Many providers contend the shift is the result of sicker patients coupled with the widespread implementation of electronic medical records, as treatment and documentation of more complex cases requires greater time and effort. But the persistent increase in costlier codes has made pursuing potential billing abuse a Justice Department priority.

One area of focus for federal investigators has been upcoding, the practice of deliberately billing for more extensive and costly services than were actually performed.

In February 2017, nationwide hospital staffing provider TeamHealth Holdings agreed to plus interest to settle allegations that its hospitalist group practice, IPC Healthcare, submitted upcoded bills to Medicare, Medicaid, the Defense Health Agency, and the Federal Employee Health Benefits Program.

In June 2017, Carolinas Healthcare System agreed to to resolve allegations that it billed federal health care programs for “high complexity� urine drug tests when the tests conducted were only of “moderate complexity.� According to court documents, this upcoding persisted for four years and cost the government an extra $80 per test.

In October 2017, multi-location New York Spine & Wellness Center agreed to to resolve improper billing claims after a federal inquiry determined the practice routinely billed for moderate sedation services – which require physicians spend at least 16 minutes with patients – despite its doctors not meeting the minimum time criteria.

But upcoding is not exclusive to tax-payer funded health care. In the case of New York Spine & Wellness Center, for example, a private insurer first detected the Center’s sedation upcoding in January 2015, initially rejecting two claims that fell short of the 16-minute rule. A subsequent audit by the same insurer resulted in more rejections, but the Center continued its upcoding abuse for two more years until the U.S. Attorney’s Office intervened, seeking to recover overpayments by the state’s Medicaid program. Indeed, of the $1.9 million settlement, more than $660,000 will be returned to the New York Medicaid coffers.

Outcomes such as these are terrific news for taxpayers, but such retrospective vigilance by the Feds has little to no impact on private insurers, employee organizations, and individual payers.

While the government concentrates on recouping federal dollars post-payment, medical cost containment firms must protect private payer clients from overpaying upfront. For example, 911³Ô¹Ï uses tools such as in-depth bill review by certified coders and nurse auditors and pre-negotiated, bundled rates to wean out upcoding and other billing abuses on a transactional level. Such proactive approaches are a key core competency of medical cost management, and continue to be as important today as they have been historically.

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It is disheartening to see the purposeful overutilization and advantage taken of the elderly, poor, and mentally disabled in the story. I was especially saddened to read that patients were purposely addicted to drugs so they could continue the billing cycle scam.

“Defendant [Esformes] and his co-conspirators preyed upon his beneficiaries addictions by providing them with narcotics so that the beneficiaries would remain in Esformes Network facilities, allowing the cycle of fraud [to] continue,” prosecutors said in a court filing.

This is a hard reminder that there are unfortunately a number of “bad players” in healthcare and our industry needs to stay vigilant to prevent the fraud and abuse that can arise out of the system.

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