Remorse Code: Mistakes that Prompt an Audit

Under the False Claims Act, it is illegal to submit a false or fraudulent claim to Medicare or Medicaid, intentionally or not. It is the physician who bears responsibility for the accuracy of claims submitted if billings raise questions. Good practices may help avoid the heartache and cost of delayed reimbursement or audits.

Big brother & you

In an analysis of coding trends and physician billing patterns, the Office of the Inspector General placed cardiology sixth on its list of specialties for high billers to Medicare in 2010. Overall, the number of these outliers was small—a mere 1,669 physicians across all specialties, or less than 1 percent—but this sliver selected the two highest codes for evaluation and management (E&M) services 98 percent of the time, for a cost of $108 million.

That’s the kind of aberration that raises red flags for payers. The 2012 Coding Trends of Medical Evaluation and Management Services report did not attempt to determine if the billing practices constituted fraud. But it identified the physicians and recommended that the Centers for Medicare & Medicaid Services (CMS) keep tabs on them. In response, CMS said it planned to ask its Medicare contractors to produce billing reports that compare a physician’s coding and billing patterns against his or her peers to spot high billers and potential overpayments. It also said it would scrutinize not just the 1,669 physicians but expand its scope to 5,000.

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“The government has the full deck of cards. They have all the claims data,” says Betsy A. Nicoletti, MS, a Springfield, Vt.-based certified professional coder, consultant and author of several books and a website on medical coding. “They know if you are an outlier or not. All we have is the ace of spades and the two of hearts and it leaves us at a disadvantage.”

Some fundamental practices may help physicians and their institutions reduce that handicap. Given that a physician holds responsibility for coding claims—and faces the hassle of challenging denials, or worse yet, penalties if found guilty of false or fraudulent claims—he or she   should know how to code what he or she practices, Nicoletti and other coding experts say.

Eric L. Altschuler, MD, PhD, goes one step further. He proposes that coding and billing basics be part of medical school training, a concept that he and colleagues are pilot testing at Rutgers New Jersey Medical School in Newark, where he teaches in the physical medicine and rehabilitation department. To date, they've developed four one-hour lectures, which are generally well accepted by second-year medical students (Med Educ Online Aug. 12, 2013).

Rather than see coding as a burden, physicians should recognize it reinforces good patient care, Altschuler says. “It is a powerful tool,” he says. “It helps the doctor write better notes and that leads to better medicine.” Correctly coding and billing also facilitates timely reimbursement and avoids the cost and angst of an audit.

Nicoletti agrees that a physician should learn the rules of coding and do the bulk of coding but draws the line at tasks that take time away from patient care. “If there is something unusual or they can’t find a diagnosis code then I don’t want physicians spending 5, 10, 15 minutes looking that up; put that to a coder,” she says. Coders also might apply modifiers and check for bundling, she adds.

Document everything

Debra Mariani, a certified professional coder and a senior specialist who works on coding issues at the American College of Cardiology, observes that a common mistake cardiovascular physicians and practices make is insufficient documentation. “No one wants to take the time to do it properly because they are busy and they want to take care of their patients,” she says. “But the only way to protect yourself is to write down exactly what you have done. That will be more evident in the days of ICD-10.”

Staying on the right side of the law

As part of an education initiative, the Office of the Attorney General published a roadmap for physicians to help them stay compliant with the False Claims Act and other healthcare laws. It emphasized the importance of not upcoding services and offered these tips.

Don’t bill for services that:

  • Were not performed;
  • Were not medically necessary;
  • Were performed by an improperly supervised or unqualified employee;
  • Were performed by an employee who had been excluded from participation in federal healthcare programs;
  • Were of such low quality that they were virtually worthless; and
  • Were already included in a global fee.


Documentation should provide an accurate reflection of a patient encounter, even when the service falls outside the upper or lower boundaries of a “normal” visit. Documentation can show the physician followed guidelines, as shown in his or her notes; but when what is best for the patient doesn’t fit neatly into the guidelines, the physician can document the reasoning and action.  

“You have to code what you do that day,” she says. “That is the important key. You know you saw a difficult patient but if you don’t document it then whoever audits your chart will not know you saw a difficult patient.”

