Federal Officials Warn Hospitals About Using EHRs for ‘Upcoding’
In a strongly worded letter, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius on Monday warned hospitals that the Obama administration will not accept attempts to "game the system" by using electronic health record systems to boost Medicare and Medicaid payments, the New York Times reports.
The letter was sent to the American Hospital Association, Association of Academic Health Centers, Association of American Medical Colleges, Federation of American Hospitals and National Association of Public Hospitals and Health Systems.
The letter stated that there is evidence that hospitals are using EHR systems to obtain payments for which they are not qualified, a process known as "upcoding." To that end, two recent reports found that EHR systems are pushing up the cost of care, not saving money as they were expected to do (Abelson/Creswell, New York Times, 9/24).
A report by the Center for Public Integrity released earlier this month analyzed 362 million Medicare claims between 2001 and 2010 and found that during that time, providers began using more higher-paying billing codes for Medicare office visits while reducing the use of lower-paying codes. The report found that such upcoding added at least $11 billion to physicians' fees during that time (Schulte et al., Washington Post, 9/15).
Meanwhile, a Times analysis of Medicare data from the American Hospital Directory found that hospitals in 2010 received $1 billion more in Medicare reimbursements than in 2005, at least in part because of changing billing codes used in emergency departments.
Further, the analysis found hospitals that received federal incentive payments for the meaningful use of EHRs experienced a 47% increase in Medicare payments from 2006 to 2010, compared with a 32% increase for hospitals that did not receive government EHR incentive payments (Abelson et al., New York Times, 9/21).
Details of Letter
The letter stated that EHR systems "have the potential to save money and save lives." However, it added, "There are troubling indications that some providers are using this technology to game the system, possibly to obtain payments to which they are not entitled. False documentation of care is not just bad patient care; it's illegal" (New York Times, 9/24).
Holder and Sebelius also touted new fraud-fighting tools approved by the administration in its aggressive efforts to crack down on Medicare fraud in recent years (Baker, "Healthwatch," The Hill, 9/24). CMS is conducting audits to prevent improper billing and has begun broader examinations of billing practices to determine whether certain hospitals are billing for more-costly services more frequently than their peers, the letter notes (New York Times, 9/24).
The letter stated, "We will not tolerate health care fraud," adding, "Law enforcement will take appropriate steps to pursue health care providers who misuse [EHRs] to bill for services never provided" (Morgan, Reuters, 9/24).
The Times noted that although the letter is not unprecedented, it is "especially blunt."
Health care providers have countered that EHR systems allow them to more accurately depict the care they are providing, leading to higher payments. Many hospitals and physicians said paper records did not accurately reflect how much time providers were spending with patients or how sick those patients were (New York Times, 9/24).
AHA President Rich Umbdenstock in a letter responded to the warning by urging CMS to provide better guidance on navigating complex rules and arguing that "duplicative" federal audits divert resources away from patient care. "It's critically important to recognize that more accurate documentation and coding does not necessarily equate with fraud," Umbdenstock wrote (Reuters, 9/24).
However, he added, "We agree that the alleged practices described in your letter, such as so-called 'cloning' of medical records and 'upcoding' of the intensity of care, should not be tolerated" (New York Times, 9/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.