By John B. Reiss, Ph.D., J.D. & R. Michael Kemler, J.D., LL.M.
Physicians treating Medicare patients in private clinical practice and billing Medicare for their services may feel quite comfortable. Most do not conceive they could be doing anything wrong when they submit a bill. Most think their patient charts are detailed and comprehensive, and support the medical necessity of the diagnostic and treatment procedures provided to the patient. The federal government, however, may not think so! The Medicare program, through its carriers is conducting audits of medical practices to examine the medical necessity of services provided and to assess the appropriateness of the level of claims billed by the physician.
There is a federal statute, the False Claims Act, which prohibits knowingly making or causing to be made a false claim or a false statement to get a false or fraudulent claim paid or approved by the federal government. The statute carries an intriguing definition of “knowingly.” It defines knowingly to mean that a person has “actual” knowledge of the (false) information, acts in “deliberate ignorance” of the truth or falsity of the information or acts in “reckless disregard” of the truth or falsity of the information. As to “reckless disregard,” no proof of specific intent is required, so a continuing series of mistaken billing may be sufficient to meet this standard. The statute provides that violators are liable to the government for a civil penalty of not less than $5000 nor more than $10,000 per claim made, plus three times the damages the government sustains from the violator’s acts, subject to amelioration of penalties in certain circumstances.
There are certain considerations that make the False Claims Act a present and distinctive risk to, and a concern for, physicians in private clinical practice. First, the Medicare Trust Fund is depleted, and the federal government wants to recoup any funds it can through both cost-containment and false claims actions. Second, the government believes there is pervasive fraud in the health care industry. Third, as physicians in clinical practice aggregate in group practices (among other reasons, to cope more effectively with HMOs) the aggregation, and resulting larger volume of Medicare office visits and procedures, renders the practice a target for false claim investigation and action.
The most effective preventive risk management program for physicians is to maintain patient records from which anyone (including non-clinical personnel) can determine what services were provided to the patient, and to properly code the bills derived from those patient records. Successful coding requires detailed familiarity with the resource based relative value scale (RBRVS) methodology for physician compensation, adopted by Medicare in 1992 and replacing UCR-based reimbursement. Conversely, a physician’s checking-off line items on an office “superbill,” without ensuring that the patient’s medical record describes and supports the billing for the checked items—including demonstrating the medical necessity by reporting the appropriate ICD-9 diagnosis—is a recipe for disaster.
RBRVS payments are conditioned on identification of the patient’s health problem and the appropriate treatment of that problem. The payment system uses two sets of codes: ICD9 to identify the patient’s pathology, and CPT4 to code the physician’s treatment of that pathology.
The medical necessity of the patient’s care is predicated on the presence of one or more diagnoses. These are shown on the bill by reporting the relevant ICD9 codes. The physician’s care, the services medically necessary to treat the patient’s diagnoses, is reported by use of the appropriate CPT4 codes. The documentation in the patient’s medical record must report the diagnoses, or the relevant signs and symptoms, and must provide sufficient detail about the services provided to the patient (appropriate to the listed diagnoses) to fully justify the level of care billed. These documentation requirements are necessary for identification of the medical, diagnostic or surgical procedure provided to the patient, and to support the evaluation and management (E&M) code used to bill for the complexity of the care provided. Also, the medical record should be completed by physicians in a timely manner, dated, and timed.
The identification of the diagnosis, or diagnoses, for a patient can be complex, especially in differential diagnosis. It may take significant examination and testing for a physician to identify even a non-life threatening or simple diagnosis. Because the levels of complexity in most instances depend on the severity of the presenting symptoms, or the illness or injury, these events of care may not always be billed at the highest E&M levels despite the time taken. While there are “prolonged patient care codes” which may be used under certain circumstances, the first key to the level of care which can be billed is the diagnosis (or diagnoses for more complex cases).
The documentation of diagnoses—so the proper ICD9 code can be reported—is straightforward. Documentation should contain the presenting signs and symptoms, and report the diagnosis(es) determined by the treating physician, as supported by the various examinations and tests performed. If the physician cannot identify a specific diagnosis, the medical record should establish the signs and symptoms which led the patient to present for care, and the various tests and examinations provided to the patient. If expecting to bill a complex visit, a physician should never write “rule out” in the medical record without explaining the signs and symptoms, identifying the tests provided or other resources used, and the reasons for them.
