When they bill a procedure, physicians match their work with a special code for reimbursement. Sometimes – all too often – there is a mismatch, and the numbers don’t add up.

It is becoming so confusing that many docs don’t want to deal with it, but that causes problems up the road, as physicians and health systems evaluate procedures, the kind of diseases being treated, and reimbursement. Lots of money is being lost all around.

Incorrect coding is to blame for nearly half of improper claims submitted to Medicare, and the monetary losses increased from $57.8 billion in Medicare and Medicaid payments in 2015, and $68 billion in 2016. When the government is unsure what’s going on, it carries out what doctors dread: audits.

The audits themselves are causing disarray among physicians and hospital systems. Having conflict with the government is one thing, and that draws big headlines. But there is often the unspoken side to this: doctors and hospital systems are also hurting themselves, by improperly filing codes that cheat themselves out of millions of dollars and undermine their quality of care, says Adrian Velasquez, CEO and founder of predictive analytics provider Fi-Med, based in Brookfield, Wi.

Fi-Med touts its proprietary technology that has helped major hospital systems increase revenues and eliminate compliance risk through their software technology that identifies potential billing errors that can lead to overpayments. His clients include major hospital systems such as Mt. Sinai in New York, the Catholic Health Initiative and University of Alabama health systems.

“More hospitals are ripping themselves off; they aren’t compliant and they don’t have the right protocols, or are doing an effective review of documentation,” Velasquez says. At the same time, “insurance companies have many coders looking at what is submitted by doctors. For doctors, it’s difficult to match the codes for work they are doing,” he says. “It’s humanly impossible to keep track of a specialty.”

Velasquez says studies show a whopping 80 percent of all medical bills contain errors, which he blames on lack of industry staffing and wide-ranging standards, suggesting that it is too low of a priority among doctors and hospitals until it is too late.

One of the problems is the complication of the codes themselves, which must be measured to actual procedures. The health system’s ICD-9 and ICD-10 added thousands of new codes, or revised them, which physicians must match to get proper reimbursement, he says.

As Velasquez said in a statement, compliance is one of the most important areas of any hospital system, or even in physician groups, but the most are “under-resourced when it comes to personnel and budget.”

“It’s viewed as a cost center, not a profit center,” he says. “When cuts are made they are often made in compliance.”

As a result, lots of physicians are caught in the maelstrom, putting inaccurate information into coding systems, either by “undercoding” – that can result in underpayment for the conditions they are treating, or “overcoding” – billing too much for the procedure. While the percentages vary, at least 25 percent occurrence rate for each incident, which Velasquez decries as undermining docs and the system.

“Physicians didn’t become physicians to become compliant,” he says. “They became physicians to heal people and make people well. That’s the real problem.”

In the meantime, there have been many cases in which a host of hospitals and physician groups have been shelling out big money to settle cases in which they have either flouted the law, or having problems dealing with billing. Some are involved in fraud, trying to re-invent their coding to get bigger payments, while others are making big mistakes. Government regulators also are having trouble keeping tabs on all this.

Each week, the government enters into corporate integrity agreements (CIAs) or simply integrity agreements with health care providers as part of federal health care program investigations stemming from a variety of false claim statutes.

In such an analytical world, physicians and hospitals can use data to substantially help themselves with coding issues, and that’s the business Velasquez is in.

Essentially, technology to locate coding issues can prevent incorrect billing, saving hospital networks millions of dollars, he says. “Healthcare providers who use analytics to improve internal processes and identify red flags dramatically improve their compliance risk and bottom line,” Velasquez said in a statement.

He points to one particular case where technology assistance potentially could have played a key role in overcoming significant billing and coding problems.

Earlier this year, the Carolinas Healthcare system settled a Justice Department lawsuit alleging that it “upcoded” lab results to get bigger payments from federal healthcare programs, Healthcare Finance News reported.

The government said the hospital system conducted urine tests coded as “high complexity” for federal reimbursement, which resulted in more than $80 per test than if coded properly as a “moderate complexity.” The event occurred from 2011 to 2015. It resulted in Carolinas Healthcare System paying out $6.6 million.

With great technology, the issue could have been prevented, or as Velasquez says, “proactive technology.” It’s about the interpretation and application of complex and constantly changing billing guidelines, Velasquez says.

Since 1993, Fi-Med has been working alongside healthcare providers to “maximize revenue and reduce risk,” from catching billing errors to providing high-level safeguards. The company  touts a subscription service that analyzes hospital or network billing data that quickly shows if providers are at risk. Its technology tracks “coding behavior, audit risk evaluation, management revenues and over/under charges,” according to the company website.

Its REVEAL/md can identify “in minutes” unusual coding behavior and patterns that fall outside of what would be considered normal numbers based on comparisons to what was submitted to the Centers for Medicare and Medicaid Services (CMS).  Once identified in REVEAL, the hospital or auditor would have to investigate further to determine if an error occurred leading to the overpayments, the company says.

“REVEAL/md cannot determine if fraud has occurred, but this step is essentially the first step that a government auditor/investigator would take to determine if they need to dig deeper,” says Velasquez.

When he created the program, “there wasn’t a lot of interest,” Velasquez says, but he knew it would become a significant issue as there were growing headlines about federal recovery and audit charges.

“Now it’s getting a lot of traction, and a lot of interest,” he says.

The reason? More hospitals are finding they are lost in the maze, even before they start their billing journey.  — Joe Cantlupe

Five months after the Annals of Emergency Medicine withdrew a controversial academic paper touting the pricing merits of urgent care centers compared to competing free-standing emergency departments in Texas, the AEM today  reposted the study online – its findings almost exactly the way it was the first time, which caused a firestorm in the ED world.

