Medical Billing Horror Stories

By Sharon Hollander

Anecdotes and real case studies ripped from the headlines about what doctors did which got them into trouble either with Medicare, HIPAA, The Office of Inspector General (OIG) or worse the FBI.
The case studies are true stories of medical professionals: Some are about providers just like you trying to navigate the complex maze of the medical billing process.
This guide will help you recognize the red flags and triggers so you can avoid a Medicare Audit.
Learn about common problems that plague medical practices.
Discover what your peers have done right and what they have done wrong.
Avoid the costly billing mistakes and practice mismanagement showcased in Medical Billing Horror Stories.
With the changes, challenges and uncertainties facing the Healthcare industry you cant afford to miss this information.
If you submit even one claim for reimbursement this is a must read!

• Language: English
• Publisher: Abbott Press
• Release date: May 30, 2013
• ISBN: 9781458209450

Sharon Hollander

Sharon Hollander is an author, entrepreneur, and healthcare consultant in the area of practice management. She is also the president of STAT Medical Consulting. She graduated with a bachelor’s degree in psychology and physiology from York University in Toronto, Canada. She lives in the West San Fernando Valley in Southern California with her Labradoodle, Jason, who manages his own company at www.petjason.com. Visit Hollander online at www.sharonhollander.com.

Book preview

Copyright © 2013 Sharon Hollander.

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews.

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Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.

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ISBN: 978-1-4582-0945-0 (e)

ISBN: 978-1-4582-0947-4 (sc)

ISBN: 978-1-4582-0948-1 (casebound)

ISBN: 978-1-4582-0946-7 (dust jacket)

Library of Congress Control Number: 2013908917

Abbott Press rev. date: 5/16/2013

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Table of Contents

Acknowledgements

Introduction

Section I Understanding The Medical Billing Process

Chapter 1

History Of Medical Billing

Chapter 2

The Payors

Chapter 3

The Billing Cycle

Chapter 4

Explanation Of Benefits (Eob)

Chapter 5

The Clearinghouse

Chapter 6

Deductibles

Chapter 7

Cpt Coding

Chapter 8

ICD-9 Codes

Chapter 9

Modifiers

Chapter 10

Electronic Health Records

Section II: Issues That Plague Medical Practices

Chapter 11

7 Ways To Improve Office Operations

Chapter 12

Embezzlement Case Studies

Chapter 13

Credentialing

Chapter 14

Bad Faith Insurance Tactics

Chapter 15

Patient Billing Case Studies

Section III: Audits

Chapter 16

Medicare Audits And Triggers

Chapter 17

Opting Out Of Medicare

Section IV: HIPAA

Chapter 18

Safeguards

Chapter 19

Case Studies: Hippa Violations And Penalties

Section V: Office Of The Inspector General (OIG)

Chapter 20

Anti-Kickback And Stark Law Violations

Chapter 21

Referrals And Relationships

Chapter 22

OIG Case Studies: Aks And Stark Violations

Chapter 23

The 2013 OIG Work Plan

Chapter 24

The False Claims Act (Whistleblower Act)

Section VI: Fraud

Chapter 25

Understanding Fraud

Chapter 26

Medicare and Medicaid Fraud

Chapter 27

Fraud Cases By Specialty

Conclusion

Bibliography

To: Joel, Rosemary, Larry, Amy, Ilene, Zeddy and Bailey who’s only concern was that it better not be about them.

This book was published for informational purposes only and intended solely to be viewed as a tool to assist providers. It is not intended to grant rights or impose obligations. Although every reasonable effort has been made to ensure the accuracy of the information within these pages, the ultimate responsibility for the correct submission of claims and response to any remittance advice lies with the provider of services.

I make no representation, warranty, or guarantee that this compilation of billing, coding, or Medicare information is error-free, and I will bear no responsibility or liability for the results or consequences of the use of this guide.

This guide is a general summary that explains certain aspects of the Medicare Program, but it is not a legal document. The official Medicare Program provisions are contained in the relevant laws, regulations, and rulings.

Acknowledgements

Clients, Friends, Staff, Mentors and the naysayers – I couldn’t be where I am today without you all, professionally or personally. You know who you are!

To Melayne Yocum and Dennis Benton who believed in a little idea and said yes to the launch of STAT almost 20 years ago.

Dr. Robert Kotler, Cosmetic Surgeon extraordinaire, (No I haven’t had work done…yet) for your support and encouragement.

Dennis Solari who schlepped me around the country cultivating my con- sulting portfolio. Darlene Phillips who encouraged me to go to places that even planes didn’t reach. Penny Angel-Levy who encouraged the writer within.

