Compliance Steps to Avoid APC Billing Errors

As we move into implementation of the outpatient prospective payment/ambulatory payment classifications (OPPS/APC) system, hospitals are facing mounting concern about how innocent billing errors will be viewed by Medicare intermediaries in a highly charged, compliance-focused industry.

In a June 23 letter, Inspector General June Gibbs Brown addressed concerns outlined by the American Hospital Association by assuring that under the law, hospitals are not subject to civil or criminal penalties for innocent errors, mistakes or even negligence. She goes on to offer, The governments primary enforcement tool, the civil False Claims Act (FCA), covers only offenses that are committed with actual knowledge of the falsity of the claim, reckless disregard of the truth or falsity of the claim, or deliberate ignorance of the truth or falsity of the claim. The FCA simply does not cover mistakes, errors, or negligence.

The other major civil remedy available to the federal government, the Civil Monetary Penalties Law, has exactly the same standard of proof. The Office of Inspector General (OIG) is very mindful of the difference between innocent errors and negligence (erroneous claims) on the one hand, and reckless or intentional conduct (fraudulent claims) on the other. The only recourse that will be sought by the government, according to Brown, would be the return of funds claimed in error as a solution to resolving the overpayment issue."

Although this may seem like a natural solution to natural errors, many wonder by what criteria the government will judge the difference between billing errors and deliberate intent, as there can often be only a very fine line between the two. The obvious solution would seem to be a well-established, effective compliance plan.

Many hospitals and practices have addressed the need for compliance but have failed to put in place effective tools to ensure that all compliance objectives are met. A compliance plan is a work in progress and should be the fine line needed to differentiate between obvious error and obvious intent.

To alleviate the concern associated with complying with the new APC policies, all facilities should follow the basic steps to compliance:

1. Determine the policies by which coding and billing will be evaluated as effective and ensure that all partic- ipants understand how these policies are to be followed. This requires knowledge and consensus.
2. Establish an effective auditing program that uses established policies, understood by all, as the basis for evaluation (see Self-Auditing Programs Ensure Proper APC Assignment in the May 2000 APC Alert).
3. Ensure that when coding and billing problems are identified, all concerned are notified of the error(s) and advised of the corrections. At the same time, be sure the initial policies and procedures are referenced or, if necessary, revised. As we learn more about [...]

- Published on 2000-08-01