October 1997
Volume 61 |
Number 10
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PRACTICE MANAGEMENT
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| Fraud and Abuse
Saga Continues |
Karin Bierstein,
Practice Management Coordinator
Compliance with Medicare regulations against fraud and abuse
is fast becoming the dominant issue of anesthesiology practice
management. The third annual ASA Conference on Practice Management
that was held last February in Orlando, Florida, featured presentations
about fraud and abuse. Next year's conference in San Antonio,
Texas, will continue where Orlando's left off. Developments during
the past few months justify devoting the present column to the
topic.
Manual Now Available
Of the most immediate importance to most anesthesiologists, ASA
has published a manual containing an extensive discussion of Medicare
laws and rules, as well as a model compliance plan. Complimentary
copies of "Compliance with Medicare and Other Payor Billing
Requirements" are available to ASA members. To receive a
copy, please contact the ASA Publications Department at (847)
825-5586 or by e-mail at <publications@ASAhq.org>.
The manual was prepared by our outside counsel, Squire, Sanders
& Dempsey, in consultation with ASA Washington Office staff.
It represents our detailed and conservative interpretation of
the principles applicable to such important billing questions
as medical direction of nurse anesthetists or residents, pain
management services and locum tenens arrangements. The model compliance
plan should be of particular value to anesthesia practices interested
in adopting a written plan.
If anything, the manual is even more timely now than when it
was commissioned earlier this year. A Health Care Financing Administration
(HCFA) financial audit for 1996 heightened governmental interest
in enforcing the fraud and abuse rules, and the passage of new
legislation will make such enforcement easier, as described below.
Anesthesiologists cannot afford to ignore the subject.
Medicare Finds $23.2 Billion in Net Overpayments
In July, with some fanfare including congressional testimony,
HCFA announced the results of the first comprehensive annual audit
of its financial statements. The 1996 Chief Financial Officers
Audit, performed by the Department of Health and Human Services
Office of the Inspector General (OIG), revealed that HCFA had
paid out $23.2 billion more for Medicare services than it should
have.
The point estimate of $23.2 billion was based on an examination
of the medical records underlying 5,314 claims submitted on behalf
of 600 Medicare beneficiaries identified through a multistage,
stratified sampling process. Of these claims, 1,577 (30 percent)
did not comply with Medicare laws and regulations.
Extrapolating from the dollar value of the noncompliant claims
in relationship to the total of Medicare fee-for-service spending
in 1996, the auditors estimated that about 14 percent of all payments
were improper. Only 22 percent of the resultant $23.2 billion,
or about $5.1 billion, was attributed to physicians, a category
that for HCFA's purposes includes chiropractors, optometrists
and podiatrists. The other 78 percent came from hospitals, home
health agencies, skilled nursing facilities and laboratories.
The claims that were paid "improperly" contained four
different types of errors. Insufficient or nonexistent documentation
accounted for 47 percent of the total and thus caused the greatest
concern, especially since one-third of the providers in this group
failed to respond to repeated OIG requests for medical documentation.
The other error types were lack of medical necessity, incorrect
coding (i.e., upcoding; the "few instances of downcoding"
were offset) and billing for noncovered or unallowable services
such as routine screening examinations.
There was no attempt to determine what proportion of the improper
claims might represent fraud rather than honest billing mistakes.
Given the sheer volume of claims processed by Medicare (800 million
annually) and the complexity of the reimbursement rules, the OIG
concluded that "HCFA needs to consider stronger deterrents
to reduce improper benefit payments."
HCFA itself concluded that the audit findings with respect to
claims documentation were "extremely disturbing" and
announced that it would take corrective measures, including the
following:
- Increase the level of claims review. Currently, HCFA reviews
about 9 percent of claims. Since the cost of reviewing 100 percent
would be prohibitive (even though HCFA claims to have recouped
$14 for every dollar spent on "payment safeguard"
activities in 1996), HCFA will begin in 1998 with a random prepayment
review of evaluation and management codes, the most frequently
billed physician services. Other services are expected to be
targeted later.
