Fear of committing Medicare fraud could paralyze care delivery

Increased awareness of investigations leads carriers to scrutinize claims

Subacute providers, particularly those within long-term care facilities, are fully aware of the repercussions other providers are experiencing as a result of Medicare fraud and abuse investigations. But the fear of investigators knocking on the facility’s door has broadened to include payers.

Claims in excess of four per month for physician visits within long-term care facilities have been denied since mid-February. So far, the problem appears to be limited to two states: Alabama and Georgia.

"Thankfully, we’ve only heard of the denied claims problem in one state, but we’ve informally polled other states and are keeping a watchful eye out," says Susan Pettey, director of federal affairs for the American Medical Directors Association in Columbia, MD.

The decision to limit physician visits to four per month was made by the medical director for the state’s Part B Medicare carrier based on a February memo from the Baltimore-based Health Care Financing Administration (HCFA). HCFA’s memo warned carriers of potentially "egregious" claims and informed them of the Department of Health and Human Services’ (HHS) increased investigations of Medicare fraud and abuse.

"The bigger issue in this problem is what the repercussions of such a decision [by a Medicare carrier] could be to both the physician and the patient," says Pettey.

The problem of denied claims also creates a Catch-22 for the payer. "If the physician is notified of a potential limit, they can alter their practice to keep the patient in the acute hospital longer, but that’s really to the carrier’s disadvantage because it will be more expensive," explains Pettey.

^{Increased scrutiny = reimbursement problems}

Carriers may deny or place more scrutiny on Medicare claims as reports of investigations are reported. In addition, an HHS audit, which will be released to the public later this year, estimates that 30% of all Medicare claims have problems: errors in bookkeeping and personnel. Furthermore, the audit concludes that a majority of the errors were from home health agencies and nursing facilities, according to a June 11 article in The Wall Street Journal.

HHS investigators found $23 billion 12% of Medicare’s overall budget in problems due to improper payments to medical providers after reviewing approximately 5,000 Medicare claims from fiscal year 1996. Almost one-third of the claims during physician visits, hospitals, and other providers were found faulty.

But there is no limit to the number of allowable physician visits on a monthly basis for Medicare patients, says George Jacobs, associate regional administrator for HCFA’s region four, which includes Georgia. Medicare managed care enrollees in Georgia are not affected by the denied claims, however.

"The HCFA memo told Medicare carriers that they could stop payment on claims they determined were not medically necessary or possibly fraudulent in nature," explains Perry Kemp, executive director of the Georgia Medical Directors Association, based in Atlanta. "The medical director misinterpreted the word egregious from the memo and determined that only one visit per month for these patients would be allowed."

To make matters worse, when questioned about denied claims for subacute patients, "the medical director determined that there was no such thing as subacute care within long-term care facilities and accused hospitals of receiving DRG money and shipping the patient out too soon," adds Kemp.

But Pamela Erdman, MD, a physician who specializes in long-term care patients, disagrees about the number of allowable visits. Since mid-February, claims have been denied only when they exceeded four visits per month for Erdman’s Medicare Part A patients. Erdman is a partner in Physician Support Services, a physician practice group in Stone Mountain, GA, and president of the Georgia Medical Directors Association.

"All physicians in Georgia who see the very sick patients on subacute units are having the same problem with denied visits," adds Erdman. "According to HCFA guidelines, there is no numerical screen, and each visit must only meet the criteria of medical necessity,"

The problem of getting reimbursed for these visits may not be resolved in the near future, either. Aetna, the Medicare carrier representing beneficiaries in Georgia, relinquished its coverage in June to Blue Cross/Blue Shield of Alabama, notes Jacobs.

After a claim is denied by the payer, the next step in resolving the matter would be to appeal the denied claim, says Jacobs.

"The physician would need to request an informal review. If the informal review does not satisfactorily address the physician’s concerns, then a hearing would be required by an independent officer to resolve the issue," explains Jacobs.

While the arbitrary decision has affected only about four physicians so far, thousands of Part A Medicare patients in long-term care facilities are in jeopardy of not seeing their physician, notes Kemp. There are a handful of physicians who closed their regular internal medicine or general practice to focus on long-term care, and those physicians have had a 100% drop in income, he adds.

"The Part A Medicare patients are the sick ones," says Kemp. "They’re the ones being anticoagulated, receiving respiratory therapy, or recovering from a stroke. The physician should be able to see them as often as medically necessary, and that’s the real issue in this argument: medical necessity."

The Georgia Medical Directors Association is prepared to resolve the matter and is addressing the issue in several ways, says Kemp. First, the American Medical Directors Association is in constant communication with it’s state affiliate and is asking for feedback from other states on reimbursement problems.

Also, representatives from the Georgia Medical Directors Association are meeting with administrators from Blue Cross/Blue Shield of Alabama to see if an agreement can be reached concerning the denied claims.

"We are prepared to go further and will seek legal counsel if necessary and take the next steps," warns Kemp. "If this continues, it could paralyze long-term care delivery in the state of Georgia."