January 2000

NYSSCPA Collaborates with Medical Society on Medicare Seminar

The NYSSCPA Health Care Committee has approved developing a new seminar in cooperation with the New York State Medical Society on compliance with Medicare billing and collection regulations for physicians and other health-care service providers.

The need for the seminar arises from investigations of Medicare billing fraud and abuse. The federal government extrapolated information from a review of approximately 1,000 cases of health-care service providers to estimate a conservative $5 billion of billing fraud and abuse. The Administration communicated this information to Congress implying that eliminating this abuse would solve the Medicare program's problems, and the Attorney General's office moved this issue to the top of its agenda, superseding organized crime. In New York, State Attorney General Eliot Spitzer called on CPAs to help uncover Medicare and Medicaid fraud when he spoke at last year's Foundation for Accounting Education Health Care Conference in August.

The CPA and medical societies share a concern about educating health-care providers on Medicare billing regulations and practices, a function for which most physicians rely on internal personnel or outside services. NYSSCPA Executive Director Louis Grumet asked the Health Care Committee, chaired by Stephen E. Golden, to determine how the two societies can collaborate to find a solution.

"A collaborative approach on this important issue has the added benefit of sending a message to the federal agencies that the professional community is proactively remedying the problem," Grumet said.

Dr. Charles Aswad, executive vice president of the medical society, said that when his organization held a program on the safe harbor regulations, the 3-to-1 ratio of accountants and business-management professionals to physicians indicated the relative awareness of and interest in the issue by the two audiences.

"This issue presents an opportunity for our two societies to serve our members on an extremely important issue, of both professional and public concern," Aswad said.

Aswad pointed out that many physicians who are aware of the problem might think, "It will never happen to me." Of the existing compliance programs, most are offered by large organizations to their own staffs, and many private consulting services are cost-prohibitive to a smaller practice. Aswad notes that New York has many small or very small (25 or fewer physicians) health-care organizations, at least partly because some New York laws make corporate practice difficult.

Aswad reported that in New York state, a government task force will select approximately 500 physicians for investigation of suspected fraud or abuse. Already, some investigations of billing-errors cases have involved SWAT-team-like invasions of physicians' offices. If the investigators find significant fraud among initial targets, they may keep going. Aswad also reported that an Association for the Advancement of Retired People program awards $1,000 to Medicare patients who report fraudulent billings by physicians or hospitals.

A physician under investigation could find cases reviewed going back eight years, with investigators extrapolating fraud or abuse based on a relatively small number of cases. The federal government requires every office to have a compliance manual, but the manual's existence can be used against the physician if not applied thoroughly. However, Aswad said that billing errors can easily rise to the level of fraud or abuse because more than 100,000 pages of regulations exist--many of which are inconsistent or burdensome (for instance, each Medicare bill requires 19 separate pieces of information).

If a physician challenges the findings, investigators could decide to scrutinize virtually everything in the history of the practice, the costs of which (including negative publicity), even if the physician is eventually cleared, could put the physician out of business. The case of a physician who negotiates and agrees on a settlement for recovery and penalties would remain open for further investigation.

Finding a Joint Solution

NYSSCPA Health Care Committee members volunteered to work with the New York State Medical Society to develop what will tentatively be a half-day to full-day seminar that may be videotaped for a wider audience. The planned joint-venture seminar may include showing clients how to develop and implement a detailed, written billing program that includes an annual coding review to determine an error rate.

Possible locations for early presentations include the metropolitan area, Albany (also a site of the Health Care Committee's annual conference in August), and the Buffalo/Rochester area. *