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When conservatives call for cracking down on medical fraud and abuse and call that HCR, they are ignoring the fact that the Obama administration is doing just that, successfully cracking down on Medicare fraud. They are also cracking down on over payments, but you aren't seeing many Republicans celebrating this victory. As good as this news is; Medicare auditors aren't following coding rules and guidelines in identifying over payments and that's bad.

I call it greed based recovery because the auditors are paid on a  contingency basis (a bounty for every found error).

Is there no area of health care in the United States that isn't driven by greed?

Imagine getting dinged for an audit finding only to find out your staff did everything right and followed every rule. The patient had an out of control medical condition and symptoms that required an intensity of services that warranted admission and some pencil neck says otherwise. Do you Appeal or not?

Recovery Audit Contractors known as RAC audits tend to freak out health care administrators. The thing is, you have to trust your employees to follow the coding and billing rules and they usually do. It's just that sometimes things can go wrong for the wrong reasons.

Maybe these auditors are seeing through a snow job.

Our health care finance system is based upon how well a physician documents the need for any medical service. To that end, some physicians study what combination of diagnosis codes and how they describe the patient's condition in the medical notes that will increase their insurance reimbursements from specific insurers. Medicare and other insurers have web sites where you can go and see how to document certain types of claims. Most physicians follow these guidelines, some exploit them. Some companies are finding ways to limit the damage, but the results can be counterproductive. Likewise, CMS is changing how they look at medical records. They are moving from a position of blind acceptance to query the logic behind the treatment plan.

Medicare auditors are ratcheting up the intensity and are looking under the hood, so to speak. It's no longer enough to check for crossed T's and dotted i's; RAC auditors are looking at the logic behind the medical decision making. That's giving doctors and compliance officers alike, the willies.

It's a little troubling to see that RAC auditors are disregarding coding guidelines and standard treatment guidelines when they declare some claims medically unnecessary. Some auditors are denying the validity of a diagnosis because they don't have a lab test or scanned image that confirms the diagnosis. This article is upset that RAC auditors are actually disputing physician assigned diagnosis codes and I'm concerned about that too. The gold standard is: the diagnosis is what the physician says it is and go with it. Jollying a doctor through compliance is a ticklish proposition any day, but if part of my compliance work becomes making sure the doctor's diagnosis assignments are warranted; I'm not sure I want to be part of that fireworks display.

It's one thing to make sure the medical records are there and properly filled out and I'm fine with double checking coding assignments for adhering to coding and Medicare guidelines. What I'm not comfortable with is making sure the chart notes show the logical progression from symptomology and history through the testing and decision making all the way to the physician's final assessment of the diagnosis. One consultant laments:

Audits, it seems are going deeper than the usual documentation expectations.


"Now it's 'what was the diagnosis, what was the history, what tests were run, what decisions were made in terms of the procedures performed, and was it consistent with Medicare requirements?'"

Plus, it seems I'll also have to check to make the diagnostic reports agree with the actual images? Oy! Just kill me now?

In short, the answer is yes. I wrote about Dr. Medei, a Baltimore cardiologist who was declaring in his op reports that arteries were 80% blocked, but the actual images showed only 30% occlusions. He had a clear pattern of making these "errors" and after a while it was millions of dollars of unnecessary care. People working with the Dr. Medei had to have seen him make errors in reading the images and didn't say a word. They should have and they should have said it before 500+ stents were unnecessarily inserted into unsuspecting patients. Despite Dr. Medei and others like him I'm not sure I can medically justify the need for a radiologist to render a second opinion on every medical image a physician uses to determine their treatment plans.

Identifying Medical Fraud

Some fraud surveillance is focused on sifting through the data. In the past, Medicare did a poor job of this. The data was there, but they didn't mine it. Medicare fiscal intermediaries blithely paid claims and said ooops when the fraud became too blatant to ignore. Slamming the gate shut after the woozles get loose is never an effective strategy, unless your goal is to get a good cardiac workout chasing down the woozles. Computerized surveillance does identify fraud and abuse, but it hasn't been used until now. It looks like Recovery Audit Contractors (RAC), RAC-like auditors, Medicare administrative contractors (MACs) and Medicare quality improvement organizations (QIOs) are using statistical outliers from claim data to zero in on fraud targets, which is probably a good idea.

The WSJ did a brave thing the last week of December 2010 and wrote about how sifting Medicare claim data identified some physicians for fraud investigations. Unfortunately, our fragmented health care system allows a lot of wasteful medical expenses fly under the radar. Medicare, at best, covers only 20% of our population. That leaves 80% clear to exploit.

One Florida doctor had a statistically impossible incidence rate for brachial neuritis. There are only about 3,000 people in the U.S. who has brachial neuritis, but apparently, 600 (or so) of them go to this one doctor for treatment. I can't fault this doctor's staff or billers for not detecting this one. I'm not sure it would occur to them to check the incidence rate of brachial neuritis. Then again, this data sifting only identified Medicare claims. How many private insurers paid for misdiagnosed brachial neuritis too? Another thought is why get so specific, the doctor could have simply said the patient had neuritis to justify the physical therapy with a nerve conduction test result to back it up.

