Compliance helps healthcare organizations mitigate risk by building strong relationships and leading through influence for effective regulatory change management
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Physician Coding and Billing Enforcement: What to Watch For
CJ Wolf, MD writes enforcement action summaries for the YouCompli blog. These summaries provide real-world examples of regulators’ response to practices that don’t fully comply with regulations.
This month’s article looks at physician coding and billing cases. It reflects remarks CJ made at HCCA’s 2022 Compliance Institute. (For more insights from the Compliance Institute, download our white paper on how compliance professionals can help healthcare institutions mitigate risk.)
Physicians are often seen as the drivers in healthcare. They examine patients, order labs and diagnostic testing. They perform procedures and surgeries, admit patients to hospitals, and document in the medical record.
If you ask physicians what they think about coding and billing, most of them will tell you this: The rules do not make sense, are hard to understand, and are constantly changing. Most of them are doing their best to apply the confusing rules as they care for patients. Some might even be billing improperly on purpose. Either way, these examples highlight the consequences of “getting it wrong.” They offer clues for compliance professionals to spot training opportunities before they become enforcement actions.
Billing for services not needed or received
In March of 2022, a New Jersey rheumatologist was convicted by a federal jury for defrauding Medicare and other health insurance programs. She had billed for services that were either unnecessary or were not provided. Court documents demonstrated the physician billed for expensive infusion medication that her practice never purchased. She also fraudulently billed millions of dollars for allergy services that patients never needed or received. The doctor will be sentenced in July for multiple counts of healthcare fraud. Each count carries a maximum penalty of 10 years.
Compliance officers should watch for:
Follow the money. If a practice is billing millions of dollars for allergies services, that code or set of codes is likely to stand out as an outlier to compliance programs monitoring all their billing data. Compliance officers should have a true sense of what their organization’s bread and butter services are. Then, they should perform regular audits of those high dollar, high volume services.
Billing for unnecessary urine drug testing
A Florida physician, serving as a medical director for a sober living facility, was found guilty of healthcare fraud. The federal jury found that he had ordered medically unnecessary urine drug tests. Court documents showed the physician unlawfully billed approximately $110 million of urinalysis (UA) drug testing services that were medically unnecessary for patients. Some of the evidence used at trial included inappropriate standing orders for UA drug tests in exchange for a monthly fee. As a condition of residency, patients had to submit to excessive and medically unnecessary urine drug testing three to four times per week.
Evidence also showed the medical director did not review the UA drug test results and did not use the UA drug tests to treat the patients. This lack of review called the necessity of the tests into question. In addition, the doctor had these same patients sent to his office so he could also fraudulently bill for services through his own practice. He faces up to 20 years in prison for healthcare fraud and wire fraud conspiracy. He faces another 10 years for each of eleven counts of healthcare fraud.
Compliance officers should watch for:
If your organization allows for standing orders, you should have a written policy that guides their use. The policy should outline the risks and benefits of the standing orders. It should describe when they are appropriate and when they are not appropriate. That policy should also outline the process for reviewing standing orders on a regular basis to determine if they are still appropriate. If it’s been more than a year since you’ve reviewed a standing order, you may want to schedule a review soon.
Modifier misuse: unbundling under modifier 25
Billing and coding modifiers can also be an area of risk for physicians. In general, most encounters are reported with one Healthcare Common Procedure Coding System / Current Procedural Terminology (HCPCS/CPT) code. Medicare generally prohibits healthcare providers from separately billing for E&M services provided on the same day as another medical procedure. The exception is if the E&M services are significant, separately identifiable, and above and beyond the usual preoperative and postoperative care associated with the medical procedure.
When the E&M service meets this definition, modifier 25 can appropriately be appended to the E&M code. When that is done, a physician is, in essence, certifying that the procedure and E&M are separate enough to meet the definition of the modifier.
A urology practice learned an expensive lesson by allegedly using modifier 25 inappropriately. The practice agreed to pay $1.85 million to resolve allegations of modifier misuse. The case was initiated by a qui tam whistleblower. Allegedly the practice used modifier 25 to improperly unbundle routine E&M services that were not separately billable from other procedures performed on the same day. As a result, the practice improperly claimed compensation from Medicare for certain urological services. The whistleblower had performed audits that allegedly showed an overall error rate for the practice of 58% with some physicians showing a 100% error rate.
