Skip to main content

26-09-2012 | Article

Inflated Medicare billing ‘costing US taxpayers $ billions’


Full report

medwireNews: Unscrupulous healthcare providers are exploiting electronic medical records to take Medicare - and US taxpayers - for an $ 11 billion-plus ride, according to a watchdog group.

"Regulators may lack the auditing tools to verify the legitimacy of millions of medical bills spit out by computerized records programs, which can create exquisitely detailed patient files with just a few mouse clicks," writes Fred Schulte, a reporter for the Center for Public Integrity (CPI) in Washington, DC.

Schulte reports that over the past decade, thousands of medical professionals have submitted inflated claims to Medicare at an estimated cost to the program of at least $ 11 billion.

He alleges that some physicians and other providers use "upcoding" to charge for a higher and more costly range of services than they actually provide, and that the Medicare billing system and a poor oversight allow such deceptive practices to slide under the radar.

"Upcoding is facilitated by abuse of Medicare billing codes that reflect the range of care delivered and the time it takes. Many doctors have steadily billed the higher-level - and more lucrative - codes, while spurning those that pay less," Schulte writes.

Medicare Evaluation and Management codes allow physicians and certain non-physician providers to be paid for services ranging from brief consultations or minor procedures to more time- and labor-intensive interventions. Payments are based primarily on reported case complexity, with a multiplying factor for time spent.

The devil, says the author, comes in the billing details, in which some providers may exaggerate the scope of work they perform on a particular case.

"Some of the most dramatic surges in higher-cost billing codes have occurred in hospital emergency rooms. Hospitals are permitted to set their own rules for billing outpatient charges and these payments are seldom audited by Medicare," he writes.

In a separate article, CPI reporters Joe Eaton and David Donald report that hospital emergency rooms nearly doubled the percentage of the top two Evaluation and Management codes billed over 8 years, from 25% in 2001 to 45% in 2008.

For their part, hospitals defend the increase as resulting from worsened severity of illness among patients seen in emergency departments, as well as more accurate billing.

Medicare makes a distinction between fraud, such as billing for services or supplies that were not provided or altering a claim to get a higher payment, and abuse, which includes unbundled or excessive charges or charges for medically unnecessary services.

By Neil Osterweil, medwireNews reporter