Medicare and Third Party Payers ... Abusing Electronic Billing by Health Care Providers ... MOM vs. OPM

BACKGROUND

A long time ago, I was born in the Methodist Hospital in Peoria, Illinois. My Dad died there almost 31 years later. That hospital, needless to say, was also a steady presence in the lives of many of those I knew well and grew up with during my early years.

So imagine my surprise at reading this morning about how the Methodist Hospital (now named the Methodist Medical Center) is a prominent player in abusing taxpayers through Medicare encouraged new electronic billing practices. That's right. The "efficiency" of electronic record keeping and billing are costing us billions of dollars for improper billing made easier by the electronic method so heavily recommended and subsidized by our government. I'm not sure it's all fraud, but it definitely has a stench to it.

More importantly, it's another example of government OPM at work. By and large, we aren't required to pay for the vast majority of our Medicare treatment. The government does. But we're the government, you say. Of course, we are but we don't act that way. We pretend we're getting what we deserve. Well, maybe we are doing just that.

Almost all, if not all, government entitlement programs allow us as individuals not to concern ourselves too much with either the details or the amount of the costs associated with services provided to us by providers who are paid by the third party government.

{NOTE: Think of such other things as the post office, public schools, medical care (including nursing home care), Social Security and public sector pensions, where the "safety net" prevails and provides a certain benefit, regardless of its cost. Or food stamps, student loan programs, college tuition charges and the like. In all these areas, MOM isn't front and center. It's OPM or perhaps better referred to as deferred MOM, since in the end We the People get the final bill.

We'll continue to write about the big three of (1) public sector pension underfunding, (2) the fiscal cliff and (3) the so-called Fed cliff in future posts. The public pension unfunded obligations are in the trillions of dollars, and the fiscal cliff is the half hearted at best attempt by Congress to come to terms with our trillions of dollars in national debt and ongoing deficits. Meanwhile, the Fed cliff is the printing of trillions of dollars in new money in order to stave off deflation now in the hope that Congress and We the People will address our spending problems sometime soon. But we'll defer those discussions for another time.}

HEALTH CARE AND ELECTRONIC BILLING

So today let's focus on the dangers of OPM and government knows best rule making in the health care industry. And how technology can be either employed as a force for good or bad, depending on how it's used, by whom, and for what purpose.

My contention is that third party payer, aka government subsidized or mandated, practices invariably lead to enormous waste. Too many OPM centric third party payer rules and regulations will bankrupt us.

Medicare Bills Rise as Records Turn Electronic is about the latest ill and unintended effects of government and the law of unintended consequences. In the end, We the People are always the ones who will pay for a well intentioned government idea gone bad, of course:

"When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.                

But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services, whether or not they provide additional care.

 

Hospitals received $1 billion more in Medicare reimbursements in 2010 than they did five years earlier, at least in part by changing the billing codes they assign to patients in emergency rooms . . . . 

 

Regulators say physicians have changed the way they bill for office visits similarly, increasing their payments by billions of dollars as well.

 

The most aggressive billing — by just 1,700 of the more than 440,000 doctors in the country — cost Medicare as much as $100 million in 2010 alone, federal regulators said in a recent report, noting that the largest share of those doctors specialized in family practice, internal medicine and emergency care. . . . 

 

For instance, the portion of patients that the emergency department at Faxton St. Luke’s Healthcare in Utica, N.Y., claimed required the highest levels of treatment — and thus higher reimbursements — rose 43 percent in 2009. That was the same year the hospital began using electronic health records.

 

The share of highest-paying claims at Baptist Hospital in Nashville climbed 82 percent in 2010, the year after it began using a software system for its emergency room records. . . . 

 

Some experts blame a substantial share of the higher payments on the increasingly widespread use of electronic health record systems. Some of these programs can automatically generate detailed patient histories, or allow doctors to cut and paste the same examination findings for multiple patients — a practice called cloning — with the click of a button or the swipe of a finger on an iPad, making it appear that the physicians conducted more thorough exams than, perhaps, they did.

 

Critics say the abuses are widespread. “It’s like doping and bicycling,” said Dr. Donald W. Simborg, who was the chairman of federal panels examining the potential for fraud with electronic systems. “Everybody knows it’s going on.”

 

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. . . . 

 

An independent analysis by The Times showed that Methodist’s Medicare billings for the highest level of emergency care jumped from 50 percent of its emergency room Medicare claims in 2006 to more than 80 percent in 2010, making the 353-bed hospital one of the country’s most frequent users of high-paying evaluation codes. . . . 

Both the Bush and Obama administrations have encouraged electronic records, arguing that they help doctors track patient care. When used properly, the records can help avoid duplicate tests and remind doctors about a possible diagnosis or treatment they had not considered. As part of the economic stimulus program in 2009, the Obama administration put into effect a Bush-era incentive program that provides tens of billions of dollars for physicians and hospitals that make the switch.

 

But some critics say an unintended consequence is the ease with which doctors and hospitals can upcode — industry parlance for seeking a higher rate of reimbursement than is justified. They say there is too little federal oversight of electronic records. . . . 

 

The Office of Inspector General is studying the link between electronic records and billing. . . . place much of the blame on the federal government for not providing more guidance. Dr. Simborg, for one, said he helped draft regulations in 2007 that would have prevented much of the abuse that now appears to be occurring. But because the government was eager to encourage doctors and hospitals to enter the electronic era, he said, those proposals have largely been ignored.

 

“What’s happening is just the problem we feared,” he said.

 

Summing Up      

 

The above is just one more example of OPM versus MOM.

 

Of government knows best elitists versus individual free market based choice.

 

Of exactly how wasteful third party payer systems are when OPM prevails and MOM is absent.

 

We The People deserve better. Why don't we demand better?

 

The government can't protect us from ourselves or even our fellow Americans who are able to 'game' the government controlled system.

 

Taking care of ourselves is the direct job of We the People, since it's our money, our country, our health care, our children's education and our "everything else" that's at stake.

 

Thanks. Bob.