Compliance officers should watch for:
Any specialty could potentially run into problems with modifier 25. Consider common clinical scenarios such as a scheduled procedure. For example, in urology a physician might schedule a patient to return to the office another day for a scope procedure or a prostate biopsy. Frequently, upon return, the procedure is performed but a significant, separately identifiable evaluation and management service might not be performed. In those cases, it would not be appropriate to bill the procedure and an E&M service, but rather only the procedure. Automatically billing an E&M with modifier 25 just because the patient was in the office would be a red flag.
Conclusion
Physicians and their practices need to be aware of coding and billing risks. Enforcement agencies and potential whistleblowers may identify outliers or flat-out fraud. Common mistakes may include a lack of documentation or not performing a service but billing for it anyway. Other common mistakes are billing for procedures or services that were performed but were not medically necessary and misuse of medical codes and/or modifiers.
CJ Wolf, MD, M.Ed is a healthcare compliance professional with over 22 years of experience in healthcare economics, revenue cycle, coding, billing, and healthcare compliance. He has worked for Intermountain Healthcare, the University of Texas MD Anderson Cancer Center, the University of Texas System, an international medical device company and a healthcare compliance software start up. Currently, Dr. Wolf teaches and provides private healthcare compliance and coding consulting services as well as training. He is a graduate of the University of Illinois at Chicago College of Medicine, earned a master’s in education from the University of Texas at Brownsville and was magna cum laude as an undergraduate at Brigham Young University in Provo, UT. In addition to his educational background, Dr. Wolf holds current certifications in medical coding and billing (CPC, COC) and healthcare compliance, ethics, privacy and research (CHC, CCEP, CHPC, CHRC).
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Continue readingTelehealth expansion: Interstate licensure compacts benefit patients
Telehealth services and models have expanded rapidly during the pandemic. Healthcare employee burnout, the Great Resignation, and other factors are expected to further accelerate telehealth growth.
Telehealth expansion has led to significant growth in the use of interstate licensure compacts. As more healthcare professionals obtain licensure under compacts, compliance officers need to be aware of interstate licensure requirements – and their effects on patient care.
Increasing use of interstate licensure compacts
The National Council of State Boards of Nursing (NCSBN) recently published its annual report on interstate licensure. It noted 43 states and territories have enacted licensure compacts for nurses, physicians, physical therapists, emergency medical technicians, psychologists, speech therapists/audiologists, occupational therapists, and counselors.
The Nurse Licensure Compact (NLC) is an interstate agreement allowing nurses to practice in multiple states with one multistate license issued from their home state. The compact enables nurses to provide nursing services to patients located in other NLC states via telehealth without obtaining additional licenses. The NCSBN says this approach allows for greater nurse mobility, public protection, and access to care.
In addition, use of the Interstate Medical Licensure Compact (IMLC) grew by 47% in the past two years. The IMLC Commission noted “more than 8,000 licenses were issued through the compact from March 2020 to March 2021.” This is compared with nearly 4,000 licenses issued during the previous 12-month period.
With more healthcare professionals practicing across state lines, patients have more choices. And healthcare compliance officers have processes and procedures to update.
Interstate licensure compacts benefit patients
For patients, one benefit of licensure compacts includes licensing boards being able to ensure that physicians maintain professional integrity and medical standards – regardless of where they practice. As more healthcare professionals obtain licensure under compacts, patients gain greater flexibility in making care decisions.
For example, rural patients can participate in a telehealth visit with a specialist or provider at home. This saves patients the time and expense of driving long distances to see the same provider in a facility setting.
Another positive is the increased use of remote monitoring devices, such as glucose monitors, blood pressure monitors, and heart monitors. Patients can receive state-of-the-art monitoring remotely, instead of as a hospital inpatient. In turn, healthcare costs decrease and patient compliance increases.
A significant patient benefit with expanded telehealth is the inclusion of mental health services. Under the provisions of the Consolidated Appropriations Act of 2021, services for the diagnosis, evaluation, or treatment of mental health disorders may continue as telehealth services. Per the Centers for Medicaid & Medicare Services (CMS), the previous restrictions limiting telehealth mental health services to patients residing in rural areas no longer apply.
Compliance considerations
Compliance officers need to help their organizations keep up as healthcare delivery models change. Organizations will need to update everything from billing codes to human resources policies and procedures to information technology (IT) practices.
For example, compliance officers should partner with Human Resources to make sure out-of-state licensed professionals have been educated in facility policies and procedures. They also need to ensure that professionals working under licensure compacts understand the nuances of the rules and laws in the state they are working.
Compliance officers also need to work with the IT department to ensure that remote devices have been securely connected to the network. They also need to collaborate with the risk department on making sure proper medical professional liability insurance coverage has been obtained for these licensed professionals.
