Increased scrutiny
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Dermatologists should prepare as government ramps up enforcement of fraud, abuse laws

Increased government scrutiny and enforcement of the fraud and abuse laws are expected down the road. But dermatologists who are vigilant about monitoring the ever-changing regulatory horizon will have a better chance navigating the bumps and avoiding the pitfalls.

Fighting fraud, waste, and abuse is the first of four goals cited by the Office of Inspector General (OIG), Department of Health and Human Services (HHS), in its Strategic Plan for Fiscal Years 2014—2018 released in November 2013. The strategic plan, which will guide OIG’s efforts in the coming years, notes that the agency’s efforts have resulted in estimated savings and expected recoveries of misspent funds totaling approximately $15.4 billion in Fiscal Year 2012 alone. For the first half of Fiscal Year 2013, the OIG expected recoveries of approximately $3.8 billion, according to its semi-annual report to Congress last spring. Staggering settlements coupled with other OIG actions, including tightening standards for its Recovery Audit Contractors and launching an online submission process for providers who wish to voluntarily disclose self-discovered evidence of potential fraud, are all indications of the agency’s growing efforts to combat fraud and abuse. 

Expect more audits

Mark Kaufmann, MD, a member of the AAD’s Health Care Finance Committee, is convinced that there will be more audits being conducted and more punishments being doled out in the years ahead. The reason is that various government agencies, such as the OIG and HHS, want to demonstrate that they are capable of ensuring the efficiency and effectiveness of their programs and operations. “The way they measure that is by recovering monies that have presumably been misspent,” he explained. If these agencies don’t demonstrate their capabilities, their concern is that they will be supplanted by such committees as the Independent Payment Advisory Board, established by the Affordable Care Act to rein in Medicare spending growth. [pagebreak]

Carl Leichter, MD, a member of the Academy’s Coding and Reimbursement Task Force, agrees that more audits are on the horizon. “It’s a budget issue. The government is finding that doctors are not adequately documenting their medical records, so it can take back money. Why wouldn’t it?” he said. “Medicare calls it fraud and abuse, and we call it confusion and mistakes.”

A question of ethics, professionalism

While many of those audits may reveal errors due to mistaken or confusing coding practices, some reveal Medicare fraud, such as violating the False Claims Act by accepting illegal kickbacks and billing the Medicare program for medically unnecessary services. Unfortunately, a handful of dermatologists are among the physicians who have been involved in defrauding Medicare and private insurance companies for millions of dollars. In fact, one of the largest settlements, for $26.1 million, involved a dermatologist.

“When the public reads about any physician involved in Medicare fraud, it doesn’t single out a specialty as much as the profession as a whole,” said Stephen Webster, MD, chair of the AAD’s Ethics and Professionalism Committee. This type of behavior is a breach of the public trust, which is an issue of ethics and professionalism. That is why the Academy has been increasingly emphasizing both. They are the focus of lectures at its annual meeting, articles in Dermatology World and the JAAD, and discussion groups and forums.

“Unfortunately, there are unscrupulous and unethical individuals in every profession, including medicine,” added Lisa A. Garner, MD, chair of the AAD’s Ad Hoc Task Force on Perception. “When a handful of physicians are engaged in fraud and abuse, it makes all of us come under closer scrutiny. Even individuals who have made an honest mistake, without the intent to commit fraud, are viewed questionably.” [pagebreak]

Remaining in compliance

Because even ethical physicians can make a coding mistake due to a lack of knowledge, the key to remaining in compliance with the fraud and abuse rules is to keep current with them. That may be easier said than done as changes in coding occur fairly frequently. “It’s a fluid field,” Dr. Garner said. “You need to work at it.” It’s important to understand that just because your coding has never been questioned doesn’t mean that it’s correct. A random audit can determine that you are coding incorrectly, she said, and it doesn’t matter that you’ve always done it this way.

Be sure to question codes that are unclear, especially those with which you are unfamiliar, such as those that pertain to procedures or treatments that you recently began offering. If a code doesn’t make sense, ask a knowledgeable individual about it or contact the AAD for an interpretation. Getting more than one opinion about the appropriate use of specific codes may be helpful. Ultimately, it only matters that the Centers for Medicare and Medicaid Services (CMS) believes that the code is being used appropriately, she noted. Managed care organizations tend to follow CMS’s lead.

“Unfortunately, it’s the era of practice that we live in,” Dr. Kaufmann added. “We just have to keep reading what’s new and what physicians are being audited about.” He also suggested following OIG’s missive to develop a voluntary compliance program, which entails naming a compliance officer and conducting self-auditing. It is available online.

