Health Information Management

News: CMS warns hospital associations against EHR-related fraud

CDI Strategies, September 27, 2012

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In a terse exchange of communication and reports this week, the HHS and American Hospital Association (AHA) addressed allegations that increased use of electronic health records may lead to increased amounts of Medicare billing fraud.

“[T]here are troubling indications that some providers are using [electronic health records] to game the system, possibly to obtain payments to which they are not entitled,” said HHS Secretary Kathleen Sebelius and US Department of Justice Attorney General Eric H. Holder, Jr., in a letter to five hospital associations, Monday Sept. 24.
The letter came in response to a New York Times article “Medicare Bills Rise as Records Turn Electronic,” published on its front page last Friday, Sept. 21. Receiving the letter were the following associations:
  • AHA
  • Federation of American Hospitals
  • Association of Academic Health Centers
  • Association of American Medical Colleges
  • National Association of Public Hospitals and Health Systems
The New York Times article indicates that “hospitals received $1 billion more in Medicare reimbursements in 2010 than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms…”
It also cited a May 2012 report from the Office of the Inspector General which stated Medicare payments for evaluation and management (E/M) services increased by 48%, from $22.7 billion to $33.5 billion from 2001 to 2010.
Furthermore, the Times reported that facilities which:
“[R]eceived government incentives to adopt electronic records showed a 47% rise in Medicare payments at higher levels from 2006 to 2010, …compared with a 32% rise in hospitals that have not received any government incentives.”
HHS’ strongly worded letter states, “False documentation of care is not just bad patient care; it’s illegal,” and points to “reports” which allege “cloning” of medical records (the practice of copying and pasting information from one record to another) and “upcoding” (the practice of coding a higher level of care than what was actually provided).
In its letter to hospital associations, HHS stated that “law enforcement will take appropriate steps to pursue healthcare providers who misuse electronic health records to bill for services never provided.”
The AHA quickly fired back in a letter of its own the same day.  While agreeing that “cloning” and “upcoding” are “not to be tolerated,” AHA President and CEO Rich Umbdenstock noted it is “critically important to recognize that more accurate documentation and coding does not necessarily equate with fraud.”
The AHA also noted its own, repeated efforts encouraging CMS to clarify E/M coding particularly for hospital emergency departments and clinics, even going so far as to recommend CMS establish national guidelines for hospital E/M coding.
“What’s needed is clearer guidance from CMS, not duplicative audits that divert much needed resources from patient care,” Umbdenstock wrote, pointing to Recovery Auditor efforts, pre-payment audit demonstrations, and Medicare Administrative Contractor reviews, among others.
In the letter, Unbdenstock noted that a recent AHA RACTrack survey showed hospitals appealing 40% of denials with a success rate of 75%.
“No one questions the need for auditors to identify billing mistakes; but the flood of new auditing programs…is drowning hospitals with a deluge of redundant audits, unmanageable medical record requests and inappropriate payment denials," he writes.

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