Bills worry doctors, too Audits: Federal officials looking for fraud are auditing the billing of patients by faculty doctors at large teaching hospitals, and the doctors and hospitals are troubled by what they say have been ambiguous Medicare rules.

September 07, 1997|By M. William Salganik | M. William Salganik,SUN STAFF

Dr. Ronald Lesser, a Johns Hopkins neurologist who specializes in epilepsy, never leaves his office to see patients without one vital piece of equipment stuffed into the pocket of his lab coat -- a dog-eared wad of Medicare billing guidelines.

"When I'm seeing patients in the clinic," Lesser says, "I look at [the guidelines] -- not necessarily for every patient, but every afternoon."

Lesser knows he has to determine what level of billing is correct for services he performs. And, he adds ruefully, "They're saying that if I guess wrong, it's a felony."

Federal officials are in the process of auditing faculty doctor billings at large teaching hospitals. There haven't been any felony charges, but the national review was launched after the University of Pennsylvania had to repay $10 million in overpayments and $20 million in penalties two years ago.

Hopkins is due for an audit in the next few months, one of 33 on the current schedule. Federal officials say they are starting the audits at hospitals with the largest teaching programs, or at those where they have received complaints from "whistle-blowers."

The University of Maryland, the other academic medical center in the state, has been notified that it, too, is subject to review. While there are about 1,100 hospitals in the country that have residents, HHS is concentrating on the 125 associated with medical schools.

The money involved is substantial. Hopkins faculty doctors collected $26 million last year for caring for Medicare patients; University of Maryland faculty physicians collected $14.5 million. That represented 28 percent of Hopkins' faculty practice revenue, and 19 percent of Maryland's. (The fees are not paid directly to the doctors, who are on salary, but to the institutions.)

Fees paid to faculty doctors for patient care constitute nearly half the revenue of medical schools, says Ruth Hanft, a consultant and retired health policy professor who studies hospital finances. Those fees, she says, subsidize teaching and clinical research in the academic medical centers.

The teaching hospitals, in Maryland and elsewhere, are troubled by the audits. They say Medicare rules were ambiguous and, while they were clarified in 1996, it is not fair for audits, which cover a six-year period, to apply those standards retroactively.

"It's a question of what the standard of behavior was that was in place at the time of the audit period," argues Dr. Jordan J. Cohen, president of the Association of American Medical Colleges, which has been leading the fight against the audit program. "The standard they are trying to apply didn't exist at the time."

The issue pits a stepped-up government campaign to combat Medicare fraud against influential academic medical centers, which already are struggling with the pressures of managed care and tighter research funding.

The result is "a high-stakes situation in which political considerations may have greater weight than the merits of the issue," Karen Matherlee, co-director of the National Health Policy Forum at George Washington University, wrote in a background paper on the teaching hospital audits. "As employers, providers of health services, educators, and contributors to political campaigns they [the teaching hospitals] have tremendous clout in the American political system," she wrote.

In their fight to have the audit program dropped or modified, the hospitals have won the support of dozens of members of Congress. In response, the Department of Health and Human Services announced in July that it would drop 16 of 49 planned audits. Some of the intermediaries that process Medicare claims, HHS said, had issued advice to the hospitals that was confusing or conflicted with the rules set by the Woodlawn-based Health Care Financing Administration, which runs the Medicare program.

"The standards for paying teaching physicians under Part B of Medicare have not been consistently and clearly articulated by HCFA over a period of decades," conceded Harriet S. Rabb, HHS general counsel, in a letter to the American Medical Association and to Cohen of the AAMC.

The teaching hospitals, however, are not satisfied. As a national program, the AAMC says, Medicare should have national standards. Maryland's audit program is continuing -- as is the controversy.

"It is so complex that the billing procedures put in place by HCFA guarantee errors and can easily be the source of dispute," says Estelle A. Fishbein, vice president and general counsel for Hopkins. "There is no physician in the United States who has not had a dispute over third-party billing."

The penalties imposed on Penn and another Philadelphia teaching hospital, Thomas Jefferson ($6 million in addition to repaying $6 million in overpayments), the hospitals say, indicate that the government is treating billing errors as something well beyond honest mistakes.

"The assumption is that every billing error is fraud," Cohen complains.

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