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Pulmonology Coding Alert

Avoid Coding Fraud:

Your Legal Responsibility and Liability

Published on Sun Jun 01, 2003

Beware: If you bill the government for a non-medically necessary service or for a service your staff didn't render, you along with others can be liable either civilly or criminally.

That's the warning posed by experts, such as Jason R. Levine, JD, a consultant and senior editor for Murer Publications at Murer Consultants Inc., a legal-based healthcare management consulting firm in Joliet, Ill. And you can't hide behind the biller. The coder can be liable for fraudulently billed services even if he or she didn't actually send off the bill, he says.

What Gets You Into Trouble

One of the many acts a fraudulent coder can violate is the False Claims Act.

A false claim occurs when a person presents, or causes to be presented, any claim for item or service, and knows, or should know, that the item or service was not provided as claimed or is false and fraudulent, or conspires to defraud, says Timothy P. Blanchard, JD, MHA, FHFMA, with McDermott, Will and Energy in Los Angeles.

The physician is ultimately responsible for the claim because his or her name is on it, but coders can be implicated if they possess knowledge of questionable activities without doing anything to change that activity. The terminology "knows" or "should know" includes actual knowledge, deliberate ignorance of information's truth, reckless disregard of it, and doesn't require a specific intent, Blanchard says. That means, he says, when you submit a false claim, investigators will consider:

  • a failure to study instructions as reckless disregard
  • studying the instructions as crafty manipulation
  • hiring a consultant for help as conspiring to defraud.

    These legal threats, although serious, shouldn't keep you from properly coding or reporting expensive or controversial services that deserve reimbursement. Neither CMS nor the HHS' Office of Inspector General (OIG) will seek to label innocent mistakes as fraud and abuse, Levine says. "What they are looking for is a pattern and practice of wrongful activity," he says, a systematic and deliberate practice over a period of time.

    You should simply make sure you understand what raises the feds' eyebrows, so you can cease any potentially fraudulent practices you or anyone else in your department are practicing, intentionally or otherwise. According to Levine, what CMS and OIG consider as redflag coding practices includes, but is not limited to:

  • Unbundling. Do not unbundle codes for services CMS requires to be coded and billed as one service or item, Levine warns. You can adhere to CMS' bundling guidelines by following Medicare's National Correct Coding Initiative (NCCI) edits. Remember, the edits apply to services billed by the same provider for the same beneficiary on the same date of service.

    In the NCCI edits, pay attention to code pairs with modifier 0 listed next to them. This indicates that you can never separately report and bill these codes, he says. Modifier 1 means that clinical circumstances may justify appending a modifier (for example, modifier -59, Distinct procedural service) for separate payment for the paired codes.

    You also have the mutually exclusive edit table, which lists pairs of codes you can't report together because a physician can't reasonably perform the services or procedures together, he adds.

  • Bundling. Though rarer than unbundling, bundling together services into a single code may also result in fraud and abuse, Levine says. When you lump an otherwise unjustifiable procedure into a standard service to warrant a higher reimbursement code, this is a practice similar to upcoding. For example, your pulmonologist makes phone calls and partakes in other administrative activities not otherwise billable. If you lump that time spent into a time-based code, you are wrongfully coding.

  • Upcoding. You cannot report procedure or revenue codes that describe more extensive or expensive work than the physician actually furnished, Levine says.

  • Presumptive coding. "Presumptive coding" based on diagnosis, for example, is not ethical coding, Blanchard says, citing a precedent court case. You should not code based on "service rendered" alone. You must consult medical record documentation, he adds.

  • Inappropriate coding criteria. Do not select codes based on inappropriate criteria such as percentage limits on lower-level codes (for example, setting the bar at 30 percent for reporting level-one E/M codes instead of reporting on a case-by-case basis), Blanchard says, citing, again, a precedent court case.

  • Other suspect practices. Blanchard provides this list of suspect practices your practice should avoid: bonuses for coders, employing coders without coding training, and coders never contacting physicians about medical practices. Review OIG reports regarding current audit issues and its compliance guidance to be extra safe.

    One way to avoid fraud if you discover you've made repeated and suspicious mistakes is to use the Voluntary Disclosure Program. If you voluntarily disclose your major coding errors to the carrier or commercial payer, you could avoid fines and penalties. But consult with counsel before doing so, Levine says. An instance in which voluntary disclosure might be the ideal route out of problems, for example, may be when you find out your computer system has systematically reported the wrong codes for procedures or for place of service, he says.

     

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