Medicaid Fraud Zealots Could Nail Unsuspecting Physicians
Special Report - October 2007
By Crystal Conde
During the past 14 years he's practiced as a Kaufman pediatrician, Charles Turner Lewis, MD, has never turned away Medicaid patients. In fact, Medicaid covers 70 percent of the children he treats, thus he frequently bills the state for reimbursement.
But Dr. Lewis has struggled to keep his office open for almost two years, after his billing practices caught the attention of the Office of Inspector General (OIG), a Texas Health and Human Services Commission (HHSC) agency that monitors Medicaid to prevent and reduce waste, abuse, and fraud. A Dallas television report in June quoted OIG attorney Ralph Longmire as saying some of Dr. Lewis' billing practices were "a bit high."
OIG tracks Medicaid payments to physicians through the Medicaid Fraud and Abuse Detection System (MFADS). The complex system identifies any anomalies, such as upcoding. MFADS creates statistical analyses for all Texas physicians based on how frequently they bill office visit codes in a certain year. By comparing a physician's billing rates for specific codes to those of offices throughout the state, OIG red-flags physicians who are billing certain codes more often than others are. After an audit, OIG may determine that documentation doesn't support specific reimbursements. The agency will not only recoup the payments but also add administrative fees of up to three times the recoupment.
Dr. Lewis is all too familiar with OIG's audit process and questions MFADS' validity. He hired a consulting firm to conduct an independent statistical analysis to confirm OIG's assessment of his billing. The company found OIG compared Dr. Lewis to large hospital systems with specialists, but he works in a rural area without pediatric specialists who will accept new Medicaid patients.
"We were able to disprove the state's position by showing they used a flawed system. They [OIG] say they're comparing me to my peers when in actuality they're not," Dr. Lewis said.
He adds that MFADS also cannot take into account special circumstances like his. Without specialists who treat new Medicaid patients, Dr. Lewis must provide services that are more complex, while children wait to see a specialist at a Dallas hospital.
"OIG simply looks at peer groups, and if you're an outlier, you have to come in," he said.
Dr. Lewis had few allies in his battle with OIG until he turned to the Texas Medical Association earlier this year.
Refusing to Roll Over
In its investigation of Dr. Lewis, OIG reviewed 30 patient files out of tens of thousands and concluded that overbilling for 2004 and 2005 totaled $146,396.89. After OIG factored in administrative penalties, Dr. Lewis potentially owed the state $439,109.67.
Confident he had not intentionally defrauded Medicaid, Dr. Lewis requested a formal hearing with the State Office of Administrative Hearings. During the four months leading up to the hearing, the state withheld 25 percent of all his Medicaid payments. At the hearing last year, Robert Kottman, MD, a medical coding expert, testified that he examined the same 30 files and found Dr. Lewis' charges to be in line.
Judge Shannon Kilgore ruled in Dr. Lewis' favor and threw out the 25-percent payment withholding. The state contested and lost.
Despite Dr. Lewis' victory at the hearing, OIG didn't let up and in June last year ordered him to file all Medicaid claims by paper, instead of electronically. Dr. Lewis' attorney, Hugh Barton, JD, says this type of action can't be appealed in court. Physicians lack a legal avenue for due process when facing actions by OIG.
Now, Dr. Lewis' claims are reviewed by hand, and he says the state has denied more than $500,000 in traditional Medicaid claims. Claims processed through Parkland Community Health Plan Medicaid HMO, however, are paid.
Facing potential financial ruin and the threat of having to close his doors, Dr. Lewis is running his practice out of his own pockets.
"I've gone through all of my retirement savings," he said. "I've sold a car, I've refinanced my home, we've had to hock my wife's wedding ring, and we've gone through all of our stock options. We're down to our last $50,000."
Dr. Lewis describes OIG's auditing tactics as Mafia-like and intimidating. He says he felt isolated when he first decided not to roll over and pay the state close to half-a-million dollars.
