EDITOR’S NOTE: Please read the companion article by David Glaser, Esq. in this edition.

In a recent edition of Nina Youngstrom’s newsletter, Report on Medicare Compliance, she reported that Cedars Sinai Medical Center in Los Angeles, the “hospital to the stars,” paid a nearly $900,000 civil monetary penalty for the actions of a single physician. Reportedly, this physician coded many of his or her visits using time instead of the laborious task of calculating codes based on the elements of the history, physical, and medical decision-making.

Using time is allowed as long as over 50 percent of the time spent with the patient is in counseling and coordination of care. Coding guidelines provide time requirements for such coding; as an example, a high-level subsequent hospital visit, 99233, requires a total of 35 minutes.

The guidelines also require the total time spent to be documented in the medical record. Using time to code is common in many specialties, such as oncology, for which treatment planning requires a great deal of shared decision-making between the patient and the physician, but it should not constitute the majority of visits in any specialty.

This report is especially interesting in that the hospital appears just to have paid back 100 percent of the professional fees collected on behalf of the physician, making no effort to separate out those related to upcoding from those that were properly coded. It is unlikely that every single visit was coded using time, so those visits coded using the traditional method would not necessarily be considered improperly coded. Furthermore, the physician was a thoracic surgeon, and the statements quoted by Ms. Youngstom suggest that all professional fees were refunded – and that would include fees for performing surgery, whereas coding is based solely on the procedure performed and unrelated to time.

This refund was made as a self-disclosure, meaning the hospital found the errors and reported its findings to the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG); the errors were not found as the result of an audit performed by the OIG or any other governmental audit agency. It is unclear if this decision to refund all the professional fees was made by Cedars Sinai on its own or after discussion with the OIG following the self-disclosure, and there is no indication that this sets a precedent of any type. But hospitals or health systems that employ physicians nonetheless should take note of this settlement, consult their legal counsel, and determine what type and frequency of auditing of physician coding is right for their institutions.

This report was published barely a week after the OIG issued a report on a routine audit of Greenville Memorial Hospital in South Carolina. In that audit, the hospital was found to have improperly billed for evaluation and management physician services provided in the post-operative global period, where all related services by the same physician group are bundled into the surgical fee. The audit also cited improper use of modifier -59, indicating a separate, distinct service listed as another service performed the same day.

Most OIG audits focus on hospital billing of facility services such as diagnosis-related group (DRG) coding, units of service billing, inpatient versus outpatient status determinations, device credits, and so on, but it seems that the OIG is adding to its to-do list any billing submitted by hospitals for employed physicians. And to really show the importance of proper and thorough documentation, Grenville had to pay back $49,000 for a single dose of chemotherapy because the nurse forgot to document that the dose was actually administered. The hospital even submitted a sworn statement from the nurse that the drug was actually administered, and several anecdotal statements indicating the same, but the OIG did not accept it.

So, what should hospitals do? If you employ doctors, you need to audit their billing. The Centers for Medicare & Medicaid Services (CMS) recently finalized its 60-day self-disclosure rule, and it is beyond my expertise to determine how findings on a routine audit of employed physicians fit into the requirement to report overpayments within 60 days. Do routine audits fit into this policy, or does it apply only when “intentional” overcoding is suspected and audited? Does the 60-day clock start when the first overcoded chart is found, or when the audit is finished? These, and many other questions, are within the domain of a healthcare lawyer – such as David Glaser, Esq., for example, who has written a complementary piece to this one.

As hospitals and health systems continue to acquire physician practices, these practices open up a whole new world of compliance risk. If a hospital is hiring physicians who have already been in practice, the hospital would be wise to review the physicians’ past billing data as part of its due diligence and look at their evaluation and management code distribution to see how it compares to other physicians and benchmark data, such as that available from AAPC. They also should review the publically available Medicare data that has been posted by the Wall Street Journal and ProPublica.

While past performance may or may not be an indicator of future compliance problems, if nothing else it will help you determine where additional education and oversight might be needed.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians.

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