The Healthcare Fraud That Wasn’t: Investigative Report Bashes Providers without Hard Evidence

Earlier this week an investigation by the Center for Public Integrity made national headlines for accusing healthcare providers of billing Medicare for $11 billion in “questionable” fees.

The articles accuses doctors and other providers of upcoding and other offenses. And yet after a year-long investigation resulting in an article of almost 5,000 words, the authors of the article failed to find a single concrete example.

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Instead the reader is treated to an article that is “journalism” played in the same general tones as the current stream of political advertisements that on one side slam President Obama for hurting senior citizens by cutting more than $700 billion out of Medicare and, on the other side, bash the Representative Ryan for trying to put an end to “Medicare as we know it.”

The reporters found a trend — that healthcare providers over the past 10 years have increasingly billed Medicare under the two Evaluation/Management codes, 99124 and 99125 that reimburse at the highest rates. And even though they were told repeatedly by healthcare experts the reasons behind that increase, they instead ascribed it to what can only be considered wide-scale fraud by healthcare providers.

“Investigative” reporting proved nothing

The investigative report oozes what journalists commonly refer to as “weasel words,” beginning with the headline which is emphasized here in italics: “How doctors and hospitals have collected billions in questionable Medicare fees.” There is a bigger weasel word in the subhead: “Center investigation suggests costs from upcoding and other abuses likely top $11 billion.”

“Questionable” and “suggests” mean that the authors found nothing definitive. If they had, the headline and subhead would have read, “How doctors and hospitals have collected billions in illegal Medicare fees. Center investigation discovers costs from upcoding and other abuses likely top $11 billion.”

Also, that $11 billion is over 10 years, a small percentage of the total Medicare reimbursements to physicians and hospital outpatient services of $1 trillion dollars. The subhead should have read, “Center investigation finds increased coding nets doctors an increase 1.1 percent over 10 years.”

Here’s the first paragraph — the “lede” in journalism parlance — again with the weasel words highlighted: “Thousands of doctors and other medical professionals have steadily billed higher rates for treating elderly patients on Medicare over the last decade — adding $11 billion or more to their fees and signaling a possible rise in medical billing abuse, an investigation by the Center for Public Integrity has found.”

Leaving money on the table

Is there fraud? Absolutely there is. But somehow the reporters of this piece couldn’t find it, not even one example, despite their extensive research.

The reporters had to “bury the lede,” because otherwise their story wouldn’t have made it into the Washington Post, Huffington Post, or onto PBS. Midway through the story they quote Thomas Scully, one of the men behind Medicare reimbursement system under President George H.W. Bush. Sully “said it was put in place in order to curb rising doctors’ fees, but Medicare’s pay hikes have been too small to match rising medical office expenses,” according to the Center for Public Integrity story. “Many doctors have responded by picking the highest codes possible, he said.”

The article then quotes Sully directly. “You are going to pedal faster and code more aggressively,” he said. “I’m not sure it’s malicious. It’s a fact a life.”

Among healthcare provider circles, there is a phrase repeated over and over — “leaving money on the table.” If there is a dollar to be reimbursed, today’s practitioners will find it. Web sites such as this one and a dozen others are all about helping professionals collect every penny that they are entitled to — by law. There are hundreds of tools available to providers to help them increase Medicare collections — legally.

Innuendo and distortions

The authors, apparently unable to directly connect the increase in 99214 and 99215 codes with any specific example in fraud, instead resort to speculation and doctor bashing. For example, the authors write, “Medical organizations also teach their members ways to code at higher levels legitimately. In one 2009 article, the academy of family physicians noted that using the second-highest level for most office visits could put an additional $30,000 to $75,000 in a doctor’s pocket.”

There even was a link to the article, which appears on the American Academy of Family Physicians website. Here’s what it says:

Even in a Medicare population with its inherent complexity of care, family physicians still code half of their evaluation and management (E/M) established patient services as 99213 and only about a third as 99214. It is widely believed that, despite residency training and admonitions thereafter, most family physicians undercode and many underdocument. Fixing these problems can be of enormous financial benefit to the practice. Assuming current Medicare payment rates, changing to a distribution where most of the codes are 99214 could yield an additional $30,000 to $75,000 per full-time physician per year (how much depends on where you begin and how close you get to an ideal distribution of codes) … This shift would have to stand up to audit, but it would be a lifeline to resource-starved practices that currently see no escape from “hamster wheel” medicine.

Note that the reporters wrote that, according to the article, the coding would “put an additional $30,000 to $75,000 in a doctor’s pocket.” That’s an obscene slur. Gross revenue does not go directly to a physician. The article is filled with mischaracterizations such as this.

The real story

There is a story here, and one that has great implication, had the authors bothered to look for it. Hospitals and physicians practices are becoming much more efficient at coding and billing Medicare. The Centers for Medicare and Medicaid Services have sicced collection agencies on providers via RAC audits, but as a recent study  by the American Hospital Association has shown, providers are getting more canny at getting surviving audits and getting denials overturned — again, not by doing anything illegal, but by playing within the system.

Where this is going is that despite the fact that providers are becoming more efficient and effective at billing Medicare, they are tapping into a finite pool of money, and one who is slated for reduced growth in coming years. At some point, reimbursements will not cover Medicare costs. What then?