"The power the OIG gets comes from intimidation, and sometimes it's easier to pay and be done with it. But when you do that, you've admitted you've done something wrong, even though you know in your heart you didn't," he said. "The reality is that right now, with the way the state is set up, they [OIG] can cripple physicians who have high Medicaid populations."
In its pursuit to recoup Medicaid overpayments from physicians, OIG doesn't show any sign of slowing down. The agency's Medicaid Provider Integrity staff, charged with investigating physician fraud in the Texas Medicaid Program, has grown by 16 additional full-time employees. By ramping up its workforce, the unit now has field investigators in Dallas, Houston, San Antonio, and Edinburg, in addition to headquarters in Austin.
According to the Texas OIG's Semi-Annual Report in May, HHSC's Office of Chief Counsel collaborated with the Sanctions Unit to recover more than $5 million in Medicaid overpayments in the first two quarters of this state fiscal year alone. Those overpayments were collected from outpatient rehabilitation facilities that provide physical, speech, and occupational therapies to Medicaid patients. Overall, the Sanctions Unit has recovered $8,057,596 in the first two quarters of this state fiscal year.
Other physicians may find themselves in the same situation as Dr. Lewis.
"We pulled all that information together and ran our own internal analysis of those codes and looked at them by region, provider type, and specialty," said Jim Lemons, cofounder of National Healthcare Reimbursement Consultants (NHRC), a Dripping Springs company that helps hospitals, physician offices, rehabilitation facilities, ambulance services, and law firms with billing, claims recovery, and Medicaid compliance. NHRC requests reports from the state based on a doctor's billing of the 10 CPT codes the OIG monitors. The firm compares physicians by specialty and creates bell curves that show physicians where they should fall within each code.
"When we did that, we were really surprised at the number of physicians who were potential targets for OIG," Mr. Lemons said.
Making Sense of the Process
In addition to OIG pressure, among Dr. Lewis' frustrations with OIG is what he describes as the guise of education outreach it used to communicate with him initially.
After receiving a message from his office manager that OIG wished to discuss education updates to the Medicaid system, Dr. Lewis returned the call only to be told he'd overbilled the state more than $140,000. He was told he had one week to attend an "educational meeting" with OIG in Austin.
"It was in no way an educational meeting," Dr. Lewis said. "It was a total accusatory meeting in which they [OIG] told me to set up a payment plan or else. It's a total ruse."
Mr. Barton attended the meeting and says its purpose wasn't to educate Dr. Lewis.
"Education and accusation are two different things," Mr. Barton said. "These are state employees who believe they are above the law. They think they're not answerable to anybody. That's not right."
But according to Bart Bevers, HHSC's interim inspector general and former OIG deputy inspector general for enforcement, the agency uses its power to educate physicians, not only to fight fraud and identify upcoding.
"One of the things we do is look at what the legislature has done or what the legislative intent was. They've given us a hammer, but we don't hit everybody with it," Mr. Bevers said. "A lot of times we will use that hammer to build a bridge of education with the provider community or with a specific provider."
Mr. Bevers says the agency conducts educational visits with physicians to address fraud, waste, and abuse. These visits entail an explanation of what the agency has found, whether in relation to coding or to complying with regular filing deadlines. Genie Dekneef, director of technology analysis and development support for OIG, says visits also include a clarification of correct claims-filing procedures.
It is unknown whether educational visits with physicians occur before or after physicians are notified of potential upcoding. Mr. Bevers says he is leery of divulging the educational-visit timeline because he worries the information would reveal how OIG manages its processes and carries out its procedures.
"The best answer I could give you is, it depends," he says. "We love to give honest answers and be responsive, but at the same time I want to be sure that we guard very closely some of our internal processes. If we explain where the radar is, then people can fly right underneath it, and we don't want that to happen."
