Medicare Compliance & Reimbursement

Plus:  Doctor gets one-year sentence for false billing.

Physicians who are getting shortchanged by the current geographic payment system have a new ally in the Government Accountability Office (GAO).

The problem: Medicare has 89 physician payment localities and adjusts your payment levels depending on which locality you're in. Seven California counties have sued the Department of Health & Human Services, saying their doctors receive much lower rates than doctors in nearby counties. The GAO notes that Medicare allowed some states to consolidate their entire state into one payment locality in the 1990s, while other states are still fragmented.

More than half of the current localities had counties where physicians' costs were at least 5 percent more or less than Medicare's estimate for the region, the GAO said. These 447 counties were located all over the country but especially in Georgia, California, Minnesota, Ohio and Virginia.

The solution: The GAO urged the Centers for Medicare & Medicaid Services (CMS) to fix all the payment localities fees based on a national standard. After that, CMS should update the localities' fees on a regular basis.

The response: CMS prefers its current squeaky-wheel approach. That is, when one particular locality raises issues with its payment rates, then CMS will address the problem on a case-by-case basis. Prediction: This will only make the current situation worse because the localities that complain most will get the best treatment, the GAO warns. CMS said it would consider the GAO's suggestions but added that it might create too much of an administrative nightmare. Absentee Doctors Can't Claim Supervision If your physicians claim to have supervised treatments when they were away from the office, they could go away for a lot longer.

The U.S. Court of Appeals for the Tenth Circuit upheld a 12-month sentence for Larry Stoddard, a Utah physician who admitted that he falsely claimed he supervised hyperbaric oxygen treatments when he wasn't actually present.

Stoddard claimed the sentence was excessive, but the court said it needed to deter him from committing any more fraud.