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Why is there a problem with upcoding and overbilling?


The Overbilling Conundrum.

Problems with physician overcoding and overbilling persists, despite increased focus on the cost of healthcare and scrutiny by federal regulators, according to a new report by ProPublica, which analyzed CMS data between 2012 to 2015 on services provided by and payments made to providers under Medicare’s Part B program in 2015.

In the study, ProPublica analyzed provider billing patterns for standard office visits in Medicare and found more than 490,000 providers billed the program for standard office visits for at least 11 patients in 2015. Of those, more than 1,250 providers billed for every office visit using the 99215 code, which is only to be used for visits that involve more intense examination and often consumes more time. Additionally, 1,825 health professionals billed Medicare for the most expensive type of office visits for established patients almost 90 percent of the time in 2015.


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Tom Davis, MD, a primary care physician for more than three decades in St. Louis, Mo., says the problem is severe, driven by employer compensation formulae that pay clinicians based on relative value units (RVUs). Clinicians often worry that data-based compensation adjustments are going to decrease their pay and thus must be offset by more aggressive coding.

“As long as compensation is based on RVUs, overcoding is going to persist,” Davis says. “Transitioning from traditional fee-for-service Medicare to Medicare Advantage paid through a shared-risk compensation formula would go a long way toward addressing overbilling. Clinicians would be paid on the value of the care they provide rather than fairly arbitrary definitions of levels of service.”

Until the payment system changes, he adds, overbilling is not going to significantly change-the clinicians will just have to deal with one more issue that increases their stress and risk of burnout.

Maxine Lewis, CPC, a member of the National Society of Healthcare Business Consultants in Reston, Va., says reimbursement is diminishing and the only way to increase it is to either be an expert in value-based care or upcode the services.

“Providers can document better with the use of an EHR and the EHR can also suggest the level of service to bill using the documentation,” she says. “Mistakes are being made because providers are seeing more patients per hour and sometimes are in a hurry to check the proper LOS. Others believe since they have documented with the help of the EHR, that they have noted a higher level.”

David Zetter, a healthcare consultant and founder of Zetter Healthcare in Mechanicsburg, Penn., believes most practices do not know whether they are billing, coding and documenting correctly as most have never had a real billing, coding, clinical documentation review, so they were set up to fail coming out of residency and fellowship.

“They really need to take control and ownership of how they are documenting their services and portraying their patients to the payers,” he says. “In order to do this, they need to understand how they should be documenting more thoroughly and appropriately billing the correct codes for the patient being seen and the services being rendered.”

Next: Fixing the problem


Diane Doherty, senior vice president at New York-based Chubb Healthcare, says while most physicians are honest and committed to providing the best medical care to patients, there are some dishonest professionals who try to take advantage of the system for their own personal gain-as there are in any profession. Intentionally overbilling Medicare is a serious crime with significant consequences.


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“There are many types of fraudulent billing practices,” Doherty says. “In the office setting, the most common are billing for services not provided, upcoding or billing for a more expensive service than what was actually provided, and billing for services the patient did not need. Falsifying a patient’s medical record to justify tests or procedures that are not medically necessary or billing for durable medical equipment that was never given to the patient are also common.”

Fixing the Problem

Still, many billing errors are innocent mistakes not intended to defraud the system.

“A critical step to fix this is hiring qualified staff to handle a provider’s billing procedures, which includes overseeing coding, billing and collection activities,” Doherty says. “Many practices don’t invest enough time and resources into their billing division, resulting in underqualified staff making unintentional, but fraudulent, mistakes.”

Investing in experienced professionals to run a practice’s billing department can end up saving a practice money in legal fees down the line. Just be sure that whoever is hired is made aware of practice expectations, as well as be up-to-date on regulatory requirements and all coding and compliance procedures.

Davis notes that depending on their compensation formulae, he would advise clinicians to code aggressively but honestly.

Resources Exist

Fortunately, many educational resources and programs are available online to help physicians avoid Medicare fraud and abuse and many of these trainings can be done as a self-study with materials online or taught by experienced professionals at a practice.

For example, HHR published a “Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse,” which outlines federal fraud and abuse laws, provides case studies, and explains how physicians can appropriately handle their relationships with payers, healthcare providers and vendors.

Next: Tips to avoid overcoding


CMS also has a Medicare Fraud & Abuse handbook on prevention, detection and reporting, which provides a step-by-step guide on how to report suspected fraud and abuse.

Tips for PCPs to avoid overcoding

* Establish coding and documented compliance standards that requires all bills submitted to Medicare be reviewed and compared against medical records

* Conduct regular internal monitoring and auditing


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* Provide extensive staff training and education

* Designate a compliance officer with background in coding and preventing fraud

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