In his battle to clear his name and free his practice of OIG's control, Dr. Lewis' devotion to his patients has motivated him to reform what he calls "an agency gone haywire," a state agency he thinks should be trying to encourage physician participation in Medicaid. The program has taken a hit: Physicians accepting new Medicaid patients declined from 67 percent in 2000 to 38 percent in 2006.
The program received some relief this past legislative session, thanks to the efforts of the TMA and the settlement of the Frew vs. Hawkins lawsuit. Physicians' Medicaid reimbursements will increase 25 percent for children's services and 10 percent for adult care.
The much-needed boost in reimbursement is a step in the right direction, but according to Dr. Lewis, administrative hassles for doctors who care for Medicaid patients need to be alleviated. In his rural area, he's the only physician who accepts new Medicaid patients; he continues to see them because, he says, they deserve the same level of care afforded to those with private insurance plans.
"I could have taken the easy way out. I could have closed my office and taken an insurance-only job in Dallas," he said. "But who would take care of Medicaid patients?"
Help From TMA
His steadfast commitment to his patients has led Dr. Lewis on a journey to find support and a helping hand. In the spring, he found respite at TexMed 2007 in Dallas.
There, he relayed his story to a member of the Dallas County Medical Society, who urged him to contact TMA's Office of the General Counsel. After contacting TMA and sending in documentation of his dealings with OIG, Dr. Lewis and Mr. Barton met with TMA's Office of Governmental Affairs and Office of the General Counsel. They recommended Dr. Lewis meet with state legislators and allow a TMA reimbursement specialist to review 10 files of Medicaid claims the state denied. The coder's examination of the claims was favorable. TMA's Patient-Physician Advocacy Committee is set to review the claims next.
TMA has additional resources available to physicians who suspect their billing and coding practices may need some revision or who simply want to make sure they're on track. TMA's Practice Consulting and Payment Advocacy departments provide services to help physicians avoid delayed and incorrect reimbursement, as well as a tool to evaluate Medicare coding. (See "TMA Offers Consulting Services.")
Because th Medicaid coding system is complex, physicians make errors. NHRC attorney David DeGroot points out that OIG doesn't offer any seminars on Medicaid coding, a service he says would benefit physicians.
The OIG Semi-Annual Report devotes two of its 81 pages to Medicaid fraud detection and abuse prevention training. The report says two-hour interactive seminars train Medicaid physicians, contractors, their employees, and staff from other state agencies to identify and refer waste, abuse, and fraud in the Medicaid program.
"Some doctors just don't know how to code. The problem is the state has not lived up to its commitment to educate doctors on how to code office visits," Mr. DeGroot said.
As evidence of OIG's education outreach, Ms. Dekneef cites offerings on the Web site of the Medicaid claims administrator, Texas Medicaid & Healthcare Partnership (TMHP). On the site ( www.tmhp.com ), physicians can register for a workshop, access the 2007 Texas Medicaid Provider Procedures Manual , and stay up to date on changes in Medicaid policy.
But the availability of online resources doesn't quell Dr. Lewis' fears regarding how far OIG is willing to go in its quest to recoup overpayments.
OIG now features a Provider Self-Reporting Guidance link on its Web site, https://oig.hhsc.state.tx.us. Mr. Bevers calls the ability for physicians to report themselves a positive move.
"A lot of folks are willing to come in and say, 'Hey, we've made some mistakes. We'd like to sit down and explain what we've done and address that issue,'" he said. "It's a lot easier to get my sympathy when you self-report and come tell on yourself versus committing intentional fraud over the period of five or six years and we find out about it through other processes."
Mr. Barton cautions physicians against reporting mistakes to the OIG, an agency he says tries to run physicians out of business. He recommends, instead, that physicians who catch a mistake report it to TMHP or to their insurance carriers.
Like Mr. Barton, Mr. DeGroot says self-reporting could put physicians at greater risk.
"If they self-report to OIG, they're basically saying, 'I've committed criminal acts.' It would be unwise to do that. OIG doesn't promise anything, only saying they'll take the fact that the physician self-reports into consideration," he said.
