U.S. District Judge David Ezra in Texas dismissed the whistleblower's complaint, which alleged that a Baylor executive created an upcoding scheme to systematically overcharge Medicare.
The judge said the whistleblower couldn't show that the hospitals were intentionally submitting false claims. He added that the alleged scheme was consistent with the government's own "encouragement" of hospitals to use the billing codes to glean as much reimbursement as possible from Medicare.
Judge Ezra quoted an old CMS regulation that stated the agency does "not believe there is anything inappropriate, unethical or otherwise wrong with hospitals taking full advantage of coding opportunities to maximize Medicare payment that is supported by documentation in the medical record."
The FCA lawsuit was filed in 2017 and focused on two secondary billing codes: for "complication or comorbidity" (CC) and "major complication or comorbidity" (MCC).
These codes can boost reimbursements anywhere from $1,000 to $25,000 if physicians or clinicians add them to claims. The whistleblower said Baylor's former system vice president for physician documentation and coding, Dr. Anthony Matejicka, trained and pressured doctors to amend their claims with these codes.
The judge concluded that Matejicka did indeed "spearhead" an effort to boost payments with these secondary codes, and that Matejicka intended to increase the number of upcoded claims.
But that's as far as the strategy went, and the whistleblower's case fell apart because it didn't show intentional fraud, Judge Ezra said.
"At most, plaintiff's complaint reveals that defendants made targeted efforts to encourage and incentivize diagnosing patients in a way that permitted the coding of CCs and MCCs," Ezra wrote. "But nothing in plaintiff's complaint implicates a conclusion that these targeted efforts requested, demanded or encouraged doctors and staff to diagnose in a way that was not justified by the physicians own medical opinions, judgments, and the medical record, beyond plaintiff's mere conclusion that that is what the efforts reveal."
Ezra went on to say that this kind of coding scheme "is not in and of itself one to submit false claims." He also said it is consistent with hospital strategies to boost their revenue through accurate coding that guarantees appropriate government payments.
He quoted a 2008 CMS inpatient hospital pay regulation where the agency said it "encourage[s] hospitals to engage in complete and accurate coding" and has "reaffirm[ed its] view that hospitals focus their documentation and coding efforts to maximize reimbursement."
"Targeted steps" to upcode doesn't necessarily mean fraud, Ezra said.