Healthcare Business News

HHS, Justice Department warn hospitals on EHR-related payment fraud

By Jessica Zigmond
Posted: September 24, 2012 - 8:15 pm ET

The Obama administration on Monday issued a stern letter to the nation's hospitals (PDF) that warned that HHS and the Justice Department will crack down on providers that misuse electronic medical records to bill for unprovided services.

In a letter Monday to five healthcare provider associations, HHS Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder said there have been indications that some hospitals use electronic health records to "game the system" to their advantage. For instance, facilities might "clone" medical records to inflate what providers are paid or "upcode" the care provided as a way to make a profit. Consequently, the CMS is specifically reviewing billing through audits to identify and help prevent improper billing.

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"Additionally, CMS is offering more extensive medical reviews to ensure that providers are coding evaluation and management services accurately," Sebelius and Holder wrote. "This includes comparative billing reports that identify outlier facilities."

American Hospital Association President and CEO Richard Umbdenstock was to quick to respond to the correspondence (PDF) in a letter that said more accurate billing and coding procedures do not necessarily equate with healthcare fraud. The AHA's letter also reiterated the organziation's earlier—and repeated—requests for national guidelines on how hospitals should report emergency department and clinic visits.

Since April 2000, Umbdenstock wrote, the nation's hospitals have followed the American Medical Association's evaluation and management codes to report facility resources for emergency department and clinic visits. "Recognizing that the E/M descriptors, which were designed to reflect the activities of physicians, did not accurately describe the range and mix of services provided in hospitals, CMS instructed hospitals to develop internal hospital guidelines to determine the level of clinic or ED service provided," letter said, adding that the AHA and the American Health Information Management Association first requested in 2003 that the CMS develop such guidelines. Although the CMS indicated in 2004 and 2005 regulations that it would create those guidelines, they have not been established, Umbdenstock continued.

The letter from Sebelius and Holder was also sent to the Federation of American Hospitals, the National Association of Public Hospitals and Health Systems, the Association of Academic Health Centers, and the Association of American Medical Colleges.

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