Dr. Lewis believes a concerted approach among the medical community, with the help of TMA, county medical societies, and other advocacy groups, is key to changing a system that he says targets physicians and ultimately hurts patients.
He says physicians should unite to ensure OIG doesn't trample their constitutional rights of due process.
In an effort to see that his investigation is handled fairly, he and Mr. Barton met with HHSC Commissioner Albert Hawkins in June.
Mr. Barton says the commissioner agreed to look into the doctor's case. As of mid-August, neither Dr. Lewis nor his attorney had received an update or response from HHSC.
Hopeful the meeting with the commissioner will have positive ramifications, Dr. Lewis has made it his mission to improve conditions for doctors who provide care to Medicaid patients.
"My experience with OIG has renewed the commitment that I'm going to, until the day I retire, fix the system, however I have to do that," he said. "I want to get other physicians together and do something about this. Physicians banded together are strong, but physicians isolated are weak."
Editor's Note: Dr. Lewis would like to hear from physicians who are dealing with OIG or who would like to offer their support. He can be reached via e-mail at firstname.lastname@example.org. Member physicians experiencing similar Medicaid program integrity problems and needing assistance can contact TMA Director of Governmental Affairs Helen Kent Davis at (800) 880-1300, ext. 1401, or (512) 370-1401, or by email at Helen Kent Davis ; or TMA Director of Medical Economics Rich Johnson at (800) 880-1300, ext. 1315, or (512) 370-1315, or by e-mail at Richard W. Johnson Jr.
Crystal Condecan be reached at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email at Crystal Conde.
TMA Offers Consulting Services
Given the complexity of billing and a lack of understanding about proper coding practices, physicians may not realize they're making mistakes until it's too late.
To help physicians avoid delayed and incorrect reimbursement, TMA Practice Consulting offers two types of reviews to determine whether a practice is following payers' guidelines for appropriate billing. The first option is a baseline review that provides a one-time analysis of a practice's coding and documentation habits and results in a report that practices can use to take improvement measures. The second option is a quarterly review, which includes a baseline review, consultation, and quarterly follow-up audits. For more information, visit www.consulting.texmed.org. To contact a Practice Consulting representative, call (800) 523-8776 or e-mail TMA Practice Consulting.
Additional services include the Hassle Factor Log, coding and billing hotline, mini-consultations, and payment advocacy - all free to TMA members. TMA also can intervene with an insurer or health care payment plan to help resolve a problem. Call (800) 880-1300, ext. 1632, to reach the Hassle Factor Log.
TMA mini-consultations send a staff member to county medical societies to conduct free 30-minute sessions with individual practices on coding, billing, reimbursement, denial of services, or claims filing. Mini-consultations can be scheduled through county medical societies.
TMA Payment Advocacy staff meet regularly with major payers to resolve payment problems and medical policy issues.
To aid physicians and their office staff members with tracking their Medicare billing and coding, TMA Payment Advocacy offers physician members a Medicare practice evaluation tool that details the frequency of evaluation and management coding by specialty. TMA members can access the tool at www.texmed.org by selecting Practice Management from the menu and clicking on Medicare.
If you have questions about reimbursement, coding, billing, or collections, TMA's Reimbursement Community can help. It's part of the TMA Online Communities that helps TMA member physicians and their staff connect with colleagues, learn solutions to practice management problems, and share best ideas.
The TMA Reimbursement Community focuses on coding, billing, and collections. Community members can post questions, give answers, share experiences, and access hot topics, resources, and links. Community membership is free to TMA member physicians and their office staff. Once logged in to the Reimbursement Community, you can easily access TMA Hassle Factor Log forms to use when you need help with problem insurance claims, as well as ongoing updates of payer policies and fee schedule changes and Medicare Advantage plans.
If you have questions or need help logging in, call the TMA Knowledge Center at (800) 880-7955 or email TMA Knowledge Center .
Back to article
October 2007 Texas Medicine Contents
Texas Medicine Main Page