Compliance officers should work with Revenue Cycle on two crucial issues:
- Ensuring that the organization stays abreast of the changes to the CMS list of services payable under the Medicare Physician Fee Schedule when furnished via telehealth.
- Staying current on telehealth visit coverages and coding modifiers to decrease denials of patient charges.
As your team manages your response to continuing regulatory changes, having a system to keep up with the moving parts can help. YouCompli can support your regulatory change management process. It provides regulatory analysis to help you know what changes are coming and decide whether they affect your institution. It also provides requirements, tasks, and deadlines, in clear business English, making it easier for you to manage changes and verify that you’ve taken the proper steps.
Denise Atwood, RN, JD, CPHRM
District Medical Group (DMG), Inc., Chief Risk Officer and Denise Atwood, PLLC
Disclaimer: The opinions expressed in this article or blog are the author’s and do not represent the opinions of DMG.
Denise Atwood, RN, JD, CPHRM has over 30 years of healthcare experience in compliance, risk management, quality, and clinical areas. She is also a published author and educator on risk, compliance, medical-legal and ethics issues. She is currently the Chief Risk Officer and Associate General Counsel at a nonprofit, multispecialty provider group in Phoenix, Arizona and Vice President of the company’s self-insurance captive.
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Continue readingFor Hospitals, Climate Change Compliance Pays. Literally.
Hospitals nationwide are trying to recover from what AHA president Rick Pollack calls a “triple whammy.” Between “increased expenses incurred in…caring for the COVID patients,” “the decreased revenues” from “having shut down regular operations in terms of scheduled procedures,” and “the increased number of uninsured,” it’s probably no surprise that, according to AHA estimates, US hospitals are losing as much as $50 billion a month.
What is surprising, though, is how hospitals are offsetting some of those losses — to the tune of tens or hundreds of thousands of dollars a year — with significant savings from climate change sustainability. In principle, this boils down to cutting waste — wasted food, wasted paper, red bag waste, wasted electricity — and associated disposal costs.
Climate change regulations are complex, and are likely to change over time, as climate change becomes a more serious issue for regulators. Establishing a program now that fits within existing regulations, has potential to grow, and will support the hospital’s budget needs — all without violating other compliance requirements — is a significant win for compliance professionals.
As these examples show, there are opportunities now to reduce your climate risk, save money, and stay compliant:
Reduced Consumption
- In Wisconsin, Gundersen Health System reduced food waste by more than 80%, saving more than $150,000 over five years.
- They also found that cutting electricity waste was as easy as changing a light bulb – actually, lots of light bulbs. Retrofitting six buildings’ light fixtures cut electric bills in half, saving 4.4 million KwH and about $265,000 a year. And those are only the direct savings. Replacing incandescent bulbs or CFLs with LEDs produces highly directional lighting. They use 75% less energy and last 25 times longer. They also cut air conditioning costs, because while incandescents give off 90% of their energy as heat, and fluorescents about 80%, LEDs give off next to none.
- Ascension Healthcare saved $53.3 million over 7½ years by reducing energy use in its 141 healthcare facilities in 20 states.
- When Minnesota-based Health Partners went paperless in 2014, their more than 90 hospitals and clinics cut paper use by 8% and saved more than $700,000 over three years. (Before you follow their example, though, you should know which paperwork can go digital and which must be filed in hard copy to comply with federal and state regulations.)
- In Olympia, Washington, Providence St. Peter Hospital decreased water consumption by 58%, saving a total of $2,510,479 on water. What’s more, they earned another $1 million in utility rebates under a state water reduction incentive program. Accomplishing this was as simple as finding and fixing leaks, replacing single-pass refrigeration units, calling a vendor to turn off an unneeded cooling pipe, and installing dual-flush toilets and slowing sinks’ faucet speeds in 165 patient rooms.
- By cutting energy consumption by 23% per square foot in its 12 hospitals and almost 400 sites of care, Advocate Health Care saved $23 million over seven years. And by reprocessing instead of discarding medical devices, they save another $2.1 million annually.
ORs and Medical Waste
- ORs account for 20-30% of a hospital’s total waste, up to 60% of its medical waste, and about a third of its expenses. By lowering the number of air exchanges per hour (ACH) from 25 to 20 (the federal and state required minimum) between surgical procedures, the Cleveland Clinic saves $250,000 a year.
- Health Partners’ waste reduction and recycling program has diverted 793,000 pounds from the ORs of all its hospitals.
- By removing 91,753 pounds of instruments from the reprocessing cycle, Dartmouth Hitchcock Medical Center saved almost $1.5 million.
- Seattle’s Virginia Mason Medical Center cut supply costs by over $3 million in three years by switching to reprocessed medical devices.
Implications for Compliance
Selling these savings to the executive board is easy. Savings like these don’t just go once to your bottom line. They stay there, year after year. What’s more, they can increase your property value by as much as eight times your investment. Reducing energy use can also earn you federal tax reductions and refunds, state matching grants, and electric utility rebates.
From a compliance standpoint, the obvious concern is whether implementing these changes to green your organization will have negative impacts on your exposure to compliance risk. And that’s a big challenge to overcome. What you need is a way get clear insight into what regulations require, and what environmentally-focused options are available.
The New Office of Burden Reduction and Health Informatics: Implications for Healthcare Compliance
You may have heard that, last week, the Centers for Medicare & Medicaid Services (CMS) announced the creation of a new office: the “Office of Burden Reduction and Health Informatics.”
What exactly is this new office supposed to do? According to the press release from CMS, the intent is “to unify the agency’s efforts to reduce regulatory and administrative burden and to further the goal of putting patients first.”
All well and good. But what does that actually mean?
Value-Based Care
Here’s one thing that CMS says clearly. They are “committed to leveraging the significant flexibilities introduced in response to the COVID-19 pandemic as we continue to lead the rapid transformation to value-based healthcare.”
We’ve all been hearing about value-based care for years. (Here’s a piece from 2016, for example.) The pace of change hasn’t been particularly speedy, and the pandemic has disrupted most big transformative plans, especially in healthcare.
That said, the Department of Health and Human Services (HHS) is still committed to value-based care. If reducing or streamlining the regulatory environment is necessary in order to make this change happen, you can bet that HHS and CMS will do it.
What specific regulations will CMS change in order to make this happen? That remains to be seen. Recently, CMS did announce that they will be maintaining at least some of the regulatory changes related to telehealth.
Which ones? We know of one rule change that CMS has announced: the proposed physician fee schedule rule, which should come out in July, will include proposals to permanently expand coverage for telehealth services. As of this writing, the rule has not been published, and CMS has not announced details.
With that exception, however, there hasn’t been a lot of movement on specific regulations that could be helpful. In fact, our observations suggest that most regulators are moving back to business as usual. If CMS has plans to streamline regulations to enable the transformation to value-based care, they are keeping those plans very close to the vest.
Improved Review
However, CMS commits clearly to increasing the number of stakeholders – including clinicians, providers and health plans – that it engages with when assessing the impact of new regulations.
This could be a welcome change for compliance professionals, as a more comprehensive assessment of regulatory impact could result in a regulatory environment that’s a lot easier to work within. Clearer regs with reduced expectations would mean less work required by the clinical and revenue cycle staff in your organization.
And that would mean less time spent following up and trying to get staff to do the work.
Health Informatics
CMS has also committed – as indicated in the second half of the new office’s name – to further implement health informatics. The idea here is to effectively use health data in order to provide better care.
CMS gives this as a specific example: “to create new tools that allow patients to own and carry their personal health data with them seamlessly, privately, and securely throughout the health care system.”
This proposal has obvious advantages for both patients and providers. But it could cause significant headaches for compliance.
Staying in compliance with an EHR system for just one health system is challenging enough. What CMS is proposing is an EHR system that applies across all Medicare and Medicaid beneficiaries. This would be much more complicated! The HIPAA implications alone could be staggering.
So, the use of health informatics could make the work of compliance much more challenging. We can all expect that there will be more data available and being used, and more complex tools to manage it. This trend exists across almost all industries, and healthcare is not going to be an exception.
In a highly regulated environment like healthcare, however, big data and big data tools will need to be monitored very carefully. There are a lot of ways that data tools could violate regulatory requirements. If compliance professionals aren’t careful, software and other tools could be put in place that expose the organization to high levels of risk.
Staying Up to Date
As of this writing, there is limited information as to what the Office of Burden Reduction and Health Informatics will be doing for the US healthcare system. It has a broad mandate, with unclear specifics.
There is a possibility that the office will make compliance easier, by more effectively assessing the impact of regulations before imposing them. There is also a (stronger) possibility that it may make compliance more challenging, by creating wide-ranging technological systems that compliance officers will need to monitor carefully.
As new regulations are issued, and new announcements are made, we’ll be keeping you updated. youCompli customers always have access to the latest regulatory changes as they come out and will be well-positioned to adapt to the environment created by his new office.