CPI Claims Docs and Hospitals' Upcoding Is More Prevalent

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  • September 18, 2012
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The Center for Public Integrity (CPI), an independent research group, maintains providers and facilities have progressively billed higher rates for treating older Medicare patients for the last 10 years, adding $11 billion or more to fees.
In the article “Cracking the Codes,” which discusses the group’s investigation, CPI says 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 rise in fees may also be a reaction, they say, to years of under-charging, and thus reflect more accurate billing. The fees are based on a system of billing codes that is structured to make higher payments for treatments that take more time and effort.
CPI counters with an analysis of Medicare claims from 2001 through 2010 showing that over time, thousands of providers turned to more expensive Medicare billing codes, while spurning use of cheaper ones. They did so 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.
Among the investigation’s key findings:

  • Physicians steadily billed Medicare for longer and more complex office visits between 2001 and the end of the decade, even though there’s little hard evidence that they spent more time with patients or that their patients were sicker and required more complicated and time-consuming care. The higher codes for routine office visits alone cost taxpayers an estimated $6.6 billion over the decade.
  • More than 7,500 physicians billed the two top-paying codes for three out of four office visits in 2008, a sharp rise from the numbers of doctors who did so at the start of the decade. Officials said such changes in billing can signal overcharges occurring on a broad scale. Medical groups deny that.
  • The most lucrative codes are billed two to three times more often in some cities than in others, costly variations government officials said they could not explain or justify. In some instances, higher billing rates appear to be associated with the burgeoning use of electronic health records (EHRs) and billing software.
  • Medicare administrators have struggled for more than a decade to crack down on medical coding errors and abuses, often in the face of opposition from medical groups, including the American Medical Association (AMA), which helped design and now controls the codes. Whether they make honest mistakes or engage in willful misconduct, there’s little chance doctors who pad their charges will face any serious penalties.

The Centers for Medicare & Medicaid Services (CMS) officials declined numerous interview requests made by CPI investigators. However, in an email response to written questions, officials said that while they believe most doctors and hospitals are “honest and try to bill Medicare correctly,” the agency also “is keenly aware that certain Medicare providers and suppliers seek to defraud the program.”

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