Pediatric Coding Alert

Tighten up your practice’s compliance plan to ensure audit success.

State Medicaid providers have stepped up their audits, prompting pediatric practices to remain vigilant and button up their documentation and recordkeeping. If you’d like some insight into the types of cases being prosecuted this year, we’ve got the details of three fraud reports that were brought to light in 2015 which can help you determine what not to do if you’d like to avoid fraud.

1. Employee Not Licensed

A Maryland pediatric practice is in hot water after its physician’s assistant was found to have no medical license. She had already diagnosed and treated 137 patients and wrote over 400 prescriptions before being discovered—she now has to pay over $53,000 in restitution, including $19,000 she billed to Medicaid.

Because the employee already knew the pediatrician, the doctor trusted her to provide documentation of her license and DEA certification after she was already hired. The “proof” she later provided were forged, as was her diploma. Therefore, the services she administered to children—including newborn visits and physicals—were done fraudulently.

The takeaway: Don’t relax your hiring standards for anyone, even if you have previously worked with the new employee in another setting. You should ensure that your new hires are appropriately licensed and credentialed, that they’re contracted with your insurers, and that they haven’t been excluded from any payers, including Medicaid.

When evaluating employees’ licensure status, also review multiple databases and cross-reference the information against your state licensure database as well as the OIG’s excluded provider database. 

You can also investigate software solutions that provide real-time tracking of employees’ licensure status. For example, Medversant Technologies has a software product that tracks employees’ status in real time. The system looks for discrepancies between background information reported by the employee’s record and outside databases.

If the software program finds a problem, the system will alert anyone the organization wants alerted, including the administration and/or the employee himself. The software monitors license information, DEA certification, HHS Office of Inspector General and federal sanctions, criminal complaints, as well as malpractice complaints reportable to state or federal databases.

If you detect an employee practicing without an active license, you should immediately stop the person from providing care within the organization. At that point, anything the unlicensed care provider does subjects the practice to increased liability for negligent credentialing -- and obviously for payment recovery from payment sources.

2. Procedures Not Performed

A New Jersey-based pediatrician faces up to ten years in prison after pleading guilty to collecting over $196,911 from Medicaid for wound care procedures that he never actually performed. The physician submitted the codes for wound repair related to superficial wounds over 30 cm in length to a patient’s face, and also billed for repairing wounds that were already closed.

The takeaway: Always cross-check any codes billed against the documentation. If it isn’t in the record, you cannot report the services. In this case, the offending pediatrician would have easily been discovered if the practice had performed semiannual audits, so ensure that your practice is on an appropriate audit schedule to catch any such issues.

You can either perform a prospective audit (in which your practice examines new claims before you file them) or a retrospective audit (when your practice examines paid claims). A prospective audit helps you identify and correct problems before sending the claim, which could mean you’ll discover incorrect coding or charges that would otherwise have been missed. Keep in mind that this type of chart audit can potentially delay billing, however.

Retrospective chart audits do not delay billing, but causes your office to be reactive by refiling claims, rather than proactive in finding problems before you submit the claim.

Best bet: Your practice must determine for itself what types of audits your staff can reasonably complete and what effects on claim submission timing and cash flow the practice can handle.

3. Accepting Kickbacks for Services

A Michigan pharmacist will spend a year in prison after offering kickbacks to physicians in exchange for prescriptions that they wrote to him for items like codeine cough syrup. The pharmacist also paid kickbacks to patients so he could bill their Medicaid payers for the drugs, which he then distributed illegally. 

The takeaway: Kickbacks may not always be so obvious as accepting cash in exchange for prescriptions and referrals. The rule also applies to cash equivalents such as gift certificates and gift cards too.

This year, the Stark Law limits gifts to referring physicians at a value of $392, which is an annual cap, so make sure the total of all gifts for the year does not exceed this amount for 2015.