Coders Can Pay for Coding Mistakes
Understand the risks if you miscode.
By Michelle A. Dick
When claims for provider services aren’t coded and billed properly, financial liability often falls on the provider. What happens when the coder or biller is to blame for sloppy coding or claims processing? Do coders need to pay?
Individual Liability for Fraudulent Billing
The Federal False Claims Act (FCA) imposes liability on any “person” who knowingly submits a false claim to the government for payment or who “conspires” to submit a false claim for payment. Robert Pelaia, Esq., CPC, of the AAPC Legal Advisory Board said, “The FCA can be used as an enforcement tool against anyone who ‘causes’ a false claim to be submitted. That could include coders who ‘knowingly’ cause false claim submission” and individuals who participate in fraudulent submissions, if those individuals are part of the actions that resulted in the false claim. This can include individuals who are responsible for “preparing, computing, calculating and submitting to Medicare claims for” medical services provided by a physician. For example, the United States vs. Cabrera-Diaz and Arbona, 106 F.Supp.2d 234,242 (D. P.R. 2000).
In the Arbona case, Dr. Manual A. Cabrera-Diaz, an anesthesiologist, falsely submitted over $400,000 in Medicare billings in 1994 and 1995. His “billing secretary,” Esther Arbona, prepared and submitted Dr. Cabrera-Diaz’s claims. The U.S. District Court entered a civil judgment against both Dr. Cabrera-Diaz and Ms. Arbona for $1.3 million and found that they were “jointly and severally liable,” which means that the total amount of the judgment could be collected from either of them.
As for the FCA being used as an enforcement tool against false claim submissions, Pelaia said, “there are a lot of examples of this in the American Health Lawyers Association (AHLA)/AAPC book, Deciphering Codes: Fraud & Abuse for Coders and Coding Insights for Healthcare Lawyers to be released this summer.”
Resource tip: Deciphering Codes: Fraud & Abuse for Coders and Coding Insights for Healthcare Lawyers is designed to help coders and attorneys understand and navigate health care coding and the law. It discusses why proper coding is essential for health care facilities and professionals, coding sources (CPT®, ICD-9, HCPCS Level II, legal implications of improper coding, applicable fraud and abuse statutes and regulations, including Civil Monetary Penalties Law (CMPL), FCA, the Anti-Kickback Statute (AKS), and the Stark Law. There is also specialty-specific setting guidance. The book stresses the importance of a detailed compliance plan for coding and discusses cases brought by federal and state governments against health care providers for improper coding. You can purchase the book with a searchable CD-ROM.
Can a Coder be Fined Under FCA?
AAPC Legal Advisory Board member Michael Miscoe Esq, CPC, CASCC, CUC, CCPC, CHCC, CRA, said, “No doubt, FCA money penalties can be levied against coders, but I have never seen a ‘fine’ or penalty levied against a certified coder.” He added, “I haven’t found a reported case where a third-party billing service was the target of a False Claims Act prosecution. Miscoe has seen, however, “one or two notable cases brought against consultants based on the ‘caused a false claim to be submitted’ theory of FCA liability but the vast majority of cases go against the facility or the physician. He said, “It is possible, however, for coders to be targeted and in such cases, the lack of resources to mount a defense usually causes some form of settlement that would escape national reporting.”
“The only fines I am aware of are not fines at all but are civil money penalties authorized under federal statute,” said Miscoe. “There is a possibility of similar money penalties for fraudulent conduct under state false claims statutes.
“For a coder to be charged with fraudulent conduct let alone have a civil money penalty directed at them is essentially un-precedented except where the ‘coder’ is the spouse of the physician and/or was a financial beneficiary of the conduct.
“I have paid attention to the cases for years for evidence of a certified coder being implicated as a co-conspirator in a FCA case but I have not seen it yet,” said Miscoe.
