By Susan F. Dubow, Esq.
Physicians should expect stricter contracts from their billing companies in the wake of The Health and Human Services Office of Inspector General (OIG) model Billing Compliance Program for billing companies issued late last year.
The OIG Compliance Program makes billing companies responsible for identifying and uncovering billing problems, reporting physicians’ improper conduct and clarifying the billing companies’ and physicians’ relative responsibilities. By focusing the billing companies’ attention on these areas, the OIG Compliance Program has also forced the billing companies to substantially amend their existing contracts.
Identified Risk Areas
The OIG identified 17 specific risk areas as particularly appropriate for compliance focus, all of which potentially violate Medicare and Medicaid laws. These problematic billing arrangements are instructive for physician groups developing their own compliance programs. Among the risk areas listed by the OIG are the following.
Billing for items or services not actually documented. While proper documentation is the responsibility of the health care provider, the OIG advised that the “coder should be aware of proper documentation requirements and should encourage providers to document their services appropriately.” Proper documentation can include any one or more of the following:
• Reason for the patient encounter.
• An appropriate history and evaluation.
• A documentation of all services.
• An ongoing assessment of the patient’s condition.
• Information on the patient’s progress and treatment outcome.
• A documented treatment plan.
• A plan of care.
• Changes in the treatment plan.
• The medical rationale for the services rendered.
• Documentation that supports the standards of medical necessity.
• Abnormal test results.
• Identification of relevant risk factors.
• Documentation that meets the E&M codes billed.
• Medical records that are dated and authenticated.
Unbundling. This practice occurs when separate billing codes are used for services that have an aggregate billing code, thereby resulting in excessive payment to the provider.
Upcoding. As the OIG indicated, this has been a major focus of their law enforcement efforts. Upcoding refers to the use of a billing code that provides a higher reimbursement rate than the billing code that actually reflects the services furnished to the patients.
Inappropriate balance billing of Medicare beneficiaries. Billing Medicare beneficiaries the difference between the provider charge and the Medicare Part B allowed payment is not permitted.
Inadequate resolution of overpayments. Overpayments refers to the “improper or excessive payment” made to a physician for which a refund is owed. The OIG’s Compliance Program encourages the billing companies to put in place procedures for timely and accurate reporting of these overpayments.
Knowing misuse of provider identification numbers which result in improper billing. For example, it often takes two to six months for a practice to obtain a provider number for a new physician and some billing companies had utilized another physician’s provider number to bill for services rendered by the new physician. This is a fraudulent billing practice and will be monitored more closely by billing companies in the future. Also, billing companies and physicians will need to be more cognizant of the Medicare reassignment provisions.
Outpatient services rendered in connection with inpatient stays. Billing companies need to be more conscious when submitting claims for non-physician outpatient services that were already included in the hospital’s inpatient payment so that they do not, in effect, submit duplicate claims.
Duplicate billing in an attempt to gain duplicate payment. This can occur when multiple claims are submitted either to the same payor for the same service or to more than one primary payor at the same time.
Billing company incentives that violate the anti-kickback statute or other similar state or federal statute or regulation. The OIG cites, for example, that billing companies which provide marketing services on a percentage basis may run afoul of the anti-kickback statute, as recently analyzed in an OIG Advisory Opinion. The OIG is concerned that percentage-billing arrangements may increase the risk of upcoding since higher billings result in higher billing fees to the billing company.
Routine waiver of copayments and billing third-party insurance only. Billing companies need to encourage providers to make a good-faith effort to collect copayments, deductibles and non-covered services from all insured patients. Billing insurance only can violate the False Claims Act, the anti-kickback statute and the civil monetary penalty laws.
Discounts and professional courtesy. Although many physicians have a long standing policy of offering professional courtesy or discounts to certain patients, this policy is not necessarily appropriate unless the entire fee, and not just the private portion, is discounted.
Billing Company’s Reporting Obligations
Citing the billing companies’ “unique position to discover various types of fraud, waste, abuse and mistakes on the part of the provider,” the OIG Compliance Program obligates the billing company to report physician misconduct to the government. Specifically, the OIG recommends the following.
If the billing company finds evidence of misconduct on the part of the provider, it should refrain from submitting the questionable claim and notify the provider, in writing, including specific information and their rationale, within 30 days of its determination. Misconduct here does not include inadvertent errors or mistakes.
If the billing company discovers “credible evidence of the provider’s continued misconduct or flagrant, fraudulent or abusive conduct” the billing company should (a) refrain from submitting any false or inappropriate claims; (b) terminate the contract; and/or (c) report the misconduct to the appropriate state or federal authorities within a reasonable time, but not more than 60 days after determining that there is credible evidence of a violation.
To address the OIG’s concerns, billing companies are implementing their own compliance plans and amending their billing agreements to detail more meticulously the relative responsibilities of the physician group and the billing company and to carve out relative areas of liability. For example, in addition to standard clauses detailing financial arrangements and turnaround times, the new billing contracts identify which party is responsible for verifying codes, which will be liable for each type of misconduct, what matters will be contained in the billing company and in the physician group’s compliance plans, and what standards of practice and policies on credit balances and write-offs will be employed.
Physician practices need to be careful to assure that the billing agreements they sign appropriately identify the relative responsibilities and liabilities of the parties, and that the billing company Compliance Plan is properly aligned with the physician group’s own Compliance Plan.
Susan F. Dubow, Esq., is a vice president and shareholder with Kalogredis, Tsoules and Sweeney, Ltd. in Wayne, Pa.