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Let the Games End!

October 28, 2021

Summary: Two unrelated news stories highlight ways that powerful actors in our healthcare system manipulate complex reimbursement rules and procedures, approaching and crossing legal boundaries. Detecting and stopping abuse in our complex profit-focused system is impossible. We need to end this gaming, with a simple fair payment system.

5 things about DOJ’s upcoding allegations against Kaiser
Modern Healthcare
October 26, 2021
By Alex Kacik

Kaiser Permanente allegedly coerced employees to upcode claims for Medicare Advantage beneficiaries, resulting in an estimated 75% error rate, according to a new complaint from the U.S. Justice Department.

The federal government intervened in six related lawsuits in July and filed a complaint Monday, outlining how Kaiser physicians allegedly changed medical records often months after care was provided to boost the Oakland, California-based integrated health system’s Medicare Advantage reimbursement. More than half of Kaiser physicians said they were forced to add diagnoses they did not consider, evaluate or treat, according to one of the whistleblowers and former Kaiser medical coder, Randi Osinek.

5. Some of the diagnoses that Kaiser allegedly added via the chart reviews did not even exist; many allegedly did not require or affect patient care or treatment. These chart reviews were often added months or even a year or more after the visit so that Kaiser could get risk adjusted payments for the newly added diagnoses, according to the complaint.

Wall Street Is Pressing ER Docs To Fleece Patients
Daily Poster
October 27, 2021
By Maureen Tkacik

Robert McNamara, a Temple University medical school professor who has been working for decades to galvanize ER doctors in opposition to the “corporate practice of medicine,” had proposed a resolution that would essentially force all ER staffing companies seeking to do business with ACEP [American College of Emergency Physicians] to periodically furnish their physicians with data on the services and procedures the company had billed for under their license numbers.

… Unsurprisingly, the ACEP Board expressed extreme reluctance to adopting the proposal, noting that four separate attorneys it had consulted believed there was “substantial risk” ….

“ACEP engaged outside counsel to advise on whether securing regular reporting of billing in a physician’s name could inadvertently subject that physician to potential liability under the False Claims Act [emphasis added], since provision of this information could now leave them considered to be ‘knowing,’” they wrote.

In other words: emergency room doctors are better off not knowing what their private equity overlords are billing under their license numbers, because they are less likely to go to jail for Medicare fraud if they didn’t actually know they were committing it. 

Comment by: Jim Kahn

Our health system’s arcane payment rules + big-profit corporate mentality = the perfect medium for intensive gaming, both legal and illegal. These two stories illustrate different manifestations of the problem — albeit just the tip of the iceberg quantitatively, a faint hint of the true scale of abuse.

Kaiser Permanente is considered by many an admirable actor in the HMO world, with a history of innovative care models. Yet, in this article in Modern Healthcare, we learn that the US Department of Justice is taking KP to court for orchestrated efforts to increase physician disease severity coding – even to add false diagnoses – to bump Medicare Advantage revenues by tens of millions of dollars. HJM has covered “risk adjustment” exploitation before. The money at stake with exaggerated coding is astronomical, eliciting the worst behaviors among corporate actors in health.

Organizations like ACEP were founded to represent the interests of doctors, which should include fair and transparent billing. But the Daily Poster describes that ACEP has increasingly focused on preserving ER profit, including for private equity investments. It abets a corporate model that hides potentially fraudulent billing. HJM recently addressed the hazards of private equity. The new article describes deep ties that two former heads of ACEP have to PE. One even dismissed the problem of surprise billing – rampant in ERs staffed by private equity-funded companies which seek to profit from out-of-network charges. The doctors are coerced into being complicit, with plausible deniability.

How can we end this gaming, abuse, and extraction of resources from the health system? Single payer would use simple, fair rules. For example: annual global budgets for hospitals and their ERs. Ambulatory care doctors would typically be paid fee-for-service, with no need for exploitable risk adjustment data. If capitation is permitted (a discussion), it would rely on a standard clinically-focused electronic health record containing legitimate, consistent diagnostic information.

Let the billing games end!


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