The Academy keeps its members abreast of the latest coding changes through its “Cracking the Code” column in Dermatology World, the quarterly Derm Coding Consult newsletter, and email alerts. (It also offers resources for sale, including compliance manuals and webinars; see Other dermatology organizations, such as the American Society for Dermatologic Surgery, American Society for Mohs Surgery, and American College of Mohs Surgery, provide pertinent information as well. Local Medicare Administrative Contractors are another valuable source for this type of information, noted Alexander Miller, MD, who represents the AAD on the AMA-CPT® Advisory Committee, is chair of the AAD’s Medicare Contractor Advisory Committee, and authors the “Cracking the Code” column. [pagebreak]

Dr. Miller recommended reviewing the OIG’s annual Work Plan for Fiscal Year 2014 to gain some insight about the specific topics on which the agency will be focusing. The 2014 Work Plan, released this past January, showed the agency continuing to focus on the three issues of interest to dermatologists addressed in the Work Plan for Fiscal Year 2013: reassignment, incident-to billing, and evaluation and management (E/M) services.

Reassignment, which enables physicians to be paid directly by Medicare, raised concerns about whether physicians were complying with the assignment rules and whether beneficiaries were being appropriately billed in the amounts allowed by Medicare. “Incident-to billing” refers to physicians billing for services rendered by ancillary personnel, such as physician assistants and nurse practitioners, in the office. In order to bill this way, physicians must be on the premises and available to assist the entire time that the ancillary personnel are providing these services. An increase in E/M services as well as an increased frequency of medical records with identical documentation across services raised questions as to whether physicians have the documentation to support the level of services billed. Read more about these three issues at

EHRs may spell trouble

Ironically, the adoption of electronic health records (EHRs) may, in part, be responsible for creating higher levels of billing and causing the increase of duplicative documentation, also known as cloning, because many of them offer documentation templates.

A dermatologist with an EHR that uses a template system is at increased risk for being audited, according to Dr. Kaufmann, who is chair of the Academy’s EHR Implementation Work Group. “For years, dermatologists were told to go electronic or we would get audited,” he said. “It turns out that it’s probably just the opposite.” The government pushed EHRs touting that they provided more accurate documentation. Now that physicians are getting on board with EHRs, Dr. Kaufmann said, the government is saying that EHRs are not providing more accurate documentation. The once-big selling feature — templated documentation — has become a liability. [pagebreak]

Moreover, each Medicare carrier can use its own definition of cloning, he explained. In Florida, one carrier defines cloning as when the medical record is either “exactly alike” or “similar to” either “previous entries” or “from patient to patient.” The carrier is, in essence, reserving the right to audit a physician’s medical records and if they contain similar notes, the carrier can deny payment for E/M services, claiming that the work was not done. He emphasized that there is a difference between not providing care and providing the same care and treatment to different patients for the same condition.

To combat the cloning of documentation, be sure to change more than just a few words in the medical record, Dr. Kaufmann suggested. “Change something in the physical exam, assessment, or treatment plan to show that it’s not the same.” Make sure that the EHR notes have a preprogrammed and individualized section, Dr. Leichter added. It is essential to be able to document patient-specific data even in templated documentation.

Not only will dermatologists participating in Medicare incentive programs for the meaningful use of certified EHR technology face greater scrutiny, so will those participating in the Physician Quality Reporting System (PQRS). With the introduction of the penalty phase for non-participation, there will be even more providers complying with PQRS, Dr. Kaufmann noted — and the data they submit can be audited to ensure its accuracy.

Another thing to watch for with EHRs is that they frequently include a review of systems as part of the patient visit. Make sure that a review of systems is included only when it is medically appropriate, Dr. Leichter warned. If there’s no change in the patient’s condition or treatment options, then a review of systems isn’t medically necessary.

Modifiers being targeted

Generally speaking, dermatologists are heavy utilizers of modifiers “because we see patients with many different skin problems,” Dr. Kaufmann said. “The modifiers allow us to appropriately bill for all of the work that we do.” [pagebreak]

Dermatologists can expect the OIG to continue its scrutiny of the use of modifiers, he added. Dr. Kaufmann points out that the 2013 Work Plan had a whole section on modifiers, most notably those for the 10- and 90-day global period. Global modifiers allow a dermatologist to be paid for treating a patient for an entirely different problem for which he/she is being treated during the global period of a code related to a previous treatment.

The 25 modifier is another one that will be closely scrutinized, said Dr. Miller, who also serves on the AAD’s Health Care Finance Committee and Coding and Reimbursement Task Force. A 25 modifier is defined as a “significant, separately identifiable E/M service performed by the same physician on the same day of the procedure or other service.” If, for example, a dermatologist is biopsying a lesion suspicious for skin cancer on a patient who asks the dermatologist to evaluate a new lesion or examine an unrelated rash, an E/M code and 25 modifier would be appropriate to use as these services are unrelated to the biopsy procedure. Additionally, it is appropriate to use the modifier to distinguish billing for E/M services beyond those included in the valuation of minor surgical procedures.

Dermatologists deciding whether a 25 modifier is appropriate to the service provided should consider such factors as the insurer’s payment policy regarding this modifier, whether the patient is a new or established one, if a minor surgical procedure (one with a 0- or 10-day global surgical package) was performed, if the E/M service was beyond that included in the procedure code valuation, and if the separate E/M service was appropriately documented.

