Hospital Associations Respond With a Request for More Guidance, Less Audits

In a letter dated September 24, 2012, the Secretary of the U.S. Department of Health and Human Services (HHS) and the U.S. Attorney General told the chief executive officers of five leading hospital associations that there are "troubling indications" that some providers are using electronic health records (EHR) to "game the system" and bill for services not rendered. More specifically, the letter claims that hospitals may be using EHR to "clone" medical records -- such as copying and pasting the same examination findings for multiple patients -- in order to "inflate what providers get paid." In addition, Secretary Sebelius and Attorney General Holder noted that EHR could similarly tempt some providers to "upcode" the intensity of care or severity of patients' condition as a "means to profit with no commensurate improvement in the quality of care."

Per the letter, the Centers for Medicare and Medicaid Services (CMS) is specifically initiating more extensive medical reviews to ensure that providers are coding evaluation and management [E/M] services accurately. To the extent fraud is identified, Secretary Sebelius and Attorney General Holder warned that the government will "take the appropriate steps" to pursue providers through criminal, civil or administrative enforcement proceedings, including administrative payment suspensions. Notably, as a result of the Affordable Care Act, CMS can suspend payments to a Medicare or Medicaid provider based only on a "credible allegation of fraud" as opposed to the more onerous levels of proof required for a criminal or civil proceeding. Realizing that the government cannot deter healthcare fraud by itself, Secretary Sebelius and Attorney General Holder asked the hospital associations for their help in ensuring that health information technology is not "misused or abused" as the industry phases in EHR.

Further indicating the seriousness of this issue, the American Hospital Association (AHA), one of the recipients of the HHS/Department of Justice letter, issued a reply to Secretary Sebelius and Attorney General Holder later that same day. Noting that EHR enhances a hospital's "ability to correctly document and code the care a patient has received," the AHA responded that "It's critically important to recognize that more accurate documentation and coding does not necessarily equate with fraud." The AHA informed Secretary Sebelius and Attorney General Holder that it has requested that CMS develop national guidelines for the reporting of hospital emergency department and clinic visits "11 times (starting in 2001) since the outpatient prospective payment system (OPPS) was first implemented." Stating that "What's needed is clearer guidance from CMS, not duplicative audits that divert much needed resources from patient care," the AHA letter noted that "investments should be made in provider education and payment system fixes to prevent payment mistakes before they occur."

The exchange between the government and the hospital associations comes on the heels of a recent New York Times article which reported substantial increases in Medicare claims for the two highest paying categories under E/M codes used to report facility resources for clinic and emergency department visits. Characterizing E/M coding abuses by hospitals with EHR as "widespread," the New York Times article also noted that Medicare Administrative Contractors are beginning to alert doctors of the Medicare program's concerns over upcoding patterns for emergency department services associated with template-generated medical records.