Medicare Compliance & Reimbursement

A False Claims Act case is on shaky ground when on one is clear on coding rules.

Using the wrong code when billing Medicare for medical equipment isn't a de facto violation of the False Claims Act - even when the code pays more than what the feds maintain is the proper code.

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

That's the upshot of a recent court ruling from the U.S. District Court for the Northern District of Texas. The ruling stems from a whistleblower suit that accuses Fort Worth, TX-based supplier Medica-Rents Co. of overbilling Medicare between 1994 and 1996 for a support surface it rented called 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. The problem: No one seemed to know. To make it worse, no one even knew who had the authority to decide: the Centers for Medicare & Medicaid Services, the durable medical equipment regional carriers or the 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 writes in his opinion - but 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.

"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 in U.S. v. Medica-Rents (No. 4:00-CV-483-Y, Northern District of Texas).

"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 continued. The company's "behavior does not demonstrate that Medica-Rents knew it could not bill under code E0277."