Comer raises concerns over federal billing system and rising healthcare costs

Chairman James Comer of the House Committee on Oversight and Government Reform raised concerns on Apr. 30 about the complexity of the Current Procedural Terminology (CPT) code system used for billing Medicare and Medicaid, warning that it may contribute to improper payments and higher healthcare costs. In a letter addressed to Centers for Medicare and Medicaid Services (CMS) Administrator Mehmet Oz, Comer requested a staff-level briefing from CMS regarding its oversight of the CPT system.

The issue is significant because billions of taxpayer dollars are spent each year based on this federally mandated billing framework. Comer said that a lack of transparency in how CPT codes are created and maintained could be enabling waste, fraud, and abuse within federal healthcare programs.

"The Committee on Oversight and Government Reform is continuing to investigate the drivers of rising healthcare costs in federal programs, including systemic issues that may enable waste, fraud, and abuse. The Current Procedural Terminology (CPT) code system mandated by the federal government as the standard for billing Medicare and Medicaid plays a central role in determining how billions of taxpayer dollars are spent each year. The complexity of this system may be contributing to improper billing and higher costs for patients and taxpayers," wrote Chairman Comer.

He continued: "These concerns include fundamental questions about transparency, cost control, and whether federal healthcare policy is shaped in the best interest of patients, or by entities with financial incentives tied to the system’s continued complexity. Understanding the extent of CMS’s oversight of this framework, including whether the agency has the authority to assert greater control, reduce reliance on a proprietary standard, or promote alternatives that could lower administrative costs and billing complexity."

CPT codes are developed by the American Medical Association but required by CMS for use in Medicare and Medicaid claims processing. Recent findings from government agencies show hospital billing at high severity levels increased nearly 20 percent between fiscal years 2014 through 2019; meanwhile $2.2 billion was recovered from fraud cases involving false claims settlements at end FY2022.

"Given these concerns, the Committee seeks to better understand whether the structure and complexity of the CPT system drives unnecessary costs in federal healthcare programs and what steps CMS is taking to protect taxpayers," continued Chairman Comer. "The Trump administration has made great strides in banning unlinked chart reviews with an expected savings on payment reductions reaching $7 billion per year. CMS’s real-time fraud detection and prevention is critical for lowering costs. However, improper billing remains a significant issue outside of Medicare Advantage Organizations (MAOs), with billions recovered annually through fraud and false claims cases, suggesting that underlying vulnerabilities in the billing system persist. Because CMS is responsible for administering these programs and enforcing billing standards, the Committee requests a staff-level briefing on CMS’s oversight of CPT coding and its impact on program integrity and federal spending."