When Coders Are Fined by Their Employer
Nancy Reading, RN, BS, CPC, CPC-I, said some coding companies will take “recoupment from coders for mistakes … but these employees are usually subcontractors and this is a matter of contract.” She added, “I am not certain how this could be done in a full-time employment situation legally.”
Miscoe agrees that it may be a matter of contract if a coder is fined by their employer. He said that if there “is a contractual ‘fine’ embedded in their contract with the hospital for errors leading to post payment recovery,” it’s possible.
Dorothy Steed, CPC-H, CHCC, CPC-I, CPUM, CPUR, CPHM, CCS-P, CEMC, CFPC, ACS-OP, RCC, RMC, PCS, FCS, CPAR, CPMA, said it could happen in the hospital setting, “If a hospital is the target of a RAC audit, the attending physician (and other MD) notes may be requested to support or discount hospital coding/billing, although the MD was not the target of the investigation.” She continued, “If a hospital must defend the audit, the skills of the coder will likely be closely scrutinized.” For example, “If the coder has coded CC/MCC to raise the reimbursement based upon implications rather than absolute statements by the physician, leading to significant payback,” Steed said, fines could be imposed. A fine “depends upon the specific employment arrangement.”
“Hospital coders are expected to meet accuracy standards usually in the mid-90 percent range.” Steed added, “Those who frequently fall below are usually subject to performance evaluation penalties or possible removal from the posi-tion—the ‘fine’ can take several forms.”
Debra A. Mitchell, MSPH, CPC-H, has seen coders penalized for sloppy coding firsthand. “I have had participants come to me [in confidence] at seminars to report that they have been fined and it is not pleasant,” she said.
Mitchell recalls reading about cases where coders have been fined but “the dollar amount was not revealed.”
“I have read other resources that state penalties are in the millions,” Mitchell said.
Protect Yourself From Monetary Liability
Read the fine print before you sign any contracts with employers to be sure there aren’t any embedded financial penalties within.
To protect yourself from coding error fines you “should always code from the documentation and follow the coding guidelines,” Mitchell said.
“As a coder, you should not append any code to a claim that is not supported by the documentation. If you make a mistake then it is just that, a mistake.” Mitchell added, “ If on a regular basis you assign the wrong codes because maybe you code from memory or you use a cheat sheet or you code from a superbill, then you are responsible for that code and it was not a mistake—it was intentionally applied.”
Everybody Pays for Improper Coding
Although it’s usually the providers who are held accountable, coders also may pay a price.
By Julie Chicoine, Esq., RN, CPC
I constantly hear coders expressing concern about personal liability for coding and billing issues. At the same time, U.S. Department of Health & Human Services (HHS) is taking a more proactive role for reviewing, paying, and monitoring Medicare reimbursements in the context of program integrity. In addition to the Office of Inspector General (OIG), the prime fraud and abuse overseer, other federal program integrity contractors and state enforcement agencies, have implemented initiatives to detect and investigate health care providers who submit false claims. Scrutiny is only going to get worse, but I think the outcome will be repayment or no payment and not necessarily enforcement actions.
The OIG’s compliance program guidance for physicians advises to fully document their services and implement compliance programs to reduce coding errors and, ultimately, financial risk. The OIG’s guidance redefined the term “erroneous claims” to assure physicians that the OIG is not looking for enforcement actions against practices for innocent billing mistakes. A pattern of submitting erroneous claims, however, may initiate an investigation. For example, episodic and isolated coding mistakes are not targeted, but continued misapplication of coding and billing rules either because the coding professional is cutting corners on accepted practices (i.e., coding standard only from documentation) or not keeping up to date (i.e., continuing education), can lead to an OIG enforcement action. This being said, ultimately, liability falls to the provider whose National Provider Identifier (NPI) the service was billed under and not the coder directly.
If such were the case, I could see the provider going after the coder for repayment after settling with the government. Given the high stakes with fraud and abuse liability, I could also see employers auditing coders for accuracy and taking mistakes out of the coder’s pocket.
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