HHS Warns Hospital Groups on EHR Fraudulent Billing

Federal officials have sent a letter to several healthcare associations warning their members that the use of electronic health record (EHR) systems to “upcode” and inflate medical bills will result in prosecution.

The letter has sparked debate in the industry on whether EHRs foster medical billing fraud or merely allow physicians to now properly code for delivered services.

The September 24 letter from Department of Health and Human Services’ (HHS) Secretary Kathleen Sebelius and US Attorney General Eric Holder was sent to the American Hospital Association (AHA), three other hospital groups, and the Association of American Medical Colleges. The letter states that while EHRs improve care quality and coordination, HHS has seen “troubling indications that some providers are using this technology to game the system, possibly to obtain payments to which they are not entitled.”

This EHR-driven fraud includes “cloning” medical records, or copying and pasting old medical information into new records, in order to inflate bills sent for payment to Medicare and Medicaid.

The letter also said some hospitals are using EHRs to “upcode” the intensity or severity of a patient’s condition in order to receive higher reimbursement.

The Centers for Medicare and Medicaid Services is specifically looking for cases of cloning and upcoding in its audits, the letter said, and offenders will be prosecuted.

The letter was sent amid various studies and news reports that EHR systems might be contributing to a rise in upcoded and cloned bills. In September the Center for Public Integrity released an analysis of Medicare claims from 2001 to 2010 that showed over time providers used more expensive Medicare billing codes “despite little evidence that Medicare patients as a whole are older or sicker than in past years, or that the amount of time doctors spent treating them on average was rising.”

In response to the warning, several hospital and healthcare organizations sent response letters to HHS calling on the government to establish better guidance and guidelines on coding and submitting bills. The response letters also asked HHS to not be so quick to blame the misuse of EHRs for better documentation and higher reimbursement bills.

While agreeing that practices like cloning and upcoding should not be tolerated, the AHA said in its letter to HHS that “America’s hospitals take seriously their obligation to properly bill for the services they provide to Medicare and Medicaid beneficiaries.”

AHA stated that the rise in code-level assigned and requested payment could be attributed to EHRs creating more accurate documentation that feeds more specific and accurate codes – and that not all reimbursement increases can be attributed to fraudulent practices.

Since EHRs allow for better use of data and documentation, it could be that providers are now properly billing for all services rendered.

Regardless, AHA said that more detailed national guidelines need to be developed for hospital emergency department and clinic visits that would simplify the “highly complex” Medicare and Medicaid payment rules.

“The AHA has long called for national guidelines for hospital ED and clinic visits, and we stand ready to work with CMS in the development and vetting of such guidelines,” the letter said.

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