Complex and billed at a higher rate, OIG added physicians billing for critical care evaluation and management services to the work plan.
Continue readingCritical Care Services Under the Microscope
A million-dollar healthcare compliance monitoring mistake
Avoid this million-dollar monitoring mistake. Help clinical colleagues apply their expertise to your scalable, repeatable healthcare compliance processes.
Continue readingPhysician 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).
Managing regulatory change is a critical way to avoid enforcement actions. YouCompli is the only healthcare compliance solution that combines actionable, regulatory analysis with a simple SaaS workflow to help you manage regulatory change. Read more about the rollout and accountability of requirements or schedule a demo.
Download our white paper on how compliance professionals can help healthcare institutions mitigate risk.
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Beneficiary inducements…don’t cross that line
Illegal beneficiary inducements include: free insulin, deflated Medicare copayment, courtesy adjustments for injections, free glucometers and waived co-payments
Continue readingAvoiding up to $1.5 million a year in Privacy Rule penalties may be easier than you think.
Avoid up to $1.5M a year in Privacy Rule penalties and investigations. Information blocking oversight team for effective healthcare regulatory compliance.
Continue readingGet ready to comply with strict new privacy regs [or pay big fines]
New rules from the Health and Human Services (HHS) department put stricter guardrails on how and when healthcare organizations provide access to PHI.
Continue readingProtecting Hospital Finances in the Post-Pandemic Environment
It’s become a cliche, especially in healthcare, to say that COVID-19 has changed “everything”. One thing that has clearly changed, however, is hospital finances.
Pandemic response stretched every healthcare system in the United States, many to the breaking point. Revenues from non-COVID procedures were significantly reduced, to the point that furloughs of vital medical staff have become necessary.
In this environment, compliance professionals have an important role to play. Ensuring that all payment compliance regulations are being followed helps to protect existing revenue streams, and helps to get the system back on a strong financial footing. As hospitals are getting “back to normal” and trying to find ways to bolster their budgets, good compliance practices are vital.
Outstanding Payments and Patient Insurance
In-hospital treatments declined during the pandemic; however, virtual health visits significantly increased. It’s crucial to continuously monitor payment compliance practices, which include patient insurance information, especially when offering this new treatment vector.
Pre-pandemic, the number of Medicare patients increased by 11 million since 2014, and at least 37 states expanded Medicare eligibility in 2019. While it’s hard to say where Medicare coverage will go as government budgets also come under pressure, these numbers could mean that some outstanding medical bills may be covered.
Historically, about 1% to 5% of self-pay accounts, or patient out of pocket costs, are written off by hospitals as bad debt. Checking and double-checking that your institution has the right information about patients, now and going forward, can be a key step in keeping the hospital financially strong.
The number of uninsured patients has continued to grow — by 12% towards the last months of 2017, and 27 million Americans have lost their employer-provided insurance during the pandemic. Overall, improving payment compliance practices in relation to insurance is an important step in effectively managing these, and other, challenges with patient payment balances.
Reducing Readmission Rates and Penalties
If your hospital serves Medicare and Medicaid patients, you probably know the high number of readmissions that occur in typical months. Readmissions that take place within 30 days of an initial visit cost hospitals a staggering $41.3 billion. In a post-COVID world, these patterns may not hold — but that could mean that readmissions are going to go up, not down.
CMS instituted several programs to try to manage these readmission challenges.
- The Hospital Readmissions Reduction Program (HRRP): rewards hospitals for lowering readmission rates for common health conditions like heart attacks, pneumonia, COPD, and total hip and knee replacement surgery
- The Hospital-Acquired Condition Reduction Program (HACRP): encourages a reduction in avoidable infections resulting from colon surgeries and hysterectomies, bedsores, sepsis, and even blood clots
Hospitals with, according to CMS, higher than average readmission rates face steep penalties and lower claims reimbursement. In the fiscal year 2020, pandemic notwithstanding, 83% of the 3,300 hospitals in the U.S. were projected to face penalties. And these penalties can be as high as a 3% reduction in repayment. Across the United States, CMS penalizes the worst-performing hospitals with a 1% reduction in total claim reimbursement.
As hospitals reopen and restart regular procedures and treatment, and try to rapidly scale revenue generation, more hospitals may face penalties, if compliance practices are not strong. Surprisingly, at least 12% of readmission cases of readmission cases are preventable, according to the Medicare Payment Advisory Commission (MedPAC).
Two ways hospitals can comply with CMS’ regulations and boost patient care are:
- Embrace a process that sends discharge summaries to the primary care physician
- Assign staff follow-up on post-discharge test results.
Setting up such a process can be tricky, especially in larger hospital facilities and in facilities that are still challenged in the aftermath of COVID. Medical staff need to be able to consistently and quickly assign, track, and review summaries and test results.
