, the Department of Health and Human Services said CMS will review making revisions to the MUEs to ensure that edit levels are appropriate, based on input from national health care organizations, providers, and contractors.

It said CMS also will periodically examine claims that exceed the MUE limits to determine whether billing was proper.

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