AHA counsel offers tips on avoiding fraud probes
The best way to avoid tangling with government investigators is to keep them out of your hospital in the first place, says John C. West, JD, MHA, assistant legal counsel with the American Hospital Association in Chicago. Once they step in the door, it’s almost inevitable that they will find significant fraud resulting in serious penalties.
"Very few hospitals could pass a comprehensive audit of services, " West told attendees of the recent meeting of the American Society for Healthcare Risk Management in Atlanta. "Do everything possible to keep government investigators out in the first place."
For instance, West points out that most hospitals could not easily pinpoint their actual costs for a particular service like an MRI. Government investigators easily could claim that the hospital’s billing for that service has no relation to the actual cost and this therefore fraudulent. That is not the sort of dispute that would bring investigators to your hospital, but it’s the sort of dispute that could result in penalties once they’re already looking around.
West offers these other words of advice:
• Do not go looking for problems unless you seriously intend to fix them. The best approach, of course, is to fix the problems.
• Do not offer any sort of incentive to the staff in charge of coding and other financial duties. Offering a bonus for increasing revenues, for instance, can be an indirect way of encouraging fraud.
• Remember that small things can add up. West cites a hospital that routinely added a "stat" charge to all lab orders coming from the emergency department, whether the doctor actually ordered stat work or not. The charge amounted to an additional payment of only $3 per order, and the hospital administrators rationalized that any lab orders coming from the emergency department had to be handled quickly. After six years of this policy, the government investigated and ultimately settled with the hospital for $1.1 million.
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