Published 11/1/2013
Maureen Leahy

What You Need to Know About EHRs and Fraud

Upcoding, unbundling can be trouble

Fueled by Medicare incentives and the threat of noncompliance penalties, healthcare practices are increasingly adopting electronic health records (EHRs). By facilitating the exchange of patient data across the healthcare system, EHRs are designed to increase patient safety, minimize errors, and reduce costs. Despite their purported benefits, however, EHRs have come under increased government scrutiny, according to attorney Limo T. Cherian with the law firm of Hogan Marren, Ltd.

“The U.S. Department of Health and Human Services and the Department of Justice (DOJ) have identified that some providers are using EHRs fraudulently to obtain payments. This is illegal,” said Ms. Cherian.

At the AAOS Practice Management Meeting: Understanding and Preparing for the Future, Ms. Cherian explained the different types of EHR fraud and what practices can do to minimize their risk.

When is it fraud?
When it comes to health information technology (IT), “there is mistake, abuse, and then there is fraud,” said Ms. Cherian. For example, although coding errors and isolated documentation errors are considered mistakes, billing for services that were not medically necessary is abuse.

“Fraud, on the other hand, is something that is done knowingly or with reckless disregard,” she said. “However, intent is not something that can be monitored accurately because people don’t willingly admit to it.”

Regulatory agencies, therefore, rely heavily on sophisticated data analysis tools to help them identify health IT fraud. “The DOJ, Centers for Medicare & Medicaid Services (CMS), and insurance companies look at what practices bill, their documentation, their history, and how they compare to other practices. They examine how frequently suspected fraudulent activity occurs and whether there is a basis for being able to conclude it was done with intent,” she explained.

Although EHRs can increase patient safety, minimize errors, and reduce costs, they can also increase a practice’s risk of fraud, particularly with regard to upcoding and unbundling services.
Courtesy of Thinkstock

Common examples of EHR fraud include upcoding and unbundling, according to Ms. Cherian. Upcoding involves billing for a more complex service than what was actually provided in order to obtain a higher reimbursement. Unbundling is the practice of breaking out a procedure that is part of a global claim and billing for it separately.

“Although CMS does have a separate procedure list, it is somewhat of a misnomer because separate procedures are not really separate—they are usually part of another treatment,” she said. “When procedures are performed separately, they must be billed with specific modifiers. Instruct your coders to use these modifiers judiciously because payers monitor whether your use of them is consistent with other practices in your area.”

Physicians should also avoid cloning, carrying forward, and cutting and pasting documentation notes from previous exam appointments into a new record, Ms. Cherian noted. These are easy mistakes to make because most EHR systems are template-based. However, doing so can lead to overbilling and questions about whether or not the physician actually performed the exam.

Other documentation shortcuts that CMS scrutinizes, according to Ms. Cherian, include point and click entries, default entries, and unattributed authorship—authenticating notes that were made by another practitioner, such as a nurse or physician’s assistant.

Practice tips
So how can practices minimize their EHR fraud risks? Ms. Cherian offered the following advice:

  • Most importantly, verify all the data in the medical record to make sure it supports diagnosis and billing.
  • Check EHR entries to ensure they are correct. If possible, review output reports for accuracy and consistency.
  • Periodically review office billing and coding procedures. Make sure that staff understand all of the reimbursement rules.
  • Make sure that you are coding place of service correctly—this is one of the most common errors with electronic coding, and it can affect reimbursement.

“I don’t mean to scare you, but your EHRs are being monitored. It’s very important, therefore, that all the data in the record accurately reflect what was done,” Ms. Cherian emphasized.

She added, “The EHR is a tool that is only as good as your judgment as physicians. It is how you get reimbursed, how your compliance gets measured, and if necessary, it will be the evidence against you.”

Maureen Leahy is assistant managing editor of AAOS Now. She can be reached at leahy@aaos.org