ASC Compliance & Coding

Medicare Fraud & Abuse Issues in OASC Reimbursement

By Riva Lee Asbell

There’s not much written on Medicare fraud and abuse in the ASC since most management personnel in ASCs are concerned with meeting requirements of Medicare’s Conditions for Coverage. Nevertheless, there are definite issues to be aware of when involved with the administration of an ASC.

Medicare Compliance Hierarchy

Most providers and ASC personnel are under the impression that the Centers for Medicare and Medicaid Services (CMS) are at the top of the food chain. Not true. Actually, the Office of the Inspector General (OIG) provides oversight of CMS activities. CMS, in turn, oversees Medicare Administrative Contractors (MAC), often referred to as carriers. CMS also contracts with the Recovery Auditor program, formerly entitled Recovery Auditor Contractor (RAC), which recently moved into the ASC arena to address issues concerning blepharoplasty (cosmetic versus functional) and aflibercept/ranibizumab (using a diagnosis that doesn’t support medical necessity).

The hierarchy is diagrammed as follows:

Thus, CMS itself is overseen by the OIG. RACs must have all of their audit issues approved by CMS. CMS, in turn, provides supervision and direction for the MACs.

Medicare’s Definitions of Fraud And Abuse

Different government publications define Fraud and Abuse using various wording; however, the essence remains the same. Succinctly expressed, a person commits fraud when there is intent.

Fraud

Medicare Learning Network, the CMS publication used to provide educational information to providers, has used the following descriptions.

“In general, fraud is defined as making false statements or representations of material facts to obtain some benefit or payment for which no entitlement would otherwise exist. These acts may be committed either for the person’s own benefit or for the benefit of some other party. In other words, fraud includes the obtaining of some of value through misrepresentation or concealment of material facts.”

Further clarification is given in CMS/NHIC Ambulatory Surgery Center Billing Guide.

“Fraud is the intentional deception or misrepresentation that the individual knows to be false, or does not believe to be true and makes, knowing that the deception could result in some unauthorized benefit to himself/herself or some other person. The most frequent line of fraud arises from a false statement or misrepresentation made, or caused to be made, that is material to entitlement or payment under the Medicare program. Attempts to defraud the Medicare program may take a variety of forms.”

Their examples include:

• Billing for services or supplies that were not provided

• Misrepresenting services rendered or the diagnosis for the patient to justify the services or equipment furnished

• Soliciting, offering, or receiving a kickback, bribe or rebate

From a legal perspective — and you should contact a healthcare attorney for detailed information — there are various issues that come into play when dealing with ASCs.

Inducement. There is an overall lack of understanding of the consequences of either not adhering to, or not being cognizant of, the reimbursement requirements when cosmetic procedures are performed. If a patient is not charged for the ASC facility fee or anesthesia fee when a cosmetic procedure is performed — the fee is waived by the ASC, anesthesiologist or even the surgeon — the issue of inducement arises. If procedures performed are part cosmetic and part functional, such as a functional ptosis repair and cosmetic blepharoplasty, then the cosmetic surgical facility fee and anesthesia fee must be charged to the patient.

Not Charging for Procedures. For example, a patient is scheduled for a functional blepharoplasty and happens to have a non-symptomatic small lesion on his forehead. The surgeon tells the patient that she will take it off during the same surgical session. When neither the physician nor the ASC charges the patient for the surgical fee and facility fee respectively, this can be perceived as an inducement by the ASC to have the surgeon bring her work there.

Falsifying Operative Notes. Many ASC personnel aren’t familiar with the subtleties of coding for oculoplastic surgery. As abhorrent as it may seem to most physicians, I have seen instances of falsifying operative notes in order to charge Medicare. An example of this would be describing a lower eyelid blepharoplasty as an ectropion repair.

Abuse

The NHIC Billing Guide defines abuse as follows:

“Abuse describes incidents or practices of providers that are inconsistent with accepted sound medical practices, directly or indirectly resulting in unnecessary costs to the program, improper payment for services that fail to meet professionally recognized standards of care, or services that are medically unnecessary…

Although these practices may initially be considered as abuse, under certain circumstances they may be considered fraudulent…”

Their examples include:

• Unbundled charges

• Excessive charges

• Medically unnecessary services

• Improper billing practices

Unbundled charges often involve applying the modifier 59 to break code pair edits of the NCCI (National Correct Coding Initiative). Just because you can unbundle procedures with modifier 59 doesn’t mean you should!

OIG Issues

The OIG in its role as overseer of CMS activities conducts studies on various payment issues and the role of the MACs in causing erroneous payments. These studies are performed on all aspects of Medicare reimbursement.

Place of Service (POS). For some time, the OIG has been investigating errors made in assigning the correct place of service to procedures. Since there is a site-of-service differential in payment based on where a procedure is performed, there are many errors made that fall into this category. It’s quite common for lasers to be owned and placed in an ASC. The physician then must list the POS as ASC and not office. While this basically is a physician reimbursement issue, the ASC will be involved in these audits and may have their records requested.

Multiple Procedure Reduction. Medicare’s policy for reimbursement of multiple procedures performed on the same patient during the same session is that the first procedure is reimbursed at 100% of the allowable fee, and the four subsequent procedures are reimbursed at 50%. The OIG has found that frequently all the procedures aren’t listed on the same claim resulting in improper payment of claims. If two procedures are listed on one claim and the third and fourth on a separate second claim, then payment of the third and fourth procedure may not be reduced as they should be since it appears as a separate claim. The ASC is entitled to only 50% of procedures #3 and #4; however, since it is a separate claim the MAC erroneously may pay 100% for #3 and 50% for #4. Make sure all procedures are on the same claim.

RAC Issues

The country is divided into four geographic areas for purposes of RAC jurisdiction, all of which report to CMS. The issues they’re auditing must be approved by Medicare and the RAC is paid on a contingency basis. Interestingly, in the CMS report to congress it was stated that “In Fiscal Year (FY) 2011, Recovery Auditors collectively identified and corrected 887,291 claims for improper payments, which resulted in $939.3 million dollars in improper payments being corrected. The total correction identified $797.4 million in overpayments and $141.9 million in underpayments repaid to providers and suppliers (see Appendix B). After taking into consideration all fees, costs, and appeals the Medicare FFS Recovery Audit Program returned $488.2 million to the Medicare Trust Fund.”

The RAC audit issues currently listed by the different RAC auditors for review in ophthalmology for ASCs are:

• Blepharoplasty. “Blepharoplasty is the plastic repair of the eyelid, and usually refers to an operation in which redundant skin, muscle, and/or fat are excised. Functional blepharoplasty usually involves the excision of skin and orbicularis muscle. This procedure is usually done to correct a deficit in the upper or peripheral field of vision as noted on forward gaze by skin resting on the upper eyelashes. When blepharoplasty repair is done for cosmetic purposes it does not meet the criteria of the functional visual impairment parameters and is considered not reasonable and medical [sic] necessary and therefore will denied.”

• Ranibizumab and Afilibercept. “Potential incorrect billing occurred for ranibizumab and afibercept claims billed with an ICD-9-CM code that does not support medical necessity, according to existing Medicare policy, FDA labeling, accepted guidelines, approved compendia, or other Medicare rules and regulations. Payment will be recouped when no additional documentation is received from the provider for complex review within the 45-day response period.”

Whereas with OIG issues it’s CMS that is being audited, with RAC audits, the ASC is being audited. Be prepared to defend yourself when this happens, especially since so many RAC audits are erroneous. ◊