The authors of the study, under pressure to review their initial paper, had fixed some minor technical errors even before the paper was pulled, they said. But their conclusions were virtually similar: free-standing EDs and hospital-based EDs in Texas are overpriced, compared to urgent care centers. It showed a potentially ineffective use of emergency facilities, they said, which is becoming an increasing financial burden in healthcare.

“The main results of the paper are the same,” says lead author, Vivian Ho, the Baker Institute Chair in Health Economics, the Department of Economics, at Rice University. Before the paper was initially withdrawn following publication in May. “We had some median prices in the (paper’s) appendix that were incorrect because I transposed them incorrectly,” Ho says.

In a highly unusual move – citing the controversy involved – the editor in chief, Michael Callaham, MD, wrote that the journal was “pulling back the curtain” and not only published the final article but several editorials and “the background arguments and discussions that took place between the author and their critics.”

When the paper was first published it caused an uproar among emergency department physicians, and AEM said they sought further review, focusing on what they termed serious concerns over data in the study, which was gaining widespread media attention, and showed that patients who were treated at emergency departments instead of urgent care centers paid as much as 10 times higher for similar diagnosis. The Annals of Emergency Medicine is the official journal of the American College of Emergency Physicians.

Since HealthDataBuzzs revealed the AEM decision last spring to remove the paper from the website with the intent of either trying to salvage or scrap the paper,  the organization tapped into many academics and others to review its findings. In the meantime, there was much consternation: the AEM editor Callaham saying he had never been involved in such a situation, and Ho saying she was never so mistreated in the handling of a study.

While some criticized the study, other academics were aghast that the paper would be summarily pulled, based on criticisms from those with self interests. Top emergency department officials criticized the Ho paper as bearing “no relation to what was occurring in the field,” and there were flaws in median prices that investigators used in the study. In response, Ho said the allegations were “baseless and misleading.” As many critics focused on “transcription errors in the tables” of a study appendix, she noted they had no bearing on the article findings. “Honest errors are a part of science and publishing and require publication of a correction when they are detected,” she said.

The Annals of Emergency Medicine today published continued rebuttals to the paper, and Callaham discussed the maze of issues involved in an unusual editorial process  that not only suggested there was information in the paper signifying that it should be published, but there was room for other comments as well.  He declared that some in the media were “sensationalizing certain aspects of the findings, including conclusions that were not the focus of data analysis and were not casually proven.”

With all the back-and-forth, “we chose instead to escalate the level of review and share the results with our readers,” Callaham wrote. The “unusually extensive review” including the work of four peer reviewers, one regular editor and four expert editorial specialists, he says.  Callaham is founding chair and professor emeritus at UCSF Medical Center at Parnassus.

“After digesting all the assessments and arguments, we concluded the article had some original and important data to report (on a topic with a paucity of such information) and believed it should be published,” Callaham wrote. “But because the concerns were also important and could not be conclusively resolved, they should be published too.”

“Additionally,” Callaham wrote, “some of the conclusions in this article are not based on the actual analysis and results, which have been quite misunderstood by the lay press.” That’s why, he said, the journal was not following its usual practice of only presenting the final article and maybe one editorial.

He noted there was an “unusually broad range of potential conflict of interest declarations for the various parties” in the dispute, Callaham says.

Blue Cross Blue Shield of Texas researchers played a key role in the paper, and told Callaham’s team that they “firmly support the work done by non-biased researchers led by (Dr. Ho) and “stand by the accuracy of the data.”

Callaham added: “We sent several letters by FedEx to national officers of Blue Cross Blue Shield inquiring whether they would be willing to have the data reviewed for validity and completeness by an impartial third party, but they did not respond in any way.”

“This raises serious questions about conclusions based on such “black box” data, ” Callaham, referring to a possible conflict of interest and the lack of clinical data. Callaham said there was an “unusually broad range of potential conflict of interest declarations for the various parties to this dispute.”

After the paper was first published, Paul D. Kivela, MD, MBA, FACEP, President-Elect of the American College of Emergency Physicians, charged in a letter to the AEM that the Ho report included data that was “somewhat problematic and incomplete.”

William P. Jacquis, MD, FACEP, Vice-President of the American College of Emergency Board Liaison to the Annals of Emergency Medicine, added: “Comparing the prices between urgent care centers and freestanding EDs is an ‘apples to oranges’ comparison of contracted rates versus charges, which makes the findings flawed.”

Ho and her colleagues said the complaints were much-a-do about nothing; an academic political controversy, with many concerned about their self-interests.

“We welcome the input of other researchers, but Annals’ decision to withdraw our article is suppressing the possibility for an objective, well-informed, public debate about the validity of our findings,” Ho wrote.

In the end, with the journal publishing the story today, the AEM is essentially giving its support, if not to the paper, the overall discussion. At one point, there was so much back-and-forth among academics; Ho said she thought, “this needs to stop.”

The paper come at a crucial time as urgent care centers are trying to create a niche market, and free-standing emergency departments, which are not attached to hospitals are among the fastest growing trends in healthcare, according to the New England Journal of Medicine Catalyst. Urgent care centers are marketing themselves expanded and weekend hours, which are often not available in routine physicians.

Despite the controversy and unsettled fate of the study, Ho says it focuses the importance of “wasteful spending” in healthcare and the “rising costs of premiums.”

“I think the firestorm around the paper is really great and brought the attention of high prices at freestanding emergency departments,” Ho says.  —  Joe Cantlupe