A Kinder, Gentler HCFA?

Lawrence R. Huntoon, MD, PhD
Article Type: 
July/August 1999
Volume Number: 
Issue Number: 

All you skeptical physicians thought the only thing HCFA wants to recoup from you is money. An article in American Medical News tells us that "The E&M flap is the perfect opportunity for HCFA to recoup some of the physician trust it has lost over the years."(1) Of course the same article tells how a Medicare carrier, Connecticut General Life Insurance, demanded close to a million dollars in refunds from doctors in North Carolina because of a mistake made by the Medicare carrier. Sound familiar?(2)

Also, under the "trust me" HCFA regime, doctors are routinely considered guilty until proven innocent, and even if a Medicare carrier is ultimately found to be at fault, the carrier never has to repay anything and never suffers an adverse consequence. We are told that "Carriers are held to a different standard than doctors as far as refunds are concerned. If they make a mistake, they don't have to pay." Although in the case cited above, the Medicare carrier didn't follow the rules, HCFA felt the physicians were clearly at fault for their reckless disregard and deliberate ignorance of the payment rule change which was published in plain sight on page 59,524 of the Federal Register on November 25, 1991. Sounds like a friendlier, more reasonable and trustworthy HCFA to me. I mean after all, if those doctors fell asleep while doing their government-mandated reading of the Federal Register before they got to page 59,524, it's their own darn fault. Isn't it?

The same article tells us that in 1994, another Medicare carrier, Pennsylvania Blue Shield, demanded two million dollars from doctors in Pennsylvania again for something for which the doctors were not at fault. Fortunately, in both of these cases, the doctors prevailed in court.

But physicians don't always prevail in court against this "kinder and gentler" HCFA. HCFA has gone after physicians at teaching hospitals with a vengeance under the False Claims Act via the PATH (Physicians At Teaching Hospitals) program in a highly successful effort to recoup millions of dollars paid for none other than evaluation and management services. And, just to make sure the cards were fully stacked in their favor, HCFA utilized not only ambiguous and confusing guidelines but applied them retroactively.

"HCFA sent confusing, conflicting messages about proper payment and coding and is determined to apply rules published in 1995 and 1996 to patient care provided from 1990 to 1994." Additionally, "a top HHS attorney concedes that HCFA failed to 'consistently and clearly articulate' for many years its standards for paying teaching physicians."(3)

But all of that doesn't seem to matter. A California federal district court judge recently dismissed the physician lawsuit against HHS for this abusive PATH program.(4) With the threat of treble damages and the government's assumption of guilt until proven innocent, the PATH program is just too darn lucrative for the government to abandon, legalized plunder or not. "The Office of Inspector General has netted millions of dollars in settlements from institutions in its Physicians at Teaching Hospitals, or PATH, initiative."

But that's all water under the bridge. HCFA now wants a "relationship" with physicians, one founded on honor, trust, and fair play. Pay no attention to that recent Medicare audit that resulted in reduced or denied payment to physicians in 60 percent of cases because E&M documentation did not live up to HCFA standards. There couldn't possibly be anything wrong with HCFA's guidelines. It must be that the majority of physicians in this country just have no idea what they are doing or how to document it...right?

And, pay no attention to HCFA's new Prepayment Medical Review scheme which will focus on those popular E&M services so that they can prevent physicians from being paid for their work in the first place.(5) It's so much harder and invokes so much more hostility from physicians you see when HCFA asks for money back at some later date. It's so much "kinder and gentler" simply not to pay physicians any money in the first place...kind of like payroll taxes --- it doesn't hurt as much when the money is taken before you get the notion that it's really yours.