Go straight to the source

The OIG offers a plethora of compliance materials on its website to help physicians and other health care providers establish good practices, noted Julie Taitsman, MD, OIG’s chief medical officer. The Compliance 101 and Provider Education section of the website is the agency’s central repository for guidance and educational materials. Among them is a self-study booklet, entitled A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse, that has a companion PowerPoint presentation and speaker notes. [pagebreak]

These materials summarize the five main federal fraud and abuse laws, namely the False Claims Act, the Anti-Kickback Statute, the Stark Law, the Exclusion Statute, and the Civil Monetary Penalties Law, she said. They provide tips on how physicians should comply with these laws in their relationships with payers (e.g., the Medicare and Medicaid programs), vendors (e.g., drug, biologic, and medical device companies), and fellow providers (e.g., hospitals, nursing homes, and physician colleagues).

“Accurate, complete, and usable documentation is a professional responsibility that is integral to providing quality patient care,” Dr. Taitsman said. “Proper documentation, both in patients’ medical records and in claims, is important to protect federal health care programs, to protect health care providers, and, most importantly, to protect patients.”

Should a dermatologist discover an error in coding or documentation, never falsify a record, she warned. If a correction needs to be made, do it honestly and clarify when the change was made and by whom, Dr. Taitsman elaborated. “If you find a record that shows Medicare payment was improperly claimed, you might need to repay the money,” she added.

For more egregious problems, Dr. Taitsman said, consider using OIG’s Provider Self-Disclosure Protocol. Self-disclosure gives providers the opportunity to avoid the costs and disruptions associated with a government-directed investigation and civil or administrative litigation. The OIG endeavors to work cooperatively with providers who are forthcoming, thorough, and transparent in their disclosures in resolving these matters. It consults with other agencies, such as the Department of Justice, as well. “You might consider talking to experts within your institution or outside counsel to figure out your responsibilities and best course of action to address the particular situation,” she added. [pagebreak]

“Unfortunately, once a violation has occurred, it may actually be too late to avoid a prison sentence or large settlement,” Dr. Taitsman said. “That is why we emphasize having a robust and effective compliance plan to prevent violations on the front end. We cannot emphasize enough how important it is to educate yourself and educate your employees to make sure you get it right the first time and avoid getting into the noncompliant situation in the first place.”

Firsthand audit advice

By 2009, Carl Leichter, MD, had undergone three Medicare audits. The first two he passed without any problems. The third one did not go as well. Dr. Leichter believed that he was coding properly, but he soon discovered that the rules he was following were no longer accurate.

Halfway through the audit, Dr. Leichter contacted the auditor, who told him that Medicare was going to deny half of his visits. When the conclusions that the auditor was making did not make sense to Dr. Leichter, he asked to speak with the medical director before the audit was completed. The next day, Dr. Leichter received a letter saying that the audit had been completed. He eventually did speak with the medical director, but the process dragged on for three more months, coming up against Dr. Leichter’s deadline to appeal the audit.

During the audit process, he learned a few valuable lessons that Dr. Leichter said prepared him for his next audit, “whenever that’s coming.”

Although Dr. Leichter was advised to send notes pertaining only to the specific dates for which the auditor requested information, he suggests sending the entire patient scenario. “If you’re seeing a patient with skin cancer, provide the patient’s history and risk factors that caused you to expand your scope of the visit beyond the patient’s chief complaint,” he said. “You need to paint the picture you saw when the patient walked into the room.” Don’t assume that because Medicare has all the previous codes billed for the particular patient, the auditor will know what happened prior to the specific dates. “They didn’t pay attention to anything but that date,” he said.

Another lesson learned is to provide detailed documentation about the visit. In his original notes, Dr. Leichter wrote “sunscreen protection discussed.” When providing additional information to the auditor, he wrote “participated in a full discussion of the physiology of sun exposure on the skin as well as provided pamphlets about sun exposure and the importance of sunscreen in protecting the skin and samples of sunscreen products.”

“Dermatologists tend to trivialize what we do,” Dr. Leichter said. For example, when a dermatologist looks at a patient’s back and notices seborrhea keratosis, he/she is actually looking at multiple individual lesions, evaluating them, and deciding that they are benign and do not require any treatment. All of that needs to be written down in the medical record, he said. “We’re doing the work, we’re just not documenting it accurately.”

Dr. Leichter recommends making copies of all the records to send to the auditor. If they are not legible, he suggests dictating and then sending them. Be sure to send all documents return/receipt. Designate one individual as the point person to communicate with the auditor. Try to speak with auditor to get a sense of where the problems lie in order to address them during the audit. If you’re unhappy with the results of the audit, review them with the medical director. But most of all, he said, be sure to change whatever is incorrect going forward.



Firsthand audit advice