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Feds warn hospitals about using EHRs to 'upcode' claims

Amid emerging evidence that some hospitals may be using electronic health records (EHRs) to "game the system" by either cloning or "upcoding" claims, Health and Human Services Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder sent a warning letter Monday to the CEOs of five hospital associations that such activity will not be tolerated.

The letter noted "troubling indications" that some providers are using the technology as a means to gain payments to which they are not entitled. "False documentation of care is not just bad patient care; it is illegal," the letter warned. "These indications include potential ‘cloning’ of medical records in order to inflate what providers get paid. There are also reports that some hospitals may be using electronic health records to facilitate ‘upcoding’ of the intensity of care or severity of patients’ condition as a means to profit with no commensurate improvement in the quality of care."

Rich Umbdenstock, president and CEO of the American Hospital Association, responded the same day to the administration’s letter, stating, “America’s hospitals take seriously their obligation to properly bill for the services they provide to Medicare and Medicaid beneficiaries.”

He also repeated a call for the Centers for Medicare & Medicaid Services (CMS) to develop national coding guidelines for emergency department and clinic visits. It is a request, Umbdenstock's statement noted, that AHA has made 11 separate times since 2001 when the outpatient prospective payment system (OPPS) was first implemented.

The warning from the federal government comes in the wake of separate reports of how some hospitals may be using how they code for particular procedures as a means to boost their revenues.

In mid-September, The Center for Public Integrity released a report of its study of Medicare claims from 2001 to 2010. In it, the center contends providers’ and other healthcare professionals’ billing practices added $11 billion over the decade in “questionable” Medicare fees.

“Medical groups argue that the fee hikes are justified because treating seniors has grown more complex and time-consuming, both due to new technology and declining health status,” the report stated. “The rise in fees may also be a reaction, they say, to years of under-charging, and reflect more accurate billing.”

However, the center noted that in its investigation of the claims, that providers had migrated over time to 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.”

The New York Times also conducted its own investigation and in a front page article published Friday, showed how the increased use of EHRs might be leading to the increases in billing. According to analysis of records from 2006 to 2010, the newspaper found hospitals that have received government incentives to implement the electronic records showed a 47 percent rise of Medicare payments at higher levels, versus a 32 percent rise among hospitals that haven’t received the incentives.

In an effort to root out potential overpayments on claims, the federal government has instituted more aggressive auditing of Medicare claims as well as other efforts to examine whether some hospitals are billing for more expensive services at higher rates than their peers.

But AHA’s Umbdenstock contends these efforts have gone overboard.

“No one questions the need for auditors to identify billing mistakes; but the flood of new auditing programs, such as Recovery Audit Contractors, MACs and others, is drowning hospitals with a deluge of redundant audits, unmanageable medical record requests and inappropriate payment denials,” he wrote in his letter to Sebelius and Holder.

He also wrote that “electronic health records hold great promise for improving the efficiency and effectiveness of care,” and pledged to work with CMS and other federal officials to improve both the coding and accuracy of the codes submitted by hospitals.

“We agree that the alleged practices described in your letter, such as the so- called 'cloning' of medical records and 'upcoding' of the intensity of care, should not be tolerated,” Umbdenstock stated.

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