And, if you do owe money to HCFA and send them a check, you can forget about getting any sort of acknowledgement or receipt. HCFA recently outlawed this sort of acknowledgement likely because it will make it harder when HCFA asks for the money a second or third time if you have that pesky little slip of paper that says you already paid it. HCFA no doubt has its eye on "double dipping" as a new source of revenue to bolster the financially doomed Medicare program. "As a result of a directive from the Health Care Financing Administration (HCFA) effective March 5, 1998, the check control unit will no longer send letters to providers or beneficiaries acknowledging receipt of a check."(6)

But don't worry. Despite all of the ambiguous, complex, absurd and retroactive Medicare rules and regulations, if you're a good physician, aren't out to cheat anyone, and keep a low profile, none of this will affect you. "HCFA insists that it is out to punish real fraud, not innocent errors."(1) Of course that's not what it says they will do in the Medicare Bulletin.(5) HCFA has been doing something called "Focused Medical Reviews" which look at the frequency and pattern of procedure codes used by physicians. If you stray from the "middle of the herd," HCFA will identify and target you for special "treatment." According to HCFA, they assume that "high usage of codes may be a signal that services are not medically necessary or reasonable for the diagnosis and treatment of an illness/injury or to improve the functioning of a malformed body member."(5) Naturally, you will be considered "guilty" of overusage, and therefore guilty of doing things that aren't medically necessary for your patients who may be sicker than the rest of the government's herd, and it will be up to you to prove your innocence --- i.e., that you are a good doctor just trying to help your patients.

And lest you think that pleading that it was "just a mistake," an "incorrectly coded service," and this "kinder and gentler" HCFA won't pursue you for fraud, look at the published "action to be taken" by HCFA when they find an error in coding services. "Incorrect coding of services: Services will be denied and paid monies recouped. Caution: Services incorrectly coded may be considered as fraudulent if Medicare cannot detect that the provider has made a concerted effort to correct his/her billing." So if you made an honest error in coding and didn't detect it and, therefore, made no "concerted effort" to correct it or at least not one that the Medicare carrier could "detect," then expect a visit from Cosa-HCFA-Nostra who will make you an offer you will find hard to refuse --- pay the government double damages on the spot or face treble damages, $10,000 per incident, and become eligible for that feeling of 100 percent security one gets behind bars. This is the tactic the government used with great success in the PATH program. It's the government's new decriminalized organized crime program --- government-sanctioned extortion.

According to attorney Michael J. Schoppmann of the law firm Kern, Augustine, Conroy and Schoppmann, "Medicare has been empowered to target physicians as the new criminals for the coming millennium."(7) --- i.e., "physician" now equals "criminal." And, if the use of the term "target" leaves you with visions of government agents with guns trained on doctors and office staff, then according to attorney Schoppmann, you're right on target.

"Picture an average office suite in suburban New York City. Suddenly, the office door is slammed open and in burst more than twenty FBI agents! Wearing bulletproof vests with guns drawn, the FBI agents round up everyone in the office and begin pat-down personal searches. Employees are separated, detained, and refused access to telephones. Thousands of pages of documents are confiscated. Computers are seized as office personnel are interrogated in separate offices.

"The targets? Drug lords? Organized crime? Terrorists? Counterfeiters? No. It's a physician's office on a quiet street in an affluent, suburban community --- just like a thousand others throughout New York. It's a billing investigation by Medicare.

"Shocking? Absolutely. Exaggerated? Not a word of it. Still, you might be thinking, was the billing for patients never seen or services never rendered? No. Each of the patients was seen and treated. The 'crime?' An interpretation of CPT coding for the documentation of pre-treatment examinations."(7)

This is the "kinder and gentler" HCFA we are told we should trust. Although I am not one generally to make fashion predictions, if the above trend continues, I predict that Kevlar lined white lab coats with "I am a doctor not a target" printed in bold letters on front and back will become very popular in the next millennium.




1. How to Recoup Physicians' Trust, AMNews, May 11, 1998.
2. My Other Foot, AAPS Pamphlet No. 1043, October 1995.
3. Suing for an altered PATH, AMNews, Dec 1, 1997).
4. Court Dismisses PATH Lawsuit, AMNews, May 11, 1998.
5. Reminder-Expanded Prepayment Medical Review, Medicare B Bulletin, Upstate Medicare, May 1998.
6. Receipt of Checks, Medicare B Bulletin, Upstate Medicare, May 1998.
7. Schoppmann MJ. Searching for new criminals for the millennium? MSSNY News of New York, May 1998.

Dr. Huntoon is a neurologist in Jamestown, New York, president-elect of the AAPS, and serves on the editorial board of the Medical Sentinel.

Originally published in the Medical Sentinel 1999;4(4):138-139. Copyright ©1999 Association of American Physicians and Surgeons (AAPS).

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