Physician concern spurs revision in audit guidelines
Adequate guidelines from carriers essential
The federal Department of Health & Human Services (HHS) has issued new guidelines governing future Medicaid fraud audits at teaching hospitals, in response to complaints from physicians and teaching hospitals. The complaints alleged that prior investigations held physicians and teaching hospitals unfairly accountable for billing errors that resulted from conflicting directives and poor communication they received from carriers and federal agencies.
The new guidelines, which took effect immediately, also mean that 16 of the 49 academic health centers previously being reviewed for possible upcoming offenses and violations of a teaching physician "physical presence" standard for Medicare Part B reimbursement were dropped from the investigation. These institutions were dropped because they were served by carriers who had not provided adequate guidance on physicians at teaching hospitals (PATH) reimbursement rules.
The HHS Office of the Inspector General (OIG) plans 20 to 30 new audits to replace the ones it canceled, say HHS sources.
Medical groups have criticized the previous PATH audits on the grounds that physicians and academic medical centers should not be held accountable for billing errors that are more likely the result of poor communication than fraud.
Officially announced last August, PATH has already collected $42 million in settlements from two hospitals, the University of Pennsylvania Hospital and Thomas Jefferson University Hospital, both in Philadelphia. These first audits involved billings between 1990 and 1995 to determine if teaching physicians were actually physically present when they provided supervision of residents for services billed to Medicare.
However, physicians complained a final rule establishing the "physician standard" was not effective until July 1996.
In response, HHS says, future PATH audits will only involve institutions where Part B carriers "issued clear explanations of the rules regarding reimbursement for the services of teaching physicians" before Dec. 30, 1992, the first date HHS says the relevant standards were clearly settled. To qualify for reimbursement after that date, "physicians must either personally furnish a service or be present when it is furnished by an intern or resident in order to be reimbursed under Part B."
Other PATH audit guidelines established specify that HHS:
• will not approach a hospital to begin PATH talks until it has obtained carrier documents "showing that clear instructions on the need for teaching physicians to be physically present were given to the institutions or physicians served by that carrier";
• must first review any carrier guidance that the hospital "views as contradictory" after approaching the hospital and before continuing its audit;
• will only audit physician evaluation and management codes prior to August 1995 if they represent "egregious cases of upcoding abuse or fraud";
• will not undertake a PATH audit for upcoding of physician services if it does not pursue a PATH audit on the physical presence issue (however, HHS may still conduct a non-PATH audit based on other information as it sees fit);
• will continue to credit a hospital’s submitted undercoded claims against upcoded claims.
American Medical Association (AMA) officials are happy about these changes, but they’re also concerned that the incident sets a precedent giving HHS too much authority to create policy. "We won a victory, " says AMA General Counsel Kirk Johnson, JD. Specifically, the AMA will challenge whether the related guidance from carriers was clear, prominent, and totally consistent with other carrier documents.
However, Susan Waltman JD, general counsel for the Greater New York Hospital Association, said the new carrier-based audit guidelines "probably won’t hold up if challenged," as they may violate the Administration Procedures Act, which requires public notice and comment before new federal policies can be officially implemented.
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