- Conduct an in-depth review of some of the physicians and other
providers profiled in the audit.
- Increase the number of medical directors on the staff of the
fiscal intermediaries that process Medicare Part A (hospital)
claims by 15 percent.
- Continue the "Correct Coding Initiative" and develop
coding policy and "edits" with a focus on high-utilization
codes.
- Increase efforts to educate physicians on correct coding and
documentation. HCFA will seek the assistance of medical societies.
The bottom line: although anesthesiology is not among the first
specialties to draw the particular attention of HCFA, the odds
that Medicare claims will be subject to stricter scrutiny are
certainly increasing. Note that the government recently established
a fraud hotline where beneficiaries, employees or anyone else
can call the OIG to report a perceived overcharge. Through March
31, the hotline had generated nearly 14,000 complaints.
Complete documentation of the services provided in the medical
record is key.
Budget Act Makes Enforcement of
Antikickback Law Easier
This summer's federal budget legislation fine-tuned a number
of the antifraud provisions contained in the 1996 Health Insurance
Portability and Accountability Act (HIPAA). In particular, the
1997 Balanced Budget Act created a new civil monetary penalty
(CMP) for violations of the Medicare/Medicaid antikickback law.
That law prohibits payment (or any economic benefit) for referring
a Medicare or Medicaid patient, or for recommending or arranging
for such a patient to obtain medical services. A potential application
that was reviewed in this column in May is the granting of professional
courtesy discounts.
As long as the only remedy for violations was criminal, thus
requiring proof "beyond a reasonable doubt," prosecutors
were not eager to pursue cases. But the CMP standard of proof
is lower and the size of the potential penalties (treble damages
plus $50,000 per violation) has convinced many health care attorneys
that the government will be prosecuting many more antikickback
cases.
Additional funding for the increased enforcement activity was
provided for in HIPAA. The OIG plans to double the number of its
investigators and auditors. One area of considerable interest,
in addition to the antikickback law, is the proliferation of billing
companies, especially those that are paid on a percentage of Medicare
collections.
Private Payers Also Increasingly Concerned
With Fraud
Some of the HIPAA money will go to establish a national databank
where all final adverse actions taken by the OIG against providers
are to be reported. The OIG intends to make the information in
this databank available to private as well as public payers.
In the more immediate future, many Blue Cross and Blue Shield
plans are bolstering their efforts to control health care fraud.
The Blues of Michigan, for example, estimates that its fraud investigation
unit saved or recovered more than $20 million in 1996.
The good news, with respect to private payers, is that it is
harder to commit fraud in submitting claims to these entities.
The convoluted Medicare rules, notably those regarding nurse anesthetist
supervision, do not apply. HIPAA did extend the application of
the criminal provisions of the various antifraud laws to
private payers, but criminal liability requires an intent to obtain
payment to which one knows one is not entitled. Negligence is
not enough.
"Deliberate ignorance or reckless disregard" of the
accuracy of claims, however, can subject a physician who overbills
Medicare to civil monetary penalties, which can amount to $10,000
per violation and treble damages per false claim. It is worth
every anesthesiologist's while, therefore, to understand the Medicare
billing requirements, and again, ASA members are urged to consult
the manual described above.
No Anesthesia Changes in Latest Version of National Correct Coding
Initiative
Version 3.3 of the National Correct Coding Initiative (NCCI),
which superseded Version 3.2, contains no new "edits,"
i.e., code pairs that cannot be billed together, for anesthesia
services. More than half of the approximately 1,100 edits in Version
3.3 are in the radiology section.
We are safe until at least January 1, 1998, when the next version
may be published. We are not aware of any looming problems, but
we will continue to watch this policy carefully.
The NCCI is the codification of the Medicare "rebundling"
rules. Before it went into effect on January 1, 1996, ASA successfully
sued the Medicare administration to prevent the bundling of invasive
monitoring lines with anesthesia services.
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