Coding experts say doctors and hospitals that don't prepare now for the upcoming federal crackdown on Medicare billing could face six-figure bills, referrals to fraud enforcers and possible jail time.
Bolstered by the success of its pilot Recovery Audit Contractors (RAC), which recovered some $304 million in 2006, the Centers for Medicare and Medicaid Services will go nationwide to find errant Medicare billing as early as this fall. A CMS final report on the RAC project is expected out in mid-May.
RACs are paid based on what they find. According to Michael Miscoe, a certified professional coder with almost two decades of billing experience, that's hardly an unbiased audit, but you can't fight City Hall. Miscoe provides coding advice to attorneys defending providers who've been socked with Medicare audits and paybacks ranging from $10,000 to $1.2 million.
"Compliance is way cheaper than the post-payment gunfight," Miscoe said. To take an audit review to the highest level of Medicare's review system can cost a provider up to $30,000.
Miscoe said the cases have been rising exponentially over the past 10 years. He predicts CMS will "have a field day" when the crackdown begins.
Miscoe's best advice to providers: "Listen to your coders and document the way you need to in order to avoid becoming a target. Watch your billing profiles and don't cluster around one level of a code."
Under the new RAC program, doctors and hospitals could be asked to provide documentation to support the bills they submitted to Medicare as far back as 2007. According to one expert, hospitals could expect to get several requests for documentation per week.
Julie Chicoine, a lawyer, registered nurse and certified professional coder, said she is considering implementing internal audits at Ohio State University Medical Center, where she is the compliance director.
Chicoine said the medical center is putting together a task force of doctors, hospital managers, IT experts and others to plan a way for handling the audit letters. Her hospital will focus on checking how well it is documenting for Office of the Inspector General "hot buttons," such as those listed in the last RAC report.
A private audit would allow the hospital to find inadvertent documentation errors and allow time to resolve them before the crackdown, in some cases reporting them to the Medicare payment contractor in advance, Chicoine said.
Sheri Poe Bernard, head of the American Academy of Professional Coders national advisory board, said doctors often lack a regulatory background and an inclination for coding.
"Most doctors think they are doing what's best for their patients and feel their intentions are good, so what can go wrong? The fact is a lot can go wrong," she said.
Bernard said doctors should beware of new electronic medical record software that claims to provide compliant coding automatically. "Right now it's very rustic," she said. "There's so much development involved in a system, it's no surprise. More than ever, it's important to have coders."
The RACS will have certified coders on their audit teams, she added.
Bernard said documentation has been less than perfect and overlooked by CMS. This crackdown is part of an evolution that will happen painfully fast, she said.
She said providers who find their own shortcomings and report them will have a better opportunity of negotiating down their fines. If they set a course of creating the correct documentation to match billing, they will avoid trouble in the future. However, they won't be able to correct documentation CMS audits back to 2007, she said.