There once was a time when fraud referred to intentional, devious inaccuracies to cheat or deceive, but the government has rewritten the definition for health care. In the interest of controlling Medicare spending, regulatory committees have nearly dropped any distinction between deception and honest mistakes. Physicians who make unintentional coding errors can be liable for fraud charges, enormous fines, and even prison time.

Early this year, HealthHelp, a radiology management services organization, performed a statistical study that analyzed claims for two large HMOs. The data compilation and analysis allowed for comparisons between payor-specific reports from different plans for benchmarking purposes. These reports were evaluated through a systematic process in coordination with quality assurance programs.

More than 1 million member months of claims data from two HMOs’ claims for capitated members in Florida were examined. Although the initial purpose of the study was to take an in-depth look at duplicate abdominal procedures performed on the same patient on the same date of service in order to measure the appropriateness of care, the data revealed a surprising number of coding discrepancies.

A diagnostic imaging charge is divided into two components: one technical, one professional. The technical component reimburses for the use of equipment, and the professional component reimburses the radiologist for the diagnosis. Billing both components together is referred to as global billing. If billed separately, the professional and technical components should match; for example, the same patient on the same date of service should have the same procedure done and the same Current Procedural Terminology (CPT) code billed. The data analysis demonstrated that this is not always the case: 38% of claims did not have an identical companion claim.

The research revealed that errors were not situation-specific: billing mistakes were seen in numerous practices and in relation to several types of scans. The research identified a total of 237 screening mammograms (CPT Code 76092) billed by the radiologist reading the film with an accompanying facility or hospital bill for a diagnostic mammogram (CPT code 76091) (see Figure 1). However, reviewing the medical record revealed that 96% of the time the study performed was a screening mammogram. In looking at abdominal ultrasound examinations, different CPT codes were often submitted for the same examination done on the same patient on the same day. The professional component billed a limited retroperitoneal ultrasound (CPT code 76775), while the facility or hospital billed a complete retroperitoneal ultrasound (CPT code 76770) (see Figure 2). The International Classification of Diseases (ICD)-9 code submitted supported the limited studies 71% of the time. In addition, MRI images of the extremities were often submitted with a joint (73721) versus without a joint (73720) (see Figure 3). Another example, with greater economic impact per examination, is a CT of the head examination submitted with contrast versus without contrast (see Figure 4).

As mentioned above, physicians should worry about more than their integrity in light of such discrepancies. The government crackdown on Medicare fraud continues to escalate, and doctors are liable now more than ever for intentional and unintentional errors. Physicians are being criminally charged for discrepancies in record numbers: from 1993 to 1997, prosecutions have tripled, and the conviction rate has risen from 73% to 87%. Civil cases for fraud have also risen exponentially: the number of health care cases pending in the US Attorney’s Office has risen from 1,406 in 1995 to 4,010 in 1997.1

Inaction will reap dire consequences, as even the most innocent mistake can be met with serious reprimands by the government regulatory agencies that patrol for fraud. Physicians should seek out rigorous quality assurance programs and intensive continuing medical education classes and seminars in order to keep abreast of changes in the health care system and of studies that statistically examine problems and recommend solutions.

Physicians are well advised to approach their practices’ billing with a critical eye. Physicians too often let their billing departments handle all coding and billing issues, and too often they allow this without periodically monitoring these departments for accuracy. If an employee miscodes a procedure for 6 months on end, the physician could be liable. Physicians must monitor their billing departments and must ensure that their employees are up to date on all new developments in coding and billing procedure. Physicians must pass on pertinent elements from their continuing medical education to their employees. Practices are made up of a team of employees working together, and one part of the team will not be able to function appropriately if poorly informed. When one part falters, the entire team is faulted, not just the uninformed individual or department.

The current health care market demands that physicians wear multiple hats. Today’s physicians must not only practice medicine; they must attentively practice business. Even the smallest, unintentional billing errors can bring swift governmental action under charges of Medicare fraud.


Robin L. Smith, MD, MBA, is chief medical officer and executive vice president, Wendi Schlegel is a health care analyst, and Joe McCarthy, RT, is regional director of utilization management for HealthHelp Inc, Houston