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ompliance with Medicare’s payment policies is not always easy even with the best intentions. Many of the rules that anesthesiologists must follow in order to submit claims for payment have very little to do with quality or efficiency. They don’t even seem logical when applied to certain scenarios: Why, for example, is it legitimate to bill for a labor epidural while one is medically directing a surgical case but not for a postoperative pain epidural?

The point of this month’s column is not to lead the way through the Medicare payment rules, other than to remind readers that the objective of the rules that particularly trouble anesthesiologists is to prevent Medicare from paying you twice for the same time. Working in the care team mode, it may be safe for an anesthesiologist to perform preoperative evaluations, for example, while supervising the care of an anesthetized patient in an operating room (O.R.) with an anesthesiologist assistant 30 feet away, but the Medicare system isn’t about maximizing the number of services you can provide simultaneously.

Rather, the point to be made here is that even anesthesiology groups that diligently enforce serious compliance programs may not be able to avoid filing claims for more than the amount allowed by Medicare. When the overbilling appears systematic and more than a few hundred dollars are involved, the practice needs to consider whether reporting itself to the Department of Health and Human Services Office of the Inspector General (OIG) is the best strategy. One large group in the Pacific Northwest did successfully self-report last year and told the story through a presentation by their chief executive officer at the annual Medical Group Management Association (MGMA) Anesthesia Administration Assembly (AAA) meeting held in Tampa, Florida, in March 2006. A summary follows.

Discovering the Error
As part of its billing compliance program, the 200-physician group had begun conducting internal audits of its billing at 17 practice locations in 2000. In 2001 the group developed its own audit check list and trained its first physician compliance officer. The role of this anesthesiologist was to become critical in managing a major excess-billing situation several years later: As a peer, he was very effective in helping his fellow physicians in the group make and implement difficult decisions.

In 2002 the internal audit process identified Dr. X as an outlier. It appeared that he was reporting an unusually large amount of time with patients in the presurgical area. The audit was expanded to determine the reason why. Dr. X would start the anesthesia time clock running after he initially saw a surgical patient in the O.R. suite and then go to perform a pain medicine procedure on another patient before inducing his first patient, all the while running the anesthesia time clock on the surgical case. This form of overbilling, we should note, was particularly difficult to detect because there were no concurrency issues, and the pain procedure did not involve billed time.

The group continued to plow through information and came to the conclusion that the systematic billing for anesthesia time while Dr. X was performing services for other patients was not a mere administrative error. The overbilling seemed willful, and the compliance team was forced to consider that it might amount to fraud. Dr. X left the group and hired his own legal counsel.

Choosing the ‘Voluntary Disclosure’ Option
Once a practice has determined that one or more of its members may have committed Medicare fraud (knowingly filing a false claim), damage control becomes the issue. Is it a good idea to use the OIG’s formal voluntary disclosure protocol? If you do, and the overbilling has been intentional, financial liability is certain. That is the only guarantee — protection from disclosure is a serious risk, since the practice’s information is potentially available to the Department of Justice and private litigants. A whistleblower, for instance, might have access. Exclusion from the Medicare and Medicaid programs is a possibility, and even if the dollar loss would be tolerable, loss of hospital privileges would not.

On the other hand, there are considerable advantages to bringing the problem to the OIG. The group described above felt first and foremost that going to the OIG was the right thing to do. The group also believed that the advantages outweighed the risks and also that the government might uncover the excess amounts billed without the group’s help. The amount of the overbilling was large ($240,000 by agreement with the OIG), and it could have triggered much greater penalties than the $120,000 fine imposed. This was the minimum fine that the OIG was permitted to collect, and it reflected the group’s cooperation. It also was covered by the group’s Errors and Omissions insurance policy.

The group knew that it could show a strong commitment to compliance based on the rigorous program that it had had in place for several years, even though one physician managed to avoid discovery for some time. Both its existing program and its actions and attitude throughout the OIG investigation contributed to its ability to avoid the imposition of a “Corporate Integrity Agreement” (CIA), a very onerous, ongoing self-auditing and reporting program mandated by the OIG to prevent future instances of the form of fraud that gave rise to the CIA.

Following the OIG’s “Provider Self-Disclosure Protocol” is itself a serious commitment. It begins with a letter to the Assistant Inspector General for Investigative Operations describing in some detail the problem being disclosed. It involves an internal investigation that satisfies OIG guidelines for spelling out the nature and extent of the problem billing as well as the circumstances of its discovery and the practice’s response. The amount of overbilling must be estimated through a self-assessment for which the practice submits a work plan to the OIG, who will work with the practice to define the sample design and estimation methodology.

The group in question conducted its investigation and financial self-assessment with guidance from the OIG and as a result obtained a “Certificate of Compliance” from the OIG — the only provider ever to do so. The certificate required 1) continued implementation of the group’s compliance program, 2) reporting and repayment of overpayments made by federal governmental programs and 3) continued cooperation with the OIG.

It is possible that the group’s attempts to refund money to private payers for improper claims submitted by Dr. X influenced the OIG not to impose greater penalties. The Medicare authorities cannot require physicians to follow Medicare payment policies in doing business with private payers. Any obligation to follow the Medicare concurrency rules, for example, or to stop the clock if the anesthesiologist engages in other activities while providing an anesthesia service would have to be in the participation contract between the anesthesiology group and the payer. This group’s voluntary efforts to make refunds to its private payers — which did not even have a mechanism for accepting the money — may nevertheless have made a material difference to the outcome of the investigation conducted with the OIG.

Joy Ketchum, the group’s CEO who spoke at the Tampa meeting, noted that many of the anesthesiologists expressed satisfaction at seeing that their investment in a superb compliance program had paid off.

Lessons Learned by the Group

The voluntary reporting protocol is not simple, and there may be other parties to whom the practice owes refunds. Involve experienced legal counsel from the beginning. They can help you to make an informed decision whether to talk to the OIG, and ideally they are on good enough terms with prosecutors to seek their informal opinions on whether and where the practice should report its own possible violations, without revealing the identity of the practice.

Concluding the presentation, Ms. Ketchum added some overall strategic advice:

That said, we hope that you will never need to refer back to this column.