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IMPACT: HHS IG pledges focus on Medicare billing abuse involving electronic records

Inclusion in IG work plan for 2013 follows Center's 'Cracking the Codes' series

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Federal officials will focus on possible Medicare overbilling by doctors and hospitals that use electronic medical records, a top government fraud investigator said  Wednesday, in announcing investigative priorities for the coming year.

“Electronic medical records can improve quality of care and efficiency and help us uncover cases of fraud and abuse. At the same time, we must guard against the use of electronic records to cover up crime,” said Daniel Levinson, the Department of Health and Human Services inspector general, in a video presentation.

The video posted on the agency’s website on Wednesday summarized the inspector general’s “work plan,” for 2013, a listing of Medicare and Medicaid fraud fighting efforts the agency plans to emphasize.  

The plan states that the agency “will identify fraud and abuse vulnerabilities in electronic health records (EHR) systems as articulated in literature and by experts to determine how certified EHR systems address these vulnerabilities.” The agency did not provide further details of its review. 

The economics of switching to electronic health records is receiving new scrutiny in the wake of the Center for Public Integrity’s “Cracking the Codes” series, which found that thousands of medical professionals have steadily billed higher rates for treating seniors on Medicare over the last decade — adding $11 billion or more to their fees. The investigation suggested that Medicare billing errors and abuses are worsening as doctors and hospitals switch to electronic health records. A similar report was subsequently published by the New York Times.

Earlier this month, Dr. Farzad Mostashari, the Obama administration’s National Coordinator for Health Information Technology, said he would ask a panel of policy experts to examine the billing controversy. Mostashari said he wants to find out if the digital systems are triggering higher billing codes by allowing doctors to cut and paste records from prior encounters with a patient, a practice known as “cloning.”

Many experts say that this process can raise the size of a patient’s bill, even though it reflects little in the way of added or necessary medical service.

Dr. Stephen R. Levinson, a Connecticut physician and expert on medical coding and billing issues, called the inspector general’s focus a “warning shot across the bow” for physicians. While Medicare requires an efficient auditing effort, Levinson also criticized the “punitive nature” of the audits, which are “turning physicians off.”

Other critics have noted that the software itself may encourage medical professionals to bill for more complex and costly services than they actually deliver — a practice known as “upcoding.”

Republicans in Congress also are expressing concern about the government’s program to spend more than $30 billion helping doctors and hospital purchase digital record keeping systems—and to use them as a means to improve the quality of medical care.

In an Oct. 17 letter to HHS Secretary Kathleen Sebelius, four Republican senators raised questions about whether electronic health records are hiking the number of medical tests doctors ordered as well as boosting billing and “thereby [increasing] the overall costs of the program” to taxpayers.