Healthcare News & Insights

Obama administration vows to prosecute hospitals for Medicare abuse

If your hospital is using electronic health records to bill for Medicare and Medicaid reimbursement, watch out. The Obama administration is gunning for facilities and doctors who abuse the privilege.

How do we know?

A letter was sent to five major hospital trade associations from the Attorney General Eric Holder, Jr., and Kathleen Sebelius, the secretary of the Department of Health and Human Services. In the letter, it was stated that there have been “troubling indications” that some providers are using electronic health records to “game the system,” possibly to obtain payments to which they’re not entitled.

Specifically, the letter pointed to cloning and upcoding as ways hospitals and providers are defrauding federal government programs.

Cloning is where information from one patient’s medical record is copied and pasted into other patients’ records to increase reimbursement. And upcoding is the process of charging for more extensive treatment than the patient actually received.

Increased monitoring

Sebelius and Holder reminded hospitals that false documentation is not only bad patient care, it’s illegal, and they’re escalating their efforts to prevent fraud and will pursue it aggressively when they find it.

New tools provided by the healthcare law give CMS the ability to stop Medicare payments upon suspicion of fraud and to “mine data”  to detect it. CMS’s efforts so far have contributed to record-high collections and prosecutions. And in 2011 alone, prosecutions were 75% higher than in 2008.

So facilities should look for more audits coming their way from CMS in its search for improper billing through the use of electronic medical records. Specifically, CMS plans to start doing more extensive medical reviews of coding E/M services and will use comparative billing reports to identify outlier facilities.

You may want to get the word out to your providers of CMS’s increased detection and prosecution efforts and let them know what the penalties will be if they’re caught misrepresenting their services in patients’ medical records.

AHA politely fires back

The American Hospital Association (AHA), one of the five recipients of the letter, replied to Sebelius and Holder in a letter that emphasized how seriously hospitals take their obligation to properly bill for Medicare and Medicaid. The AHA pointed out that it’s asked CMS 11 times since 2001 to develop national guidelines for reporting hospital emergency department (ED) and clinic visits.

The problem is Medicare and Medicaid payment rules are highly complex and are only getting more complex with each passing year, the AHA noted in its letter. And to make matters worse, the E/M descriptors, which were designed to reflect physician activities, don’t adequately describe the range and mix of services provided in hospitals.

In 2003, the AHA and the American Health Information Management Association (AHIMA) recommended CMS implement national hospital E/M visit guidelines based on the work of an independent expert panel.

However, to date, CMS hasn’t created national hospital E/M guidelines.

AHA let CMS know what’s needed is clearer guidance from CMS, not increased audits which divert much needed resources from patient care.

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