New York Times: Electronic Billing Raises Medicare Bills

September 24th, 2012
in econ_news

Econintersect:  The expectation was that increasing electronic medical records and billing dollar-with-wingsprocesses would lower costs and reduce incidence of errors.  The New York Times reports that the result has been just the opposite.  The use of electronic systems for billing has apparently enabled hospitals and doctors to alter the way they bill for services that is costing Medicare billions more per year.

Follow up:

Abuses appear to be widespread, although they may occur more in some medical specialties than others.  From a report of the Office of Inspector General, Department of Heallth and Human Services:

From 2001 to 2010, physicians increased their billing of higher level E/M codes in all types of E/M services. Among these physicians, we identified approximately 1,700 who consistently billed higher level E/M codes in 2010. Although these physicians differed from others in their billing of E/M codes, they practiced in nearly all States and represented similar specialties. The physicians who consistently billed higher level E/M codes also treated beneficiaries of similar ages and with similar diagnoses as those treated
by other physicians.

The report warned that elctronic coding of evaluation services was “vulnerable to fraud and abuse.”

Two examplescited in the New York Times article:

  • Faxton St. Luke’s Healthcare in Utica, N.Y., claimed 43% higher reimbursements in 2009,  the same year the hospital began using electronic health records.
  • Baptist Hospital in Nashville highest-paying claims climbed 82% in 2010, the year after it began using a software system for its emergency room records.

Another case described in the New York Times:

When Methodist Medical Center of Illinois in Peoria rolled out an electronic records system in 2006, Dr. Alan Gravett, a former emergency room physician, quickly expressed alarm.

He said the new system prompted doctors to click a box that indicated a thorough review of patients’ symptoms had taken place, even though the exams were rarely performed, while another function let doctors pull exam findings “from thin air” and include them in patients’ records.

In a whistle-blower lawsuit filed in 2007, Dr. Gravett contended that these techniques drove up Medicare reimbursement levels substantially. According to the lawsuit, Dr. Gravett was eventually fired for ordering too many tests. He says he was retaliated against for complaining about the new system. The Justice Department is weighing whether to join an amended suit in Federal District Court in Central Illinois.

John Lounsbury


Hat tip to Naked Capitalism.

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