Reversing an earlier position, HHS' inspector general's office said last week that third-party billing companies that submit claims to Medicare and Medicaid on behalf of providers won't be required to report suspected cases of fraud to federal authorities.
The new position is contained in a model billing-compliance program for third-party billing companies released last week by the agency. It went into effect immediately.
An earlier draft of the program had required billing companies to report suspected cases of provider fraud.
The 22-page set of guidelines is the fourth set of billing compliance rules released by HHS since 1997. HHS previously issued sets for clinical laboratories, hospitals and home health agencies. The guidelines offer instructions on how to file claims with Medicare and Medicaid without running afoul of existing fraud and abuse rules.
The latest set is likely to have the greatest impact because it addresses topics that apply to any provider or supplier that bills Medicare or Medicaid for services.
"This has broad applicability," said Gwen Gampel, vice president of government relations for the Healthcare Billing and Management Association, which worked with HCFA to draw up the third-party billing compliance program. "More than any of the others, this will be the seminal compliance program. (These are) exactly the issues-upcoding, unbundling-that physicians and other providers will deal with."
HHS Inspector General June Gibbs Brown said the billing company compliance program "affects virtually every segment of the healthcare industry."
Like the three previous sets, the new set is voluntary. However, Brown gave third-party billing companies an incentive to implement a compliance program that mirrors the government's: "The existence of an effective compliance program could mitigate any action taken against a billing company caught in subsequent wrongdoing," she said.
The extent to which they were responsible for reporting fraud was the biggest concern for third-party billers as the government drafted rules for third parties.
The first draft of the guidelines, issued earlier this year, would have required them to report suspected fraud by their healthcare-provider clients. The billing companies opposed that provision, arguing that they were not qualified to detect fraud and that having to report it would put a barrier between them and their clients.
"(Billing agencies) are never in the surgical center; we are never in the physician's examining room," Gampel said. "We're not practicing medicine. We're just a billing company."
The final version of the rules does require third-party billing agencies to report fraud within their own ranks to the government. An agency that suspects a provider client is committing fraud should, but is not required to, notify the client that a problem may exist. The agency also may terminate its agreement with the provider.
"We don't want to be put in the position of running to the government," Gampel said.
The program highlights 17 areas the inspector general's office believes are particularly vulnerable to fraud. Those include billing for undocumented services, duplicate billing, unbundling, upcoding, billing for discharge in lieu of transfer, outpatient services rendered in connection with inpatient stays and failure to keep records confidential.