Physicians sometimes run into trouble using EMRs, Nicoletti and Mariani warn. Copying and pasting may lead to discrepancies and contradictions. For instance, the EMR may show a higher E&M visit than is warranted if a physician copies for a simple procedure one day from a more complex visit that occurred on the previous day.  

Mariani emphasizes that there are gray areas in coding that may be open to interpretation as well. Cardiovascular specialties may be especially challenging because of the breadth of the field, the need to use many services beyond E&M and the often evolving technologies that may require a revision.

“If you take the pacemaker section, it has been changed almost yearly and it is still being changed,” she says, referring to the Current Procedural Terminology (CPT) coding book. “When a company makes a device and once it gets FDA approved, physicians want to use it and want to get paid for it.  We no sooner are working on a set of codes and a new technology comes out. It often involves a lot of codes.”

Physicians and their institutions should keep in touch with their specialty societies to stay on top of coding changes and they should not scrimp on education, Nicoletti says.

Self-audits & audits

If a practice doesn’t review its billing and coding internally, it leaves itself vulnerable to unintentional misrepresentations that could trigger an audit or to intentional fraud that could result in not only an audit but a scandal, a multimillion-dollar settlement and even imprisonment for some physicians. That makes internal safeguards all the more important. 

Some practices put a self-auditing process in place and periodically pull physicians’ notes to identify missing elements or problematic practices. While this may seem more feasible in larger practices, Mariani recommends that small groups conduct some kind of self-check. “Even if you are a small office you can try to set up guidelines to show you are protecting yourself,” she advises.

Nicoletti also recommends practices conduct an annual audit to identify problems proactively and be sure to conduct audits with an integration. “If I find a problem today and it has been going on for six months, I can correct those claims and fix it,” she says. “I don’t have to do any self-disclosure or mea culpa with the government. I just fix it and go forward.”

But what happens if the auditor knocks at your practice’s door? Depending on the audit, a practice first may want to contact a lawyer. And not just any lawyer, Nicoletti emphasizes, but an experienced healthcare lawyer. “You can’t call the person who did your shareholder agreements,” she says. “The lawyer hires the coder to do the review because everything will be under attorney-client privilege.”

Make staff aware of charts that will be audited, Mariani cautions, and the need to be compliant. A practice may choose to be proactive, but send only what was requested. “If they ask for auditing for Nov. 14, then send them Nov. 14,” she says. “Each note should stand on its own. If that note says it references something else then send that something else.”

And don’t assume the auditor’s decision is correct unless it seems plausible. The American Hospital Association calculated in 2012 that hospitals were required to repay $236 million for services and items that the association considered medically necessary. It added that probably millions of dollars more had been paid by hospitals that had not contacted the association. 

“Many times audits are overturned,” Mariani says. “I would ask everybody to scrutinize everything from the first letter. There is a thorough appeals process you can go through [but] you have to weigh that against your time.” 

2013’s high-profile settlements

Many False Claims Act cases come down to practices not understanding the rules or having insufficient controls in place to identify errors. Those often are settled with refunded payments and documented efforts to correct procedures that allowed the unintended mistakes to occur. But some cases may go to court, particularly those in which the government alleged abuse, inappropriate care and deliberate fraud. Recent cases involving cardiologists include:

Jose Katz, MD, founder, CEO and owner of two medical services in New Jersey and New York, who pleaded guilty in April 2013 to healthcare fraud and Social Security fraud. He was accused of exposing thousands of patients to unnecessary tests and treatments, using unlicensed or untrained personnel and giving his wife a “no show” job to make her eligible for Social Security benefits. He received a 6 ½-year prison sentence and agreed to pay full restitution of $19 million.

St. Joseph’s Medical Center in Towson, Md., reached a settlement in February 2013 to pay $4.9 million after being charged with submitting false claims to Medicare, Medicaid and other federal healthcare programs. More than 300 cases had been filed on behalf of patients against Mark G. Midei, MD, an interventional cardiologist, and against the center for allegedly unnecessarily stenting patients. The center had already settled a civil suit for $22 million.

EMH Regional Medical Center in Elyria, Ohio, agreed in January 2013 to pay $3.9 million and the North Ohio Heart Center $541,870 as part of a civil settlement based on allegations that they submitted false claims to Medicare between 2001 and 2006. North Ohio Heart Center officials said in a statement that the settlement was not an admission of wrongdoing.