Compliance Update for Anesthesiologists


May 2, 2011

The Medicare and Medicaid programs continue to lose large amounts of money to fraud and abuse. In 2010, the amount recovered by the Centers for Medicare and Medicaid Services (CMS) exceeded $4 billion. During the first quarter of this year, Medicare’s bounty hunters, the Recovery Audit Contractors (RACs), collected $162 million in overpayments, up from $75.8 million in the last quarter of 2010. The sheer magnitude of the recoveries explains the Office of the Inspector General’s (OIG’s) ongoing strong interest in detecting and prosecuting fraudulent billers – and its prophylactic efforts to educate physicians, hospitals, medical equipment suppliers and others on how to avoid fraud.

1. Detecting and Prosecuting Fraud

There are more entities whose mission is to root out medical billing irregularities than at any time in the past. Medicare has not only the basic Medicare Administrative Contractors (MACs) and the RACs, but also the Program Safeguard Contractors (PSCs) and Zone Program Integrity Contractors (ZPICs). More recently, Medicaid Integrity Contractors (MICs) have appeared on the scene. As the government becomes increasingly aggressive about enforcing rules regarding improper payments, physician practices face heightened scrutiny of their billing operations and a greater risk of audits

According to Abby Pendleton, Esq., who spoke on the Fraud and Abuse Environment for Anesthesiologists in the first webinar in a series of online programs jointly sponsored by Tulane University School of Medicine - Department of Anesthesiology and ABC, private payers, too, are now contracting with third party recovery vendors. They are also deploying, more effectively than ever, internal audit and fraud and abuse units. We are aware of several Blue Cross Blue Shield carriers that are seeking or have successfully pursued refunds from anesthesiologists or pain physicians. In one instance, the carrier contended that all post-operative visit services were bundled in a so-called “anesthesia global package” (a position previously taken by a RAC, and subsequently reversed). In the other, a pain practice was subjected to more than $800,000 worth of restitution and penalties for having billed for the use of a certain piece of physical therapy equipment. Although Medicare wasn’t involved, the carrier relied on a medical necessity policy published by the MAC for the jurisdiction in issue.

2. Educating Providers

One CMS educational initiative is the publication of a new quarterly newsletter intended to help health care providers understand the top billing errors identified by Medicare contractors. In the current newsletter (Vol. 1 No. 2), CMS describes several problems identified by RACs that affect physicians, including:

  • Incorrectly billing for new patients
  • Evaluation and management (E/M) billing during a global surgery procedure
  • Chemotherapy administration and non-chemotherapy injections and infusions- correctly billing

As noted above, the RACs and other payers have tried to define a global “anesthesia care package” that would bar billing for E/M services during the perioperative period.

Last November, CMS published “A Roadmap for New Physicians - A Guide to Avoiding Fraud and Abuse,” after some 90% of all surveyed medical schools and training programs expressed an interest in having some instructional materials on the subject of the False Claims Act and other anti-fraud statutes. The Roadmap is directed at physicians entering practice, but it is a useful reference for anyone involved in compliance. It offers a window into the thinking of the OIG and the OIG’s perspective on the wide range of issues summarized within its 30 pages.

The Roadmap analyzes risks in the context of three different types of relationships:

  • Relationships with payers
  • Relationships with other physicians and providers
  • Relationships with vendors

Regarding the first type, relationships with payers, the Roadmap points out that “Many States also have adopted similar laws that apply to your provision of care under State-financed programs and to private-pay patients. Consequently, you should recognize that the issues discussed here may apply to your care of all insured patients.”

The fundamental rule vis-à-vis payers is to report your services accurately. By submitting a claim to Medicare, you certify that that you have complied with the requirements to bill for the particular service. If you knew or should have known that the submitted claim was false, then the attempt to collect unearned money is unlawful. Examples of improper clams include:

  • Upcoding (to a higher level of service than provided, e.g., reporting a Swan Ganz as a right heart catheterization);
  • Billing for services not rendered (e.g., adding time units after the anesthesia clock has stopped);
  • Billing for services performed by an improperly supervised or unqualified employee;
  • Billing for services of such low quality that they are virtually worthless; and
  • Billing separately for services already included in the fee, like billing for an evaluation and management service if you do not do more than a standard pre-anesthesia evaluation.

One area to which anesthesiologists and pain specialists should pay special attention is medical necessity. As an example, over the years various Medicare and private carriers have declared anesthesia medically unnecessary for routine screening colonoscopies in healthy patients. Currently there is significant controversy over the necessity for anesthesia for nerve blocks, as well as for transforaminal and facet joint injections. If the anesthesiologist has reason to know that Medicare or any other payer has policies stating that anesthesia or the pain procedure is not medically necessary, a claim would be fraudulent.

Claims for services that are perfectly legitimate may raise suspicion if they are not properly documented. As the OIG reminds us, documentation is “one of the most important physician practice compliance issues.” The record should be complete and legible. The documentation for each encounter should include the reason, relevant history, exam findings, prior test results, assessment, clinical impression or diagnosis, plan of care, date and identity of the observer.

The second type of physician relationships that can create compliance problems are those with “fellow providers: physicians, hospitals, nursing homes, etc.” The government’s concern is that physicians who receive something of value from an entity or professional to whom they can refer patients may be influenced by the potential financial benefit and not just by the patient’s needs. Either receiving or giving something of value in exchange for referrals is a criminal violation of the anti-kickback statute (AKS) and can give rise to a civil false claim in addition. The law against self-referrals, i.e., the Stark law, raises a similar potential conflict of interest if the physician has a financial interest (including receipt of a stipend) in the entity or services to which he refers patients for certain services. To determine whether a relationship or transaction may violate one or the other of these two statutes, the Roadmap suggests asking the following questions and states: “If the answer is “yes” to any of them, you should consider carefully whether you are investing for legitimate reasons.”

  1. Are you being offered an investment interest for a nominal capital contribution?
  2. Will your ownership share be larger than your share of the aggregate capital contributions made to the venture?
  3. Is the venture promising you high rates of return for little or no financial risk?
  4. Is the venture or any potential business partner offering to loan you the money to make your capital contribution?
  5. Are you being asked to promise or guarantee that you will refer patients or order items or services from the venture?
  6. Do you believe you will be more likely to refer more patients for the items and services provided by the venture if you make the investment?
  7. Do you believe you will be more likely to refer to the venture just because you made the investment?
  8. Will the venture have sufficient capital from other sources to fund its ongoing operations?

There are many safe harbors under the AKS, and many fact situations that constitute exceptions to the Stark law. If the safe harbors and exceptions ever become relevant to you, it will be time to consult experienced counsel. For the time being, it is sufficient to know that the legitimacy of a transaction between a referring physician and another provider to which he refers patients often depends on fair market value being paid. In the memorable four-word summary of one exhibitor at a health law trade show, “FMV good … Kickback bad.”

The OIG’s Roadmap contains numerous examples of proscribed physician conduct. We regard it as a standard reference and recommend that you do likewise. We will, as usual, try to answer all questions that we reasonably can.

With best wishes,

Tony Mira
President and CEO