Providers Respond to Holder, Sebelius on ‘Troubling Indications’ of EHR Fraud

By Mike Miliard, Managing Editor, Healthcare IT News

WASHINGTON – Hospital organizations are responding to a stern letter sent Sept. 24 by U.S. Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, which warns against using electronic health records to artificially inflate Medicare and Medicaid payments.

The letter – sent to the American Hospital Association, the Association of Academic Health Centers, the Association of American Medical Colleges, the Federation of American Hospitals and the National Association of Public Hospitals and Health Systems – expresses concerns over “troubling indications” that some hospitals are using EHR technology to “game the system, possibly to obtain payments to which they are not entitled.”

As evidence, Holder and Sebelius point to “potential ‘cloning’ of medical records in order to inflate what providers get paid,” and cite reports that hospitals may be using EHRs “to facilitate ‘upcoding’ of the intensity of care or severity of patients’ condition as a means to profit with no commensurate improvement in the quality of care.”

The letter reminds the hospital associations that, “False documentation of care is not just bad patient care; it’s illegal.”

The Centers for Medicare and Medicaid Services (CMS) is “specifically reviewing billing through audits to identify and prevent improperly billing,” write Holder and Sebelius, and is “initiating more extensive medical reviews to ensure that providers are coding evaluation and management services accurately.”

The Department of Justice, the FBI and other agencies “are monitoring these trends, and will take action where warranted,” they add, noting that new tools provided by the Affordable Care Act authorize CMS to mine data to detect fraud.

Rich Umbdenstock, president and CEO of the American Hospital Association (AHA), responded in a letter sent to Sebelius and Holder that his organization agrees that cloning and upcoding “should not be tolerated.” But he also pleaded for more specific guidance from CMS.

Umbdenstock wrote that EHRs “hold great promise for improving the efficiency and effectiveness of care” and also enhance hospitals’ “ability to correctly document and code the care a patient has received.”

He added, however, that, “It’s critically important to recognize that more accurate documentation and coding does not necessarily equate with fraud.”

CMS payment rules “are highly complex and the complexity is increasing,” Umbdenstock wrote. “We have made numerous requests to [CMS] to develop national guidelines for the reporting of hospital emergency department (ED) and clinic visits. This is a request that the AHA has made to CMS 11 times (starting in 2001) since the outpatient prospective payment system (OPPS) was first implemented.”

For the past dozen years, hospitals have been using the American Medical Association’s Current Procedural Terminology (CPT) evaluation and management (E/M) codes to report facility resources for clinic and ED visits, Umbdenstock added. But he pointed out that, since “E/M descriptors … did not adequately describe the range and mix of services provided in hospitals,” CMS told hospitals to draw up internal guidelines to reflect the level of clinic or ED services provided.

In 2003, the AHA recommended that CMS implement national hospital E/M visit guidelines, “based on the work of an independent expert panel comprised of representatives with coding, health information management, documentation, billing, nursing, finance, auditing and medical experience,” wrote Umbdenstock, adding that, in the 2004 and 2005 OPPS rules, CMS said it would consider the panel’s recommendations.

“However, to date, CMS has not established national hospital E/M guidelines,” he wrote.

Likewise, for the coming year, “CMS proposes that, until national guidelines are established, hospitals should continue to report visits according to their own internal hospital guidelines to determine the different levels of clinic and ED visits,” Umbenstock wrote.

“The AHA has long called for national guidelines for hospital ED and clinic visits, and we stand ready to work with CMS in the development and vetting of such guidelines,” he wrote. “Once national guidelines are developed, we recommend that a formal proposal be presented to the AMA’s CPT Editorial Panel to create unique CPT codes for hospital reporting of ED and clinic visits based on the national guidelines. These codes then could be widely reported by hospitals to all payers.”

In another letter, dated Sept. 25, Steven Wartman, MD, president and CEO of the Association of Academic Health Centers (AAHC), wrote, “It goes without saying that AAHC and our members do not condone fraud.”

But he too called for “clarification on evaluation and management services coding” from CMS.

AAHC concerns about a lack of useful guidance on the coding of evaluation and management services “have only been exacerbated by the increased uptake of electronic health records and the rapid changes in the delivery system necessary to accommodate more sophisticated technology,” wrote Wartman.

Responding to CMS’ plan to initiate more extensive audits to evaluate coding procedures and identify instances of improper billing, he wrote that AAHC “fully supports and understands the need” for such initiatives, but expressed concerns with regard to the “system of incentives for and oversight of” Medicare recovery audit contractors (RACs).

Wartman said AAHC “applauds the efforts of CMS’ Center for Program Integrity to develop risk-based assessment tools for the prevention of fraud, waste and abuse, and hopes that those efforts can be expanded to the work of the RACs.”

EHRs hold huge potential to “increase patient safety, quality of care, and efficiency,” Wartman wrote, “and AAHC is interested in working to maximize the opportunities EHRs afford the healthcare system and patients while minimizing the possible negative outcomes of using these tools.”