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September 2019

Editor’s Note: Vindication Sends a Message About Vigilance
By Lee DeOrio
For The Record
Vol. 31 No. 8 P. 3

When a Texas judge dismissed a False Claims lawsuit against Baylor Scott & White Health that alleged the health system upcoded claims, coders and clinical documentation specialists rightfully stuck out their chests.

The ruling saved Baylor from forking over a cool $61.8 million, the amount it was said to have corralled in fraudulent claims to Medicare over seven years. Baylor’s medical director was accused of leading the effort to increase higher billing codes without medical justification.

Not so, said Judge David Ezra, who in August ruled that taking advantage of coding opportunities backed by strong documentation is no crime. Like a similar whistleblower complaint filed by Integra Med Analytics, the lawsuit against Baylor alleged the improper upcoding of three main diagnoses: acute respiratory failure, severe malnutrition, and sepsis. Both lawsuits were based not on any known cases of upcoding but rather on statistical analysis from public health data (Medicare’s MedPAR) that showed Baylor and a California hospital to be billing significantly higher percentages of diagnosis-related groups (DRGs) with these “expensive” secondary diagnoses than their peers.

Clearly, the presumption was that something wrong must be going on. In both cases, the specifics involved aggressive query practices that led physicians to document the three diagnoses specifically in order to assign a higher Medicare severity-DRG.

The suit against the California hospital was upheld and proceeded while the suit against Baylor was dropped because there were no instances presented and no pattern found that supported inappropriate query practices or incorrect coding. The finding in the Baylor case was that while the statistics were correct in showing a higher than normal reporting of those three diagnoses, the queries were formatted and presented in a compliant manner and clinical information in the chart supported the diagnoses. While staff were aggressive in that they did actively encourage specific documentation, it was within the limits of what is legal and allowable. A statistical anomaly did not support fraudulent activity.

These cases should raise caution flags. Facilities that ignore their public reporting and billing trends must reconsider or face the consequences. Clinical documentation improvement (CDI) departments more concerned with revenue generation without monitoring query processes could be at serious risk.

CDI consultants should employ compliance experts. CDI professionals should listen to experienced inpatient coders—maybe even hire a couple. After all, they’re well versed in what you can and can’t do in both coding and query format.

It’s nice that Baylor was exonerated, but every other audit agency, including the Medicare and Medicaid recovery audit contractors and managed care insurance companies, are blasting hospitals with chart requests for cases with these same diagnoses. So while Medicare may not be taking any money away from Baylor, the outcome should not be a signal to other organizations to put down their guard.