Residents’ Corner is a new column on topics of particular interest to neurosurgical residents. This is part I of a two-part series on regulatory bodies.
Medicine is such an extensively regulated “industry” that each one of the thousands of regulatory requirements placed on physicians could be the topic of a weeklong course or a 500-page treatise. Complying with the over 132,000 pages of Medicare and Medicaid regulations alone is enough to make a neurosurgical resident wonder whether to make a career change before you even bill for your first medical service, especially when you are expected to comply with these regulations at significantly reduced reimbursement (relative to past years) while under threat of criminal prosecution. But since you have endeavored to enter into this noble profession for more than pecuniary reasons, this column’s goal is to help give you an idea of the regulatory system in which you will ultimately practice.
Basics of Medicare, Medicaid
Medicare is the federal government’s health care system for senior citizens and certain disabled persons. Medicare is often confused with Medicaid. Medicare serves primarily persons age 65 and older; Medicaid is a medical assistance program for certain low-income persons. The federal government solely administers Medicare; Medicaid is a joint state-federal program.
Medicare enrollees can receive benefits through either the federally administered fee-for-service program, or Medicare +Choice private health plans (managed care). Fee-for-service benefits are provided in two parts: Part A, the Hospital Insurance Program (HI), which includes coverage of hospitalization, skilled nursing facilities and hospice care; and Part B, the Supplementary Medical Insurance Program (SMI), which covers physician services, clinical laboratory services, outpatient hospital services and durable medical equipment.
Virtually all Medicare services are paid under some kind of fee schedule. The physician fee schedule is based on a system known as the Resource Based Relative Value Scale or RBRVS. Under this system, physician payments are divided into three separate components: physician work, practice expense and malpractice expense. Relative values or RVUs are developed for the work component for each physician service based on the time and intensity of each service. The RVUs for practice and malpractice expenses are ostensibly based on the actual costs of those items.
Generally, the longer it takes to perform a service the higher the relative value and vice versa. Each component is further adjusted to account for geographic differentials in the costs of physician services. Finally, the RVUs for each component are then added together and multiplied by a national dollar conversion factor to arrive at the fee Medicare will pay for a given service.
Medicare makes changes to the RVUs and conversion factor annually, so payments for physician services always fluctuate from year to year. Since the implementation of the RBRVS system in 1992, neurosurgical fees have steadily declined. This is due to two principal factors: the system is budget neutral and policy makers want to increase payments to primary care physicians and decrease payments to surgeons and other hospital-based specialists.
Compliance is Problematic Medicare and Medicaid are administered by the Health Care Financing Administration (HCFA), which is the largest health insurer in the nation, covering some 74 million Americans. HCFA will pay about $368 billion for health care services this year. Expenditures for neurosurgical services (physician component only) are only approximately $325 million annually.
The Medicare and Medicaid programs account for nearly 18 percent of the federal budget. Given the size of these programs, it is no wonder that the government wants to ensure that it pays only for appropriate services. The Medicare program auditor, namely, the Department of Health and Human Services Office of Inspector Generral (OIG), continues to uncover billions of dollars in improper Medicare fee-for-service payments each year.
Improper payments can range from inadvertent mistakes to outright fraud and abuse, yet the OIG treats all of these errors the same-with intimidation and large financial penalties. The OIG has six general categories of improper payments: (1) lack of medical necessity, (2) incorrect coding, (3) insufficient documentation, (4) no documentation, (5) non-covered or not allowable and (6) all other errors.
Unfortunately, in its zeal to monitor and control Medicare and Medicaid expenditures, HCFA (and in some cases Congress) has created such a complicated, burdensome system that it is nearly impossible for the physician to understand, let alone comply with, all of these regulations. Add to this the threat of civil and criminal prosecution and the impact of the regulators becomes even more pervasive.
Further complicating the matter is the fact that all of these laws, rules and regulations are administered and enforced by the large number of players involved in the health deliver system: Congress, federal and state courts, various agencies within the Department of Health and Human Services (HCFA, OIG, Food and Drug Administration, Health Resources and Services Administration), the Department of Justice, the Internal Revenue Service, the Department of Defense, the Department of Education, the Department of Labor, the Department of Veterans Affairs, the Federal Trade Commission and state licensing boards.
Danger Areas for Neurosurgeons
It is important to highlight the regulations that have the greatest potential of placing neurosurgeons at risk of violating governmental regulations, which could result in substantial fines, and in rare cases, prison.
Over the past several years, the OIG has found that incorrect coding or a lack of documentation of Evaluation and Management services (primarily office and hospital visits and consultations) account for billions of dollars of the total improper Medicare payments each year. The HCFA is revising the documentation guidelines (DG) that accompany the E & M services. The revised DG will not likely be implemented until some time in 2002.
Physicians can currently use one of two DG systems, which were released in 1995 and 1997. The principal differences between the two versions are that the 1995 DG contain requirements for general multisystem exams, which are inadequate to account for E&M services provided by specialists such as neurosurgeons, and the 1997 DG incorporