Some Medicare payments to hospitals for bariatric surgery may be inappropriate, OIG finds

CMS doesn’t seem inclined to adopt OIG’s recommendations for changes to Medicare coverage criteria for the procedure.

Medicare could have saved nearly $48 million in bariatric surgery payments to hospitals during an 18-month period if coverage rules and guidance were better implemented at the contractor level, according to a new report from the Office of Inspector General (OIG) at the U.S. Department of Health and Human Services.

However, the findings are unlikely to result in changes to coverage criteria or claims assessment procedures, with CMS responding that it disagrees with OIG’s recommendations.

The audit period encompassed nearly 25,000 hospital inpatient claims for bariatric surgeries performed between January 2018 and July 2019. The claims amounted to $275 million in Medicare payments.

OIG reviewed a statistical sample of 120 claims and corresponding medical records to determine whether the claims met either national or local coverage guidelines. It found 32 claims that did not meet eligibility specifications in local coverage criteria or guidance and one claim that did not meet national coverage criteria (i.e., criteria in a national coverage determination, or NCD).

Extrapolating the data, OIG determined that Medicare could have saved $47.8 million in bariatric surgery payments during the 18-month period if contractors had disallowed claims that did not meet NCD requirements or local eligibility specifications.

Issues with claims adjudication

The two eligibility specifications that most frequently weren’t met among the surveyed claims were:

• Beneficiary’s participation in a weight management program
• Mental health/psychological evaluation and clearance

Issues that affected hospitals’ ability to meet the various criteria, according to OIG, included:

• Lack of oversight to ensure adequate documentation to support eligibility
• Lack of understanding or awareness of the eligibility specifications

Medicare administrative contractor (MAC) jurisdictions “with more restrictive specifications had more claims that did not meet the eligibility specifications and more specifications that were not met,” OIG found. “The Medicare contractors may have issued differing eligibility specifications for bariatric surgery because CMS’s NCD requirements were not specific.”

Concerns about the lack of specificity in the bariatric surgery NCD include:

• When BMI should be measured
• Required supporting documentation for demonstrating prior unsuccessful treatment for obesity
• Required presurgical medical evaluations

Disagreement about the need for changes

CMS should take steps to clarify coverage criteria for bariatric surgery, OIG wrote. It should consider:

• Whether the NCD would be improved by incorporating any eligibility specifications from local criteria
• Which local criteria should be certified as formal requirements in a local coverage determination rather than merely serving as guidance

CMS replied that it would “continue to monitor the scientific evidence related to bariatric surgery procedures. Based on the scientific evidence, CMS will evaluate whether an update to the NCD is necessary.”

The agency also will “continue to educate hospitals regarding proper billing and Medicare requirements for Medicare-covered items and services.”

CMS also said nothing in OIG’s report suggests a conflict between the NCD and local criteria and that there are valid reasons for variation in criteria at the local level.

OIG concluded, “We are concerned that if CMS does not take any corrective action, the eligibility specifications for Medicare beneficiaries may continue to vary significantly among the Medicare contractors without evidence-based reasons for the differences.”