My friends at the FBI who taught me that medical billing is not a joke.

Robin Harnist, my trusted friend and editor who needs a new watch because for her a week means maybe two or three. I know, I know you cannot rush the creative process. She has taught me patience and elevated my writing to the next level. And if you are going to write about giving water to the dog, you better make sure you didn’t edit out the dog and leave the water.

Rosie Grupp, without whom my book would resemble a home economics craft project and not a very good one at that. For a cover that made us all take notice!

And lastly, to Karen McCullah Lutz and Kirsten Smith the writers of Legally Blonde the Movie that forever allowed me the opportunity to respond to anyone saying, You wrote a book? with shaking my head from side to side and replying, Like it’s hard?

Introduction

Health care fraud is on the rise. As with any field, criminals try to cheat the system, and the government is cracking down to prevent it. Fraud costs taxpayers millions of dollars. My goal is to help doctors identify what their peers have done right and wrong. I have provided case studies on what doctors are doing in their billing practices, and also, I have included some red flags and audit triggers so doctors can avoid billing incorrectly.

This book was not initially intended as a medical legal thriller, but what you are about to read are true accounts of medical billing horror stories that have been ripped from the headlines. If you want to hear what happened to the nurse who posted a narrative and a patient’s confidential x-ray on Facebook or a group of doctors who marketed patients in a rent-a-patient scam and performed unnecessary operations, then this book is for you.

The cases presented within these pages are true stories of medical profes- sionals: Some are about providers just like you. Many doctors are just trying to navigate the maze of the medical billing process. Without a clear understanding of coding requirements, some thought that if they only bill just 99213’s, they could stay under the radar. What they didn’t expect is that by doing this and not varying their coding appropriately, they were raising red flags about their billing practices which led to them being audited by Medicare.

Within these pages are case studies of providers that agreed to split a fee with another provider, or entering into a business agreement with another doctor or a hospital. They thought, Well, everyone is doing it. What they, too, didn’t expect is that the Office of Inspector General (OIG) eventually investigated them.

Also, there are case studies about providers who have committed fraud, and thought, Well I won’t get caught. However, they were investigated and the FBI convicted many of fraud.

The case studies have all been grouped by specialty to simplify and illustrate what your peers have done. Some of these cases, as a result of audit findings, resulted in doctors having significant financial impact such as having to repay Medicare or other 3rd party payors. Some doctors also had significant fines in addition to refunding money back to Medicare and some cases where doctors were faced with criminal and civil penalties including incarceration.

Doctors have a legal obligation to not only treat their patients appropriately and with medical necessity but also to comply with the health laws and the authorities who oversee the laws, including but not limited to: HIPPA, Department of Health and Human Services, Office of Civil Rights, Centers for Medicare and Medicaid Services, and the Department of Justice.

Submitting claims to a third party for reimbursement exposes doctors to a litany of scrutiny. Doctors and other healthcare providers need to read these cases in order to learn the ins and outs of medical billing. Specifically, they must understand how to avoid an audit, prosecution, and the civil and potential criminal penalties for violating the law.

Due to the complexities of medical billing, the insurance marketplace and constant changes to both reimbursement and insurance coverage, providers often do not know how much they are going to be paid for care.

Doctors must understand what to do in order to receive timely and accurate payment for their care, while avoiding submitting claims that may result in audits or fraud alerts. If doctors learn to navigate the billing maze, they will be able to focus on providing quality medical care for their patients.

Compiled in this book are some of the 130,000 separate Medicare regulations and policies, and I have explained them in simple terms to assist in navigating the healthcare maze.

This book was current at the time it was written; however, Medicare policy changes frequently. Links to the source documents, with references, can be found in the back of the book.

In my years as a healthcare consultant, my zeal to communicate these Do’s and Don’ts of practice management to doctor’s has made for some very heated discussions. My knowledge about billing rules and regulations and Medicare Guidelines has not always made me popular with providers. To be clear, I didn’t create the laws or rules so please don’t shoot the messenger.

As a healthcare consultant, an expert in reimbursement, and the current president of a successful medical billing service, I thought I had seen it all.

SECTION I:

UNDERSTANDING

THE MEDICAL

BILLING PROCESS

CHAPTER 1

History of Medical Billing

Medical billing has been around for almost 500 years. The first outbreak of bubonic plague in the 1660s is believed to be the first form of medical coding when officials started using statistics for tracking the disease.

In 1983 a French physician named Jacques Bertillon created a system of distinguishing diseases and classification of cause of death by anatomical body parts.

In 1898, the American Public Health Association (APHA) recommended that the registrars of Canada, Mexico, and the United States also adopt it. The APHA also recommended revising the system every ten years to ensure the system remained current with medical practice advances. As a result, the first international conference to revise the International Classification of Causes of Death convened in 1900 with the following revisions occurring nearly every decade thereafter:

• 1908 – The United States government established the first work compensation program for employees

• 1910 – The first insurance policies were offered

• 1923 – AMA Code of ethics allowed physicians to be Free to choose whom he will serve

• 1940 – The first pre-paid healthcare plan introduced by President Nixon

• 1950s – Lyndon Johnson signed Medicare and Medicaid into law

Health insurance in the U.S. has been made available to help offset the expenses of the treatment of illness and injury. The first sickness clause was inserted in an insurance document in 1847. However, health insurance did not become established until 1929 when Blue Cross first started covering schoolteachers in Texas. In 1932, a citywide plan was initiated in Sacramento, California. As an industry, health insurance became widespread after World War II.

In 1948, the World Health Organization took over the classification system and then created International Classification of Diseases that is still used today. The first coding was the ICD-1, and we are now currently using ICD-9 coding.

In 1957, the AMA Code of Ethics revised the practice to include that physi- cian fees should be commensurate with services rendered and the patient’s abil- ity to pay. American Medical Association created the first Common Procedural Terminology (CPT) codes in 1966.

Richard Nixon was the first politician to try to change healthcare from a not for profit business into a for-profit business. In 1973, Congress passed the Health Maintenance Organization Act, which started the rapid growth of Health Maintenance Organizations (HMOs), which was the first form of managed care.

Medical billing claims became automated in the 1980s through the submis- sion of claims via computer and software. Prior to that, all medical billing claims were submitted on paper. Also, the only type of reimbursement for doctors and hospitals were fee for service. The Diagnosis Related Group (DRG) was intro- duced as the mechanism how hospitals were paid, and this opened up new coding trends and efforts on cost containment.

Health Care Portability Act was made into law in 1997, which forever changed the landscape of medical billing.

The Affordable Care Act, commonly referred to as Obamacare, is scheduled for implementation in 2014.

Pharmaceutical Company Case Study

The largest Medical Fraud case in the United States to date one pharmaceutical company was fined $3 billion for putting profits ahead of patients.

The case involved sales representatives at a national conference when the pharmaceutical company was promoting their drugs. They indicated that it made patients happy, skinny and sexually turned on as part of the slogan repeated to doctors. In addition the drug manufacturer was issuing kickbacks and financial incentives being paid to doctors. Sales representatives were encouraging doctors to promote drugs for unapproved uses, including prescribing it to children.

The Justice Department went after another pharmaceutical company that had to pay back $700 million dollars in criminal fines.

Both cases are financial extremes. However many solo practitioners and physicians in private practice are experiencing the same pressure from the Federal Government, and third party insurance companies responsible for overseeing the physicians.

In order to comprehend the issues facing providers, it is necessary to explain the medical billing process and explain about the agencies and regulators who monitor these processes.

The medical billing process is the interaction between the provider (doctor) and the insurance company, regardless if the insurance company is owned by a private firm or the government. To understand the process, it is necessary to identify the key players: the regulators, the payors, the providers, the billers, and the patients.

Healthcare is ranked 3rd among the most heavily regulated industries in the United States, and it follows behind nuclear testing facilities and aviation as the first two most heavily regulated industries. In the course of a physician’s career, he or she will have interactions with one or all of the regulatory organizations, with their maze of laws, rules, and guidelines.

The government regulators are controlled under the auspices of either the State or the Federal Government. Each State is responsible for the following:

• Licensure of physicians

• Testing and approval of

Reviews for Medical Billing Horror Stories

[carolee888 · Rating: 5 out of 5 stars]

Medical Billing Horror Stories by Sharon Hollander turned out to be written for physicians instead of patients. I thought it would be full of stories like my own, being billed for the birth of my son and then five days later billed for second baby!It was still very interesting reading. I had worked for my father who was a physician long ago before the start of Medicare. Some problems did concern the patient. Apparently there have been some companies already masquerading as affordable insurance for 2014. They put a picture of the White House or the American flag by the company's name.There was information of little known facts about Medicare such as if you refuse Medicare Part A, you will not be able to collect Social Security benefits.Many of the problems that involve physicians is either fraudulently trying to trick Medicare to pay more for their services or even making them up or accidently making mistakes on the codes. Picking the codes is extremely important to getting paid from Medicare. It was shocking for me to read of the physicians who actually tried to trick the government. Did they not think there would be lots of oversight?I strongly recommend this book to all physicians. This book is very simply and is easy to understand.I received this book from FirstReads as a win but my thoughts and feelings in this review are my own.