Are some hospitals defrauding Medicare by having hospitalists bill for medically unnecessary patient exams? We are currently investigating this practice at a Broward County, Florida hospital and believe it may be occurring elsewhere.
Here is the scam in a nutshell… The patient comes into the emergency room and is evaluated by the ER physician. That patient is then directly admitted to the Intensive Care Unit (ICU). Upon admission into the ICU, yet another physician examines the patient. If that isn’t overkill, the hospital requires one of its hospitalists to go to the ER and perform an exam.
That is three comprehensive exams in a very short period of time. Are they all medically necessary? Probably not. In fact, we can’t conceive of any scenario where such duplicative exams would be necessary.
(For our nonhealthcare readers, a hospitalist is a physician who cares for you while you are hospitalized. They typically don’t have their own patients like a primary care physician does. Instead, they are function as your primary care doctor only while you are in the hospital.
Physicians who bill Medicare for their services use CPT codes. Developed by the American Medical Association, Current Procedural Terminology codes (“CPT”) were developed to offer standardization in medical billing.
The CPT code most often used in new patient visits requiring hospitalization or ICU services is the 99223 code. The emergency room and intensive care physicians may have their own specialized codes. A hospitalist evaluating a patient for the first time is likely to use the 99223 new patient exam code.
We don’t believe that this type of Medicare billing fraud is the fault of the hospitalist. Instead, it is usually organized by the hospital itself. We have found that some hospitals push staff and physicians to bill for services that are medically unnecessary.
Instead of providing better care for patients, hospitalists in these facilities are being asked to perform medically unnecessary exams. Some of those exams are quite intrusive and lengthy.
Physicians who don’t play along with these billing schemes are usually given less favorable reviews or assignments or let go.
We are familiar with one phony billing scheme involving hospitalists and overbilling which was resolved in 2014. In that case, the employer created a report to identify hospitalists whose billing required scrutiny for potential upcoding. Hospitalists who were not generating enough revenue were red flagged. Doctors not meeting recommended targets would be encouraged to increase their billing.
Conversely, management would look the other way at doctors who appeared to be overbilling.
These activities create an environment where hospitalists are encouraged to generate more revenue for the hospital. Merely using revenues or billing code metrics to compare physicians creates peer pressure that can increase billings.
In the 2014 case, the Medicare Administrative Contractor for Texas sent 223 audit letters to the hospitalists suspected of overbilling. Despite these audit warnings, the employer continued to push the hospitalists to bill using the highest level of service under the CPT codes.
TeamHealth Holdings – IPC The Hospitalists Inc. Whistleblower Settlement
In February of this year, The U.S. Department of Justice settled a federal False Claims Act lawsuit filed against TeamHealth Holdings. That company is the successor to IPC The Hospitalists Inc.
The case was originally filed by Dr. Bijan Oughatiyan, a hospitalist working for IPC Hospitalists. Dr. Oughatiyan claimed that the company “engaged in a fraudulent scheme whereby it causes the physicians it employs, called hospitalists, to create records seeking payment from medical insurers for higher and more expensive levels of medical service than were actually performed – a practice commonly referred to as ‘upcoding.’”
The pressure on hospitalists was so high that some were billing for more services in a day than were humanly possible to perform! For example, Dr. Oughatiyan said,
“IPC hospitalists regularly submitted daily billing records for services that would have taken in excess of 24 hours to perform, even using extremely conservative estimates. Oughatiyan has collected records for 12 different IPC hospitalists who each submitted daily billing records for services that would have taken in excess of 24 hours to perform. Those 12 hospitalists submitted 32 such daily billing records.”
In resolving the charges, the company agreed to pay $60,000,000 and enter into a five year corporate integrity agreement to insure there are no future violations.
In announcing the settlement, Chicago’s United States Attorney said, “Medical providers who fraudulently seek payments to which they are not entitled will be held accountable. False documentation of treatment is not just flawed patient care; it is illegal.”
For reporting the violations, Dr. Oughatiyan received a whistleblower award of $11.4 million.
False Claims Act, Whistleblower Awards & Hospitalists
Under the False Claims Act, whistleblowers with inside information about Medicare, Tricare or Medicaid fraud can receive large cash awards for their information. Awards are based on the amount of money collected by the Justice Department. Typical awards range between 15% and 30% of whatever the government collects.
Hospitalists performing unnecessary physical exams, duplication of work or “upcoding” are all examples of Medicare fraud eligible for an award. Even if you participated in the illegal conduct, you are probably still eligible for an award unless you were the person orchestrating the illegal behavior. That means guilty hospital administrators may be ineligible.
Although whistleblower retaliation is illegal, we know that those in the medical profession are often concerned about loss of their position or finding new work. Since cases are filed under seal, there is a period of many months before the case is unsealed and becomes public. Even then, we can often take additional steps to prevent your identify from becoming public.
We worry that pushing hospitalists to see so many patients and perform so many exams hurts patient care. Instead of seeing patients that truly need services, doctors are instead performing exams on patients who they will likely never see and who were just examined by an emergency room physician. No one benefits from these arrangements except the hospital.
Although we are presently investigating one hospital in Florida for alleged overbilling Medicare, we are always interested in all forms of Medicare fraud. Unfortunately, if one facility has found a way to cheat the system, others probably have as well.
If you are a hospitalist or other healthcare worker with inside information about medically unnecessary examinations, duplicate billing or other healthcare fraud, call us. All inquiries are kept strictly confidential and protected by the attorney – client privilege. We can help you determine if you are eligible for an award and prosecute your case if you elect to file. We can also help you to stop the fraud.