November 2012 Volume 9 Number 3

Do Electronic Health Records Promote Billing Fraud?

By Lauraine Palm Singh, Singh Advisors, LLC, Twin Cities, MN

AuthorA centerpiece in the national healthcare reform agenda is the goal that electronic health records (“EHRs”) will lower costs and improve quality.1 Recently however, there have been reports from the Center for Public Integrity (“CPI”) and the New York Times that doctors and hospitals are using EHRs to document and bill for services which weren’t performed.2 The clamor has escalated, with many claiming that EHRs make it easier for providers to “game the system” and fraudulently bill the government for services that were never performed. In the face of this uproar, the government has issued stern warnings and launched an investigation to determine if EHRs trigger higher billing codes and promote fraud.3

Congress has even jumped into the fray. On October 4, 2012 four members of the U.S. House of Representatives sent a letter to Secretary Sebelius requesting that she immediately suspend the distribution of incentive payments related to the EHR program until the billing fraud issues can be sorted out.4

The medical community has interjected some strong rhetoric along with well-reasoned arguments in its own defense. This article examines some of the many voices in this tumultuous debate. Who said what? What does it mean? Is there really fraud? Are providers “gaming the system?”

I. The two reports that sparked the debate: “Cracking the Codes” and the New York Times piece

In September, 2012, CPI published the results of a very thorough 21-month study claiming that medical professionals have billed at higher rates and collected billions of dollars in questionable fees after switching to EHRs.5 One of the key findings was that “doctors and hospitals moved to better-paying codes in recent years, and that it’s likely that the trend in part reflects ‘upcoding,’ — the practice of charging for more extensive and costly services than delivered.”6 The CPI found upcoding across fourteen Evaluation and Management (“E/M”) codes for office visits by established patients and hospital emergency room (“ER”) visits.

EHR and electronic coding software allow professionals to add “boilerplate” documentation to a medical record with the click of a button. This repetitive language has prompted many, including the CPI, to question whether this “boilerplate” language is promoting fraudulent “upcoding”, allowing professionals to bill for services they did not perform.

Just one week later, the New York Times (“NYT”) published “Medicare Bills Rise as Records Turn Electronic” and asserted that the move to EHRs “may be contributing to billions of dollars in higher costs....”7 The NYT piece cited a study by the Office of the Inspector General (“OIG”) published in May, 2012.8

II. What was the government’s response?

Shortly after the CPI and NYT reports came out, Kathleen Sebelius, Secretary of the Department of Health and Human Services (“HHS”) and Attorney General Eric Holder warned hospitals not to use EHRs to illegally boost their Medicare payments. In a letter to hospital trade associations, including the American Hospital Association (“AHA”) and the Federation of American Hospitals, Holder and Sebelius underscored the administration's support for EHRs, which can help reduce errors and improve efficiency.

"However, there are troubling indications that some providers are using this technology to game the system, possibly to obtain payments to which they are not entitled," they wrote. "False documentation of care is not just bad patient care; it’s illegal."9

The National Coordinator for Health Information Technology, Farzad Mostashari, also announced he was launching an investigation to determine if EHRs trigger higher billing codes by allowing doctors to cut and paste records from prior encounters with a patient, a practice known as “cloning.”10

III. What does the medical community have to say?

The AHA, which represents more than 5,000 hospitals, responded, saying “It’s critically important to recognize that more accurate documentation and coding does not necessarily equate with fraud. We agree that the alleged practices described in your letter, such as so-called ‘cloning’ of medical records and ‘upcoding’ of the intensity of care, should not be tolerated.”11

The AHA also criticized federal officials for not providing more guidance on the E/M codes which were at the heart of the CPI report:

Recognizing that the E/M codes did not adequately describe the services provided in hospitals, CMS instructed hospitals to develop internal hospital guidelines to determine the level of services provided. In 2003, the AHA and the American Health Information Management Association (AHIMA) recommended that CMS implement national hospital E/M visit guidelines based on the work of an independent expert panel comprised of representatives with coding, health information management, documentation, billing, nursing, finance, auditing and medical experience. .. “ The AHA has long called for national guidelines for hospital ED and clinic visits, and we stand ready to work with CMS in the development and vetting of such guidelines. Once national guidelines are developed, we recommend that a formal proposal be presented to the AMA’s CPT® Editorial Panel to create unique CPT® codes for hospital reporting of ED and clinic visits based on the national guidelines.12

Numerous other members of the medical community have added their voices to the conversation, including Dr. Michael H. Zaroukian and Dr. Peter Basch. Dr. Zaroukian, MD, PhD, FACP, FHIMSS is Vice President and Chief Medical Information Officer (“CMIO”) at Sparrow Health System and Professor of Medicine at Michigan State University (MSU). Dr. Zaroukian is renowned in the field of health IT and EHR. He received the 2010 HIMSS Physician IT Leadership Award and in 2012, received a "Top 25 Clinical Informaticists" award from Modern Healthcare.13

