A September 15 article in the Washington Post examines an area of increasing focus in healthcare – fraudulent and abusive Medicare billing practices. 

The article, Doctors, Others Billing Medicare at Higher Rates, by Fred Schulte, Joe Eaton and David Donald, of the Center for Public Integrity, discusses how, over the past decade, a noted increase has appeared in the amount care providers are billing Medicare.  The article goes on to say that “the aggressive push to electronic medical records is likely fueling the trend toward higher codes…”

By definition, “fraudulent” implies intent to steal or cheat, whereas “abusive” implies theft without prior intent.  Nevertheless, abuse results in over-charging for medical treatments. 

In fact, for more than two decades, Medicare has maintained a policy on fraudulent and abusive billing. More recently, the Centers for Medicare and Medicaid Services deployed a RAC audit program, where a recovery audit contractor (RAC) assesses possible fraudulent or abusive Medicare billing practices – primarily targeting hospitals. 

I have been around this space for the bulk of my multi-decade career.  In my experience, and in talking to my expert colleagues, the current billing practices among hospitals are much more aligned with down-coding than up-coding.

The reasons for this cover many areas, some of which I’ve included here.

1. Most hospitals are still challenged in creating documentation for treatments; due to these challenges, charges that could be captured are not. Yes, a hospital can undertake a retrospective review to find these missed charges; however, such reviews are often too expensive, out-weighing the value of the charges not captured. 
    
2. Many hospitals have implemented stringent policies to ensure that, should they become subject to a RAC audit, that their programs will be “squeaky clean,” that is, totally beyond reproach. Loss of reputation and credibility in the community is one of the many things hospitals want to avoid in a RAC audit. Although outliers always exist, most hospitals code conservatively.
    
3. When providers adopt better care practices at a higher cost, we should be cautious to avoid inadvertently identifying this practice as up-coding. Hospitals delivering better care and charging more for it may also find overall costs are less. For example, the use of drug-eluding stents exploded onto the healthcare scene when first introduced. The cost for the procedure is probably 2-3 times more than before their use. However, steep declines in post-operative sepsis, a major source of hospital-acquired infections, has reduced the rate of deaths due to treatment. Is there a real issue here? What are the metrics we should focus on? At a minimum, the metrics should be placed into context with better standards of care.
    
4. The Washington Post article suggests that an electronic health record system exacerbates fraud and abuse – but does it really? The opposite argument can more readily be made, because the existence of structured data in electronic form makes it more easily interrogated; detection of true fraud and abuse become easier to uncover, at far less expense. Today’s systems, it must be said, still capture too much data in free form text, making the exercise of auditing extremely costly.

To argue that the existence of something good for healthcare in many other ways, such as having the right information at the point of care when it’s needed, is actually bad because outliers use it to misrepresent claims activity is deeply flawed.

Through the best use of health IT and management systems, we have the opportunity to improve the quality of care, reduce medical errors and increase patient safety. Don’t let the arguments of some cast a cloud over the critical importance and achievement of digitizing patient health records.

Surely, no one can argue paper records are the path forward. Name one other industry where this is the case. I can’t. 

Let’s not let the errors of a few become the enemy of good.