Another Florida physician sold his medical practice because of over prescribing physical therapy for Medicare recipients. The average elderly person would benefit from a weekly massage and hot or cold packs, but so would too. That doesn't mean a weekly massage is medically necessary. We complain about health care policies covering too little physical therapy, but in view of how Medicare was bilked by this and other doctors, can we really get upset with a private insurer who limits PT to 3 times a week for 6 weeks or $1,500 annually?

The downside to the WSJ story is that Medicare paid out over $10 million over 3 years to these physicians before they turned off the money spigot. It made me wonder how much more they could have recovered if they id'd more wrong doing and done it earlier.

The other downside to the WSJ story is that it doesn't wonder if private insurers or if underinsured and uninsured people are getting ripped off too. Usually, I write about the big bad insurer giving a sick patient a hard time, but when I run across medical fraud, I wonder if ther are getting "took" too.

The Appeal of filing an Appeal

Some people would rather go to the dentist than file an Appeal for a RAC audit finding, but it's a good idea if the facts are on your side. About 8% of RAC findings were appealed last year and about 64% of the appeals were overturned. Unfortunately, that means over 90% of the RAC findings were upheld. Some of these audit findings are mind boggling:

In fact, the top overpayment finding from the RACs so far involves DME, Casey says. RACs are finding various errors, such as DME billed for beneficiaries after their date of death and DME billed for beneficiaries while they are inpatients.

I realize a CPAP machine (used to treat sleep apnea) would probably go with the patient to the hospital, but under those circumstances, the hospital is supposed to pay the DME (durable medical equipment) claim for the rental of the machine, not Medicare's DMERC fiscal intermediary. Billing for a hospital bed for the patient's home while they are in the hospital isn't going to fly. (Despite the inconvenience and expense of removing the hospital bed and then reinstalling it after the patient's discharge.) Billing for a patient after they died is hard to defend, but I can see how a DME dealer wouldn't get notified of a patient's death in a timely manner. Keeping the money for a claim billed for services or products rendered after the patient died, however, is inexcusable.

Getting Out of the Insurance Game

RAC audits and audits from other insurers might be another reason some doctors are getting out of the insurance game. It's too much stress. Government insurance plans require an accountability that private insurers don't. The thing is that in our multi-tiered health care system, what is fraud under government insurance is only abuse for private insurance and no one cares if the uninsured get taken for a ride at all. Fraud can put you in jail (or not), the other will probably go undetected. Maybe private insurers will demand refunds from the doctor, but it's more likely that there will be a rule change from a specific date going forward. The uninsured have only their good sense to determine if they are getting good value for their money. No one is going to fight for them; at least not directly?

One auditor told me that they like to compare the orders for Medicare patients with uninsured people with the same condition, but they rarely get the opportunity to do so. If the patients with different insurance have similar treatment, that's fine; but if patients with more generous insurance plans get more generous treatment, that indicates a need to dissect the physician's medical decision making. That was a major point in the case against Dr. Midei, he only made image reading errors on insured patients. No charity care or uninsured patients got unnecessary cardiac stents, but that finding came very late in the case. A single payer system where all the claim data is in one repository would make identifying over ordering and over prescribing easier to detect. As it is, with over 3,000 health insurers in the U.S. and HIPAA no one can justify sifting through the clearing house data to see who the culprits are. Pushing aside the Big Brother concerns for now, until we see the big picture of each physician's utilization patterns; a lot of medical fraud, abuse and wasteful utilization won't be detectable, let alone actionable. It's effectively hidden by the fractured 3rd Party Payer system.

Another auditor told me they look for consistency in medical decision making between Medicare patients with the same condition, but with and without Medigap policies. Do they get the same amount of care?  If they don't, then is the one with "better" insurance getting more procedures? If they are, then they fine tune their audit targeting to recapture over payments. They also look at the coding decisions for consistency. Are two patients with the same conditions and the same services getting the same diagnosis codes and the same DRG? If not, why not? It looks like that's how a lot of auditors are fine tuning their targeting. The thing is RAC auditors get paid a percentage of the over payments they accurately find, but they don't consistently follow Medicare guidelines when they dispute items. These RAC audits are chasing good doctors (along with the bad) out of taking Medicare patients. Audits are stressful and I can imagine a doctor saying, "Chuck it! I'm done dealing with that! No more!"

The Republican Majority House Misses the Point

Most of the people in the political world are focused on PPACA the symbolic attempt to repeal it and the changes that took effect this year and those that will take effect in 2014. The majority of the House keep calling for tort reform and reigning in fraud and abuse; but that's not going to make much of a dent in a total expenditure of $2.5 trillion. The Obama administration's aggressive stance on recovering overpayments by government insurer's is largely unheralded by Republicans despite it bringing in over $20 billion in just one year (and predictions are that this annual figure is going to a a few short years). That's more than what tort reform will do. That's more than what the small business 1099 BS provision is going to bring in. ...and it's only applying to government insurance carriers. That leaves those with private insurance or no insurance to be exploited (provided those without insurance have the money to buy the care they need).

Too bad all medical care isn't subject to RAC audits?

No, not a good idea.

On second thought, maybe if they get tweeked a little....

Originally posted to JDWolverton on Wed Feb 02, 2011 at 10:28 AM PST.

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