Dr. Peter Basch, MD, FACP, is a Senior Fellow for Health IT Policy with the Center for American Progress, and a Visiting Scholar with the Engelberg Center for Healthcare Reform of the Brookings Institution. He represents the American College of Physicians at the Physicians’ EHR Coalition, which he co-founded in 2004. He is also the recipient of the HIMSS Physician IT Leadership Award for 2007. He is currently a member of the Quality Measures Workgroup of the HIT Policy Committee.14

While Dr. Basch and Dr. Zaroukian agree that fraudulent billing of any kind should be vigorously prosecuted, they take issue with the conclusion that repetitive language in medical notes is evidence of fraud:

[W]e challenge the inference in the Center for Public Integrity report and NYT story that the finding of repetitive language (“boilerplate” documentation) in medical notes or similar appearing notes is prima facie evidence of documentation fraud and illegal billing behavior. …[S]tandard terminology has been encouraged in medical school and residency training since long before EHRs were used and it is fortunate for patients that physicians are trained to use standard terms to describe and clearly communicate positive and negative findings to each other. We acknowledge that physicians can document in notes work that they did not do but that is neither unique to EHRs nor will be cured by further limiting the ability to use efficient documentation tools wisely and well.15 (emphasis added).

Dr. Basch and Dr. Zaroukian also take issue, as the AHA did, with the documentation requirements contained in the E/M guidelines:

EHRs did NOT cause the documentation clutter and verbosity that is now commonly called “note bloat” but rather that the E/M documentation guidelines are the principal contributor to this problem. EHRs make it easier to document profusely and are therefore implicated in the “note bloat” problem, EHRs are simply using their capability to assist with the documentation required for billing. [The] documentation requirements and coding complexity contained in the 1995 and 1997 E/M Guidelines catalyzed the very conditions that the Center for Public Integrity and the New York Times reports have recently raised concerns about.16 (emphasis added).

They have also questioned what exactly was uncovered by the OIG report and rejected the premise that EHRs or their coding decision support systems promote fraud and abuse.

…[W]e look[ed] at the recent Center for Public Integrity and Office of the Inspector General reports referenced in the NYT piece in which it was found that physicians and hospitals using EHRs show higher charges than their colleagues using paper records. Notwithstanding the legitimate concerns, anecdotal examples and significant questions regarding the prevalence and contributing factors to physician billing fraud – including features and functionalities in EHR systems – we did not find evidence from any of these reports that answer the specific question of whether use of EHR systems or their coding decision support software contributed to the billing patterns of the 1,669 (0.38%) of 442,000 physicians who had Medicare billing profiles that differed significantly from their colleagues. The OIG study also did not look at whether this small fraction of physicians billing at the highest levels were doing so inappropriately or fraudulently. We conclude that while all causes of billing fraud and abuse in any type of documentation system (paper or EHR) should be explored and reasonable steps taken to prevent and remedy them, we do not accept the premise that EHRs or their coding decision support systems promote fraud and abuse.17 (emphasis added).

Conclusion

There has been broad consensus that widespread adoption of EHRs is a necessary step toward better, safer, and more affordable healthcare in the United States. The CPI and NYT reports questioned that conventional wisdom, and the medical community has responded strongly in its own defense.

So, do EHRs really promote billing fraud and abuse? Are providers using EHR technology to “game the system” and obtain payment for services which were never provided? There may be some evidence to support this, but there are also legitimate concerns that the E/M coding guidelines are confusing and complex. Many have long called for national guidelines to determine the level of clinic or ER services provided. Currently, the coding is still done according to internal hospital rules, as recommended by CMS.

The AHA and CMS seem to be in the best position to resolve this confusion through joint development and vetting of national guidelines for coding of hospital ER and clinic visits. As the AHA recommended, the American Medical Association’s (“AMA”) CPT® Editorial Panel could then create unique CPT® codes for hospital reporting of ED and clinic visits based on the new guidelines.


