Yes, you can be held liable. I would educate the physician again and explain that as a certified coder you are ethically responsible to follow the coding guidelines. Explain why you feel that is not the correct code. Ask him his reasons for "always" wanting to use that code. Physicians are usually not up to date with changes in guidelines and codes. Do it in a learning/teaching way. You have to know when and how to approach the provider. Explain that upcoding is fraud and if the catheter is not left in then it is being coded incorrectly.
If you are that worried about it, then it is probably wrong.
I tell my docs that I am not going to jail with them or for them and that orange clashes with my red hair. I try to keep it light. I am fortunate that my physicians trust my judgement.