OIG Audit Finds Medicare Overpayments for Optometry Services in Nursing Homes

The Office of Inspector General (OIG) audit report revealed that Medicare overpaid optometrists $4.7 million for high-level evaluation and management (E/M) services provided to nursing home residents between 2021 and 2023. These payments were largely concentrated, with 15 optometrists accounting for 72% of the overpayments, amounting to roughly $3 million. The audit found that Centers for Medicare & Medicaid Services (CMS) lacked adequate claim review processes and system edits to prevent improper billing for certain E/M CPT codes, specifically 99307 through 99310, used for subsequent nursing facility care. These codes typically require extensive patient care for unstable or significantly ill patients, which was not supported by medical record documentation in many cases. Nursing homes often engage optometrists for routine eye exams and treatment of chronic conditions like diabetes-related eye issues and age-related macular degeneration, but Medicare coverage is limited to services necessary for diagnosis, treatment, or maintaining function during illness. The OIG’s review of a sample of claims highlighted discrepancies where billing did not align with patient needs or Medicare coding rules, with many visits documented as routine follow-ups rather than care for unstable conditions. The report recommended that CMS recoup the overpayments, notify involved providers to conduct internal audits for further potential overpayments, and enhance contractor training and claim review procedures for optometrist billing. While CMS agreed with recouping funds and provider notifications, it declined to increase claim reviews and develop new system edits citing resource constraints, prompting OIG to reiterate the need for improved program integrity controls to reduce financial risk to Medicare.