The billing for the care provided to the patient depends on a number of factors. There are different codes for inpatient and outpatient care. There are different codes for initial patient visits and established patient visits, for consults, follow-up consults and confirmatory consults.
There are two broad classes of billing codes, which are documented in different ways. These two classes are the surgical, medical or diagnostic procedures, described by various Procedure codes, and the cognitive services, described by the E&M codes.
The Procedure codes are straightforward and describe the particular procedures involved. However, the listing of a Procedure in the CPT4 book does not mean all, or even any, insurors or third party payors necessarily pay for it. Furthermore, various insurors and third-party payors frequently require the bundling of Procedures which are described separately in the CPT4 book, and which may be documented separately in the record. Obviously, when bundling is required, the individual Procedures may not be billed separately. Similarly, global surgery billing may raise issues with respect to the follow-up care provided to a patient within the global period. Surgeons who charge the full global fee should be sure to provide all medically necessary follow-up care required during the global period.
Payment for the E&M codes is associated with different degrees of complexity of care. An outpatient visit may be billed at one of five levels of complexity, whereas an inpatient visit may be one of three. Consults also can be billed at different levels of complexity, and there are different types of consults. It is important that the elements of the visit be described so as to accurately report the level of complexity of the physician’s care, which then can be transformed into an appropriate billing code.
The complexity is reported by use of three Key Components: the personal, family and social history, the physical examination and the physician’s medical decision making. Time ordinarily may not be used to supplement the three Key Components, but may be used under special circumstances. In order to bill any care during an initial visit, all three Key Components must be provided by the physician and must be documented in the patient’s record. For subsequent visits, only two of the three Key Components have to be provided and documented. Billable services provided by teaching physicians in teaching settings are subject of additional rules, not discussed further.
The level of complexity of a billable event, based on the three Key Components, is determined by the degree of difficulty of treating a patient within those Components. Each Key Component contains four levels of difficulty. For initial visits, all three of the Key Components must support at least the minimum level of billing. Higher levels of billing require support from all three Key Components. The diagnostic findings must be consistent with the care provided. Thus, a simple diagnosis will not support billing for a highly complex level of care. For subsequent visits, only two of the three Key Components have to be at the appropriate difficulty to support the level of billing. However, if the history is not repeated, the chief complaint must continue to be recorded in the medical record to support bills submitted for subsequent visit payment. Similarly, an initial consult must be supported by all three of the Key Components. While follow-up consults may be performed with only two of the three Key Components present, such consults must be ordered by the patient’s attending physician or the visit will be considered to be continuing care by the consulting physician, and can be billed only as a subsequent visit.
Time can be used only under limited circumstances. It can be used for Counseling and Coordination of Care, involving discussion with a patient or the family concerning diagnostic results, prognosis, risk and benefits of management options, instructions for patient management and patient compliance. Counseling must involve more than fifty percent of the time, must be face to face for outpatients, or time devoted specifically to the patient if inpatient. The time spent must be shown in the record.
Time also can be used for critical care billing. Critical care requires patients to be unstable and critically ill or injured who, as a result, require constant physician attendance. The location of the patient is unimportant. Because a patient is in a critical care unit of a hospital does not mean that he or she meets the definition required to bill for critical care. Similarly, a patient may require critical care even if he or she is not in a critical care unit. The time during which a physician provides critical care to a patient does not have to be continuous. It may be accumulated over the course of a day. The accumulated time must be spent providing services to the patient for whom the bill is rendered. Critical care billing requires more than thirty minutes of accumulated time.
The complexity of billing for physician’s services under Medicare, with payment edits and coding requirements changing every few months, means that accurate chart documentation and abstraction are extremely important. Optimally, the practice physicians themselves should understand the RBRVS, as well as the practice administrator. To avoid billing problems, all physician practice groups should put in place a mechanism for ensuring compliance with the billing rules. At a minimum, this approach should include an education program, periodic spot audits of bills before they are submitted (so they can be corrected), a hot line for reports of improper or erroneous practices, and the appointment of a person responsible for the compliance program.
John B. Reiss, Ph.D., J.D., is chairman of the Health Law Department of Saul, Ewing, Remick & Saul in Philadelphia, and was previously director, Office of Health Regulation, Department of Health and Human Services, and assistant commissioner of health in New Jersey. R. Michael Kemler, J.D., LL.M., is a practicing health lawyer in Philadelphia, and former member of Office of the General Counsel, U.S. Department of Health & Human Services.