Comer Raises Concerns Over Complex Federal Billing System Potentially Fueling Improper Payments and Rising Healthcare Costs

Requests a staff-level briefing from the Centers for Medicare and Medicaid Services on its oversight of the Current Procedural Terminology code system.

WASHINGTON-The House Committee on Oversight and Government Reform is continuing to investigate drivers of rising healthcare costs in federal programs, including systemic issues that may enable significant waste, fraud, and abuse of taxpayer funds. In a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Mehmet Oz, Chairman James Comer (R-Ky.) highlighted that the federally mandated Current Procedural Terminology (CPT) code system, used as the standard for billing Medicare and Medicaid, plays a central role in directing how billions of taxpayer dollars are spent each year. He warned that the system's complexity and lack of transparency may be contributing to improper billing, driving up costs for both patients and taxpayers, and requested a staff-level briefing from CMS on its oversight of the CPT system.

"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. "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, created and maintained by the American Medical Association (AMA), are the foundation of the healthcare billing system and are required by the CMS for Medicare and Medicaid, raising concerns about federal reliance on a privately maintained system. The U.S. Department of Health and Human Services Office of Inspector General found that hospital billing at the highest severity level rose nearly 20 percent from FY2014 to FY2019, reaching 40 percent of Medicare inpatient cases, while the U.S. Department of Justice recovered $2.2 billion in fraud and false claims settlements by the end of 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 the 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."

Read the letter here.