Goodsurance

Policy & oversight

OIG Found More Than 15 Million Dollars in Medicare Payments Where Emergency Room Billing Codes Were Used at Non-Emergency Sites

A March 2026 federal audit identified improper and potentially improper Medicare payments made when physicians and hospitals used emergency department billing codes for care not actually delivered in an emergency department, and found that Medicare lacked automated safeguards to catch the mismatches.

By the Goodsurance editorial teamAugust 8, 2026

Federal auditors found that Medicare made more than 15 million dollars in improper and potentially improper payments when providers billed emergency department procedure codes for care actually delivered outside of emergency departments, according to an Office of Inspector General report issued March 9, 2026.

The audit identified two distinct problems. First, Medicare improperly paid physicians 922,524 dollars for 9,749 procedures that were billed using emergency department codes but listed a non-emergency place of service. Second, hospitals received 14.2 million dollars in potentially improper payments for claims that paired emergency department procedure codes with non-emergency revenue center codes.

Medicare rules require providers to use emergency department procedure codes only when care is actually delivered in an emergency department. When the billing code does not match the actual care setting, patients can be harmed financially: the audit found that beneficiaries may have been incorrectly billed for Part B cost-sharing, including deductibles, that would not have applied had the claims been coded correctly.

The OIG recommended that CMS direct Medicare billing contractors to implement or refine automated system edits to flag and prevent these mismatches at the point of claim processing. CMS agreed with the recommendations. As of the report date, the system edits needed to catch these billing errors automatically were not yet in place.

The OIG also recommended that CMS recover the 922,524 dollars in confirmed improper payments to physicians.

In plain words

Doctors and hospitals are supposed to use special billing codes only when care is given in an emergency room. A federal watchdog found that some providers used those codes even when the care took place somewhere else. Medicare paid more than 15 million dollars in those cases. Some patients may have been charged more than they should have been. The watchdog told Medicare to add automatic computer checks to stop these billing mistakes before payment goes out.

Understand the basics first

Source: HHS OIG
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