Monitoring each step of the process is necessary to ensure that your organization is taking the proper steps to adhere to Medicare and Medicaid requirements. That way, your hospital easily avoids significant penalties while boosting patient care. CMS also recommends that hospitals be on the lookout for hospital-related illnesses, which can derail patient care standards.
What You Can Do
Staying on top of the ever-changing world of CMS regulations isn’t easy, especially as we emerge from the pandemic crisis. But we can help by providing you with expert advice and tools that target the regulations and policies needed to run your hospital compliance program more effectively.
Our fully customizable software helps you and your revenue cycle team stay on top of every regulation, so you’ll have the best possible chance of meeting essential mandates, keeping cash flowing and avoiding penalties.
5 Payer Audit Errors Every Hospital Must Avoid
Revised September 2022
Most healthcare providers, from large hospitals to solo practitioners, experience an external audit at some point. The scrutiny can unveil errors and violations, which can lead to hefty penalties.
The key to surviving an external audit, with the least amount of frustration, is to avoid these five common mistakes.
1. Late Responses
Your deadline to submit relevant documentation begins upon receiving that external audit request.
External audits may be requested by a commercial health insurance payer, or government agencies such as the Centers for Medicare and Medicaid Services (CMS) or Office for Civil Rights (OCR). While the origin of the audit request doesn’t matter, a timely response is essential.
Take all deadlines seriously. If an extension is needed, ask for one, immediately. Missing deadlines can result in hefty fines and penalties.
2. The Wrong Documentation
A common trigger for payer audits is improper or lack of necessary documentation. As a healthcare practitioner, you must prove the medical necessity of each test or procedure used to diagnose and treat your patients.
Here’s the tricky part. Sometimes payers and providers disagree on what tests or procedures are medically necessary. Additionally, medically necessary guidelines change frequently. CMS provides local coverage determinations (LCDs) and national coverage determinations (NCDs) to help with your documentation. Be sure you are aware of changes to these coverage determinations.
The best way to mitigate this problem is to educate your staff on what services the payer considers medically necessary, and what documentation is required to establish medical necessity.
Additionally, clearly document the need for a particular procedure to treat or diagnose a patient. Finally, when required, ensure that authorization is received from the payer before rendering services.
3. Billing the Wrong Codes
Incorrect billing and coding practices can raise suspicion of fraud, failed claims, or delayed reimbursement, and — you guessed it — external payer audits. Providers and patients overpay a whopping $68 billion annually due to incorrect billing.
Coding systems developed by the American Medical Association and the Centers for Medicare and Medicaid are designed to streamline the billing process. Every medical procedure and service from ambulance rides to chemotherapy drugs to doctor visits are contained within coding systems such as the ICD-10, CPT, and HCPCS.
Studies show 80 percent of medical bills in the U.S. contain errors. This percentage can decrease by ensuring appropriate staff stay current with billing and coding updates and communicate those changes to the right clinical and administrative staff to avoid old and outdated codes.
4. No Self-Audit
One way to prepare for payer audits is to perform regular self-audits within your facility. Internal audits are great for identifying and eliminating weak spots that can potentially lead to headaches down the road, like rejected claims and costly compliance failures.
One drawback is the strain on precious resources like time and personnel. You can get around this problem by hiring a third-party audit service. Make sure you have HIPAA-compliant Business Associate Agreements (BAA) so that you’re allowed to share your patient health information with third parties providing auditing services.
Another option is to use software provides 24/7 access to survey compliance data. Ideally, this software will provide automatic tracking of all documentation and decisions involved in the process of running your organization.
This ensures that compliance professionals can get immediate reporting on how well their team is doing, conducting audits more efficiently and effectively. It’s a time and cost-effective solution to hiring an outside third-party provider.
5. No Legal Help
Having a healthcare attorney in your corner can mean the difference between a smooth audit experience and an audit nightmare.
Here’s how a healthcare legal team can benefit your health practice:
- Work intimately with your staff to analyze any risky billing procedures.
- Challenge any demands from payers for overpayment.
- Challenge any allegations of fraudulent billing practices.
- Push back on any denied claims and the overuse of service claims.
Again, software is a useful tool to support your attorney’s work. A system that stores all compliance information, including payment practices, and has search capability will provide your legal team with the information they need to fight payer audit discrepancies when the time arrives.
External payer audits don’t have to be a nightmare. By being adequately prepared and vigilant, your next audit experience can be more streamlined and less stress-inducing.
Learn More About YouCompli
The best way to prepare for a payer audit is to carefully manage changes to regulatory changes and coverage determinations. YouCompli can help you establish a scalable, repeatable process so you don’t miss a relevant change and you can equip your clinical colleagues to respond to the change. Then, when the audit does happen, you’ll have an easy way to demonstrate your work to comply with the requirements. Find out more.
Jerry Shafran is the founder and CEO of YouCompli. He is a serial entrepreneur who builds on a solid foundation of information technology and network solutions. Jerry launches, manages, and sells software and content solutions that simplify complex work. His innovations enable professionals to focus on their core business priorities.
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