Home Health & Hospice Week

How faulty advice from the government cleared one supplier. 

Documenting the billing advice you receive from Medicare contractors - or lack thereof - can pay off big in the event of an investigation.

One Texas supplier has learned that lesson in a case centering on coding confusion.

A recent court ruling from the U.S. District Court for the Northern District of Texas found that using the wrong code when billing Medicare for medical equipment isn't a de facto violation of the False Claims Act, even if the code pays more than the correct one.

The key is whether proper instructions are issued to contractors, providers and suppliers on how to bill for a particular item.

The ruling stems from a whistleblower suit that accuses Fort Worth-based supplier Medica-Rents Co. of overbilling Medicare between 1994 and 1996 for a support surface it rented, a ROHO Mattress Overlay. In particular, the case centered on what HCPCS code should have been used for the ROHO Mattress Overlay: E0197, E1399, the higher-paying E0277 or some other code.

Authorities Play Hot Potato With Coding Question 

The problem: No one seemed to know. To make matters worse, no one even knew who had the authority to decide: the Centers for Medicare & Medicaid Services (then known as the Health Care Financing Administration), the durable medical equipment regional carriers or the then-newly minted statistical analysis DMERCs.

Medica-Rents did everything it could to get to the bottom of the matter, asking questions in various venues, U.S. District Judge Terry Means points out in his opinion - to no avail. But the government can't twist its own confusion on the issue into False Claims Act charges against a health care organization that was victimized by that confusion, the ruling suggests.

"The defendants were involved with the Medicare program at a time when it was undergoing major transition. Under the facts of this case, the Court cannot fathom how anyone, including the defendants, could possibly have understood all the changes that were taking place and which department or division was responsible for making what decisions," Means ruled.

"While there is evidence that Medica-Rents aggressively sought to maximize its profits by obtaining the greatest amount it could from Medicare when billing for the ROHO Mattress Overlay, that is to be expected from a for-profit," Means continues. The company's "behavior does not demonstrate that Medica-Rents knew it could not bill under code E0277."

In U.S. v. Medica-Rents (No. 4:00-CV-483-Y, Northern District of Texas) Medica-Rents was able to show it made its best efforts to deal with an unbelievably complicated system - and thus was able to defeat the government's False Claims Act allegations against it.