Medicare, With a Grain of Salt

June 1, 2005

The lesson: when it comes to collecting from Medicare (and other payers), it pays to question the status quo.

When your practice receives a stack of denied claims from Medicare, do you just take them at face value? Who wants to argue with Medicare, after all? But it's fair to argue that the government and private payers seem sometimes to overscrutinize claims - and that many of their findings are flawed and unsubstantiated. Seemingly innocent conduct - an honest oversight - is often labeled as fraud.

The lesson? When it comes to collecting from Medicare (and other payers), it pays to question the status quo. Want proof? Which of the following - all common reasons payers use to deny claims - is true?

  • If it wasn't documented, it wasn't done. (How many times have you heard that one?)
  • All clinic notes must be signed.
  • You must bill exactly the same charge to all patients who receive a particular service.
  • Nurse practitioners and physician assistants can't bill for high-level visits.
  • The carrier has complete legal authority to determine whether a service is medically necessary.

You may be surprised that none of these statements is accurate. Instead, they reflect conventional wisdom that is so widespread, and so frequently repeated, that everyone assumes it must be "the law." As a physician who deserves to be paid, you've got to be a cynic - know how to separate reality from myth.

Be a cynic

The current emphasis on regulatory compliance has created a whole industry of lawyers, consultants, and other folks who are happy to tell you what you can and can't do. Given the complexity of the rules, and the fact that you must also stay current with clinical developments, you're likely to seek guidance from outside experts. But keep in mind that any source of information - trade associations, magazines, and even Medicare carriers - can make mistakes. Case in point: Recently, government staff placed test calls to Medicare help lines to find out the quality of the "help" being given. One caller asked about the coverage for power wheelchairs. The Medicare "professional" on the other end of the line explained that the chair was covered if the patient had poor trunk strength - which she said meant that the patient needed to have the right size automobile trunk!

The bottom line: always be skeptical. Whenever you seek advice about a Medicare billing issue, ask for a citation to the underlying rule. If Medicare actually prohibits a particular practice, it should be able to cite the relevant rule.

And even written rules are not necessarily valid. To get to the truth, you need to understand the hierarchy of authority in Medicare. The Medicare statute is the ultimate, controlling rule. The regulations interpret the statute. When something in a rule or policy contradicts a higher legal authority, the rule or policy is invalid. For example, while carriers have authority to create some policies, their authority is quite limited, and they frequently publish policies that exceed their authority. Therefore, if a carrier takes a position that is unreasonable, you can, and should, challenge it.

Government publications like the Medicare Claims Processing Manual and Medicare Beneficiary Manual (formerly the Medicare Carriers Manual) are published by CMS/HCFA to help Medicare carriers interpret the law (they can also give physicians a leg up in understanding what the government is telling carriers). These manuals do not contain laws, but they can be useful for understanding Medicare policy. Finally, publications by individual Medicare carriers contain local policies.

The documentation debate

Back to that short list of "untruths." What about that one, "If it isn't documented, it wasn't done"? Perhaps the single largest myth is that when a chart fails to comply with Medicare's documentation guidelines it is fraud to bill for the service. It is certainly true that many experts, including health lawyers and consultants, act as though the Evaluation and Management Documentation Guidelines are law. But official publications from CMS/HCFA indicate otherwise.

In 1995, when CMS/HCFA first issued the Documentation Guidelines, they issued a question and answer sheet that asked, "Are the Documentation Guidelines required?" The answer: "No." The memo went on to explain that if Medicare conducts a review and determines that documentation is lacking, the carrier is supposed to request additional information from the physician to determine whether the services were rendered. In short, the memo indicates that you determine the code based on the level of the service provided by the medical professional, not by the amount of documentation.

Most Medicare carriers ignore this memo, instead relying on a statute that says, "No payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider." Carriers typically claim that this requires you to document information in the medical record. But that statute doesn't mention the word documentation, nor does it mention a medical record; it only requires that you furnish information necessary to demonstrate what you have done. You can comply with that statute if you can support the code you selected through testimony, a letter, or other information that supplements the information available in the medical record.

I don't mean to suggest that documentation is unimportant. Ideally, it should reflect all of the work done for a patient. However, legally, if the documentation does not support the code billed, but you are comfortable that the service was provided as coded, there is a strong argument that you need not downcode the Medicare claim to match the documentation. But you should know that there is a risk that in the event of an audit, you may be unable to demonstrate the service was provided.

If the documentation is deficient, it is going to be much more difficult to prove that the services were delivered. If the documentation is lacking, you have to convince a hearing officer that the services were really provided - a significant uphill battle that will cost you time and money. From a risk-management perspective, it is foolish to allow a significant number of claims to be submitted without documentation in the record. However, just because it is prudent to have your documentation satisfy the guidelines does not mean that it is fraud to fail to meet the guidelines.

Sign here ...

Many Medicare carriers will deny claims if the physician's documentation is not signed. While there are some federal regulations that require hospitals to make sure that hospital charts are signed, there is no comparable federal requirement for clinics. Admittedly, it is probably advisable to sign your charts, but failure to do so shouldn't permit the government to recoup money for the work you provided.

Same service, same fee?


While it is widely believed that Medicare prohibits physicians from charging any patient less than the amount paid on the Medicare fee schedule, the actual rule is quite different. Medicare will pay the lower of the physician's actual charges, the fee schedule amount, or the physician's usual and customary charge (defined as the median charge, where exactly half of the patients pay more and half pay less). In other words, as long as at least half of your patients pay as much or more than the Medicare fee schedule amount, it is perfectly permissible for you to provide a discount - unless the discount can be construed as a kickback.

Higher levels for NPs, PAs

Do you buy into the myth that an NP or PA is not permitted to bill for a high-level service? The argument generally goes that NPs and PAs are not permitted to do high-complexity medical decision-making, and therefore billing for a high-level code is impossible. The complexity of decision-making issue is really a question of state law, but at least for established patients, an NP or PA can bill for a high-level service if the history and exam are detailed or comprehensive. For established patients, the level of service is determined by the highest two of the three key components. If the history and exam support a high-level code, no medical decision-making is necessary to justify the bill.

Medical necessity is your call

Fortunately, Medicare's ability to challenge the medical necessity of treatment is limited. There is a well-established concept called the "treating physician rule" that says if a treating physician makes a well-reasoned judgment about the patient's condition, Medicare should cover the service. According to its manuals, if the Medicare carrier uses a physician to review the claim, that suggests the issue is ambiguous enough that the carrier should not attempt to recoup money in the case. This gives physicians a strong basis for challenging alleged overpayments.

In short, the next time Medicare (or other payers) denies your claims, dig deeper. Ask for the underlying rule or authority. This is the best way to determine whether the information you are receiving is true, or whether it is some widely repeated and accepted "law" that is, in fact, a bogus barrier to your getting paid. Fight the good fight.

David M. Glaser, JD, is an attorney in the health law group of Minneapolis-based Fredrickson and Byron. He has experience
in healthcare regulation and litigation,
including compliance, criminal and civil fraud investigations, and reimbursement disputes. He can be reached at dglaser@fredlaw.com
or editor@physicianspractice.com.

This article originally appeared in the June 2005 issue of Physicians Practice.