1Federal sources say that EHR implementation will save the federal government more than $12 billion over the next 10 years. The RAND Corporation, a global policy think tank, estimates savings of about $80 billion a year for the health-care sector when they move towards paperless medical records. http://www.rand.org/pubs/external_publications/EP20050904.html
2Fred Schulte and David Donald, “Cracking the Codes.” Center for Public Integrity, 15 September 2012. Available at http://www.publicintegrity.org/health/medicare/cracking-codes ; Reed Abelson, Julie Creswell and Griff Palmer, “Medicare Bills Rise as Records Turn Electronic.” New York Times, 21 September 2012, available at http://www.nytimes.com/2012/09/22/business/medicare-billing-rises-at-hospitals-with-electronic-records.html?pagewanted=all ; Office of Inspector General, U.S. Department of Health & Human Services. (2012). Coding Trends of Medicare Evaluation and Management Services( OEI-04-10-00180), available at https://oig.hhs.gov/oei/reports/oei-04-10-00180.pdf
3

Letter from Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services and Eric N. Holder, Jr., Attorney General, September 24, 2012 http://www.kslaw.com/library/publication/HH100112_Letter.pdf. Mostashari, Dr. Farzad, National Coordinator for Health Information Technology. Interview with Center for Public Integrity, 16 October 2012. Available at http://www.publicintegrity.org/2012/10/16/11499/impact-administration-official-asks-medicare-billing-review.

4

Ways and Means Committee Chairman Dave Camp (R-MI), Energy and Commerce Committee Chairman Fred Upton (R-MI), Ways and Means Health Subcommittee Chairman Wally Herger (R-CA), and Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA). claim that suspension is necessary because the EHR Stage 2 Meaningful Use program rules are too weak and “will result in less efficient system that squanders taxpayer dollars and does little, if anything, to improve outcomes for Medicare”. http://waysandmeans.house.gov/uploadedfiles/hhs_ehr_mu2_final.pdf.

5

Fred Schulte and David Donald, “Cracking the Codes.” Center for Public Integrity, 15 September 2012. Available at http://www.publicintegrity.org/health/medicare/cracking-codes.

6

Id.

7

Reed Abelson, Julie Creswell and Griff Palmer, “Medicare Bills Rise as Records Turn Electronic.” New York Times, 21 September 2012. http://www.nytimes.com/2012/09/22/business/medicare-billing-rises-at-hospitals-with-electronic-records.html?pagewanted=all.

8

Office of Inspector General, U.S. Department of Health & Human Services. (2012). Coding Trends of Medicare Evaluation and Management Services( OEI-04-10-00180), https://oig.hhs.gov/oei/reports/oei-04-10-00180.pdf

9Letter from Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services and Eric N. Holder, Jr., Attorney General, September 24, 2012 http://www.kslaw.com/library/publication/HH100112_Letter.pdf .
10

Mostashari, Dr. Farzad, National Coordinator for Health Information Technology. Interview with Center for Public Integrity, 16 October 2012. Available at http://www.publicintegrity.org/2012/10/16/11499/impact-administration-official-asks-medicare-billing-review .

11http://www.aha.org/advocacy-issues/letter/2012/120924-let-hhsdojehrbilling.pdf
12

Id.

13

In addition, Dr. Zaroukian is responsible for leading the advancement of Sparrow's EHR system capabilities and health IT enabled care transformation initiatives. He is also Professor of Medicine at Michigan State University, where he previously served as its CMIO, directing MSU’s enterprise-wide EHR implementation project. He is past-president of a large, national EHR user group. Dr. Zaroukian has conducted numerous regional, national and international presentations and workshops on the use of EHR and other health IT systems to improve access to and use of health information in patient care, health professions education, research and administration. He served as a member of the informatics group at the 2002 Institute of Medicine Health Professions Education Summit. Dr. Zaroukian is Chair of the American College of Physicians Medical Informatics Committee, is Vice-Chair of the HIMSS Ambulatory Information Systems Committee, and is a member of the AMA Health IT Advisory Group. http://www.linkedin.com/pub/michael-zaroukian-md-phd-facp-fhimss/1/39/471

14In addition, Dr. Basch served as the chairman of the recently concluded Maryland Task Force on EHRs, and served as an advisor on health IT to the Obama transition team. Dr. Basch practices general internal medicine in Washington, DC, and is an early adopter of EHRs and e-prescribing. He also serves as the Medical Director for Ambulatory EHR and Health IT Policy at MedStar Health, providing the clinical and strategic leadership for its ambulatory EHR implementation. http://www.markle.org/health/experts-impact/1278-peter-basch-md-facp
15

Basch, P., & Zaroukian, M. (2012, September 30). Doctors Helping Doctors Transform Healthcare. Retrieved November 6, 2012, “Does EHR Use Lead to Lower or Higher Costs?” Part 4. http://doctorshelpingdoctorstransformhealthcare.org/2012 .

16

Basch, P., & Zaroukian, M. (2012, September 30). Doctors Helping Doctors Transform Healthcare. Retrieved November 6, 2012, “Does EHR Use Lead to Lower or Higher Costs?” Part 6. http://doctorshelpingdoctorstransformhealthcare.org/2012.

17

Basch, P., & Zaroukian, M. (2012, September 30). Doctors Helping Doctors Transform Healthcare. Retrieved November 6, 2012, “Does EHR Use Lead to Lower or Higher Costs?” Part 2 http://doctorshelpingdoctorstransformhealthcare.org/2012 .


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