Return to the Perry Hookman, M.D., P.A. Home Page
The medical education community is up in arms over the HHS inspector general's PATH audits, which could cost the nation's 125 academic medical institutions billions of dollars.
So far, two institutions have been audited under the "Physicians At Teaching Hospitals," or PATH, program. The Clinical Practices of the University of Pennsylvania agreed to pay the government $10 million to resolve "alleged errors" in billing, plus a penalty of $20 million. And Thomas Jefferson University's Jefferson Faculty Foundation is paying $6 million in overpayments and $6 million in fines.
Currently about 30 institutions are undergoing audits, with the inspector general expected to announce several settlements in the next two months.
Attorney General Janet Reno "has said that behind violent crime, her No. 2 priority is rooting out health care fraud," said Ivy Baer, regulatory counsel in the Assn. of American Medical Colleges' division of health care affairs. And the Dept. of Health and Human Services inspector general believes teaching hospitals have committed fraud in their billings to Medicare, Baer added.
Teaching hospitals view the situation differently. They say that if there are discrepancies in their billings, they are only errors and not deliberate wrongdoing.
AAMC's concerns:
The AAMC, which is considering legal action against the government, has three major areas of concerns about the PATH program: ambiguity in guidelines, documentation standards and presumptions regarding errors.
Basically the inspector general is looking at two key areas: physician presence during services to patients and upcoding.
The Health Care Financing Administration laid out guidelines for physician presence in a letter to Medicare intermediaries (Intermediary Letter 372), but the AAMC and teaching hospitals say that vague wording led physicians to use a variety of methods to document their presence during services, resulting in errors and not fraud.
"The AAMC believes that teaching physicians have strived to the best of their ability, to comply fully with all HCFA requirements regarding Medicare billing. They are cooperating fully with the PATH reviews," said Robert Dickler, AAMC senior vice president for health care affairs, in an official statement.
"However, teaching physicians and the AAMC are very concerned about the inspector general's rationale for PATH program and about the punitive nature of the settlements that have resulted from it," Dickler said.
When the IG calls
But as debate continues, the audits roll on. Baer offered a picture of what an institution can expect when the government comes calling, and she provided some tips on how to avoid penalties in the future.
An institution can expect to receive on of two kinds of letters. One says the institution will be audited and asks for a list of documents. The other says the inspector general is thinking of auditing and also asks for document production.
"And count on them getting back to you and telling you you've been selected for audit," Baer said.
The institution then has two choices: PATH One, in which the government audits, or PATH Two, in which the teaching hospital selects the auditor.
"The government has made it very clear that they consider that if they audit, you are not being very cooperative," said Baer. This type of audit can lead to the treble-damages penalty, she warned.
Under PATH Two, an institution picks, and pays for, a government-approved auditor. the institution also must waive all privileges, including the right to confidentiality of attorney-client communication work documents. Plus, the government shares in all the auditor's reports and meetings.
Favorable Treatment, IG Style
"And in return for all of this, what the government will do is give you favorable treatment," Baer said. "Now, how do they characterize favorable treatment? They will generally credit you auditor's findings, they will accord substantial weight to your level of cooperation and participation, and they will make that level known to other federal agencies.
The inspector general wants an auditor to look at a minimum of 100 Medicare admissions during the course of a single year -- currently 1994 but soon to be 1995. Those 100 admissions then can generate up to 2,000 physician encounters. Any billing errors are extrapolated to a five-year period ending with the audited year.
There isn't much good news for teaching hospitals in these audits. At best, Pat Marion, the inspector general's health care audit manager in Philadelphia, offered that his office will look favorably upon institutions that avail themselves of the current window for voluntary submission to the PATH audit.
"If they don't come to see us, and we come knocking on their door, it will ultimately cost them more money," Marion said. "Historically, you look at the two audits we've concluded: Penn, which wasn't voluntary, got treble damages, and Jefferson, which came forward, got double damages."
Creating a Compliance Plan
As for the future, Baer offers two bits of advice.
First "Document, document, document." Then "Develop and institution wide compliance program."
Attorney Brent Saunders agreed. Saunders is the corporate compliance officer and assistant counsel with Thomas Jefferson University.
"I think any institution should develop a comprehensive compliance plan," he said. "That way, if you're audited, you can begin with a full arsenal of information."
Compliance programs don't come cheap but, Baer said, they're worth the potential millions of dollars considering the current legal climate.
"A compliance plan is a way of demonstrating to the federal government that you're complying with the appropriate rules and regulations," she said.
In such a program a teaching hospital should first establish a corporate code of conduct.
"This doesn't mean just saying 'We'll comply with all the laws,' " Baer said. "What you need to do is go through and look at the hot-button issues for your institution. You need to write down what needs to be done to make sure you comply with the rules and regulations, and you need to distribute it to your employees, making sure they read it and understand it."
Then appoint a compliance officer or create a compliance committee. this person or entity should have authority to report to the board of directors.
Next, screen employees with discretionary authority to see if anyone has a criminal record.
All personnel need to be educated and trained, and auditing and monitoring programs should be in place.
Finally, create a mechanism for reporting, investigating and correcting problems.
"Problems exist, but they have to be dealt with," Baer said. You don't want to have a pattern. The government is looking for patterns."