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For more than a year, the Department of Justice has been investigating hospital Medicare billing procedures. A major focus has been the so-called 72-Hour Window Rule, which prohibits hospitals from charging Medicare separately for outpatient procedures occurring within 72 hours of a hospital admission.

While many stories have already appeared in print media, including major national newspapers such as the Wall Street Journal, this story is apparently about to go to network television. The AHA has learned that NBC Nightly News, as part of its "Fleecing of America" series, has been interviewing people about the federal government's investigations into Medicare billing practices in hospitals. NBC will reportedly air the story on Wednesday, July 2. The "Fleecing of America" segment typically scrutinizes what it considers to be gross fraud or abuse, usually targeting federal programs.

We want to alert you to this story in case it is picked up by your local media. A set of talking points to help you respond is attached.

Additional detail

Because the first federal investigations began in Pennsylvania, the producers interviewed an executive from PinnacleHealth, a health system in Harrisburg. The questions did not focus on PinnacleHealth's specific billing practices. Rather, the producers addressed billing issues in general, and the need for simplification in Medicare billing. They also interviewed the U.S. Attorney General in Massachusetts.

The PinnacleHealth executive said that the health system strives for 100 percent accuracy in billing, but mistakes occur due to complex billing regulations, the number of payors, inconsistent guidelines from the insurance companies that manage the process for Medicare, inadequate software and the sheer volume of patient bills.

To address some of the complex issues around Medicare billing, the AHA will soon be announcing a service that will help you develop compliance plans for your institutions. Details to follow.

Talking Points for "Fleecing of America"/Medicare Billing

Hospitals should and will comply with any requests to clarify alleged Medicare billing errors. Hospitals have long acknowledged their billing problems and continue to make great strides toward improving their billing systems. When they are presented with a request to comply they will.

Not all inappropriate claims constitute fraud. The fact that almost 4,700 hospitals in the country are being accused of fraud may mean that the problem is not widespread fraud, but widespread confusion over Medicare rules and regulations. Sometimes inappropriate claims to Medicare and Medicaid arise, despite the best efforts of hospitals and the government. Regulators shouldn't automatically assume that an improper claim is evidence of fraud. Problems with claims can crop up for reasons having nothing to do with fraud.

Medicare and Medicaid regulations are complex and applied inconsistently. The Health Care Financing Administration (HCFA) wrote the 72-hour pre-admission rule for Medicare patients, prohibiting hospitals from charging Medicare separately for outpatient procedures occurring within 72 hours of a hospital admission. Then HCFA counted on fiscal intermediaries such as insurance companies to implement it. But not every insurance company implements the rule the same way. In addition, hospitals were expected to abide by the regulation even before the final wording had been written. That created confusion and led to incorrect and inappropriate claims.

Sometimes regulations are contrary to common sense. Some hospitals were accused in 1994 of filing inappropriate claims for using new heart catheters and other devices deemed "experimental" and therefore not eligible for Medicare reimbursement. But the new devices were often simply slight improvements over older versions of the same devices that had full approval for Medicare payment. Recognizing the problem, the Food and Drug Administration is creating a new category covering "second generation" devices, for which hospitals will be paid at the same rate as for a comparable approved device.

Hospitals want to work with the government to solve claim problems. Threatening civil or criminal prosecution is not the best way to achieve compliance with Medicare and Medicaid billing regulations, in most cases. When problems arise, constructive collaboration between hospitals and the government can almost always reach solutions that will satisfy all involved. The AHA has a long history of working with HCFA to fine-tune the Medicare and Medicaid programs.

Those who knowingly defraud the government should be punished. This applies to physicians, dentists, hospitals and any other health care provider billing Medicare or Medicaid. Those suspected of intentional fraud or false claims should be thoroughly investigated. If purposely illegal activity is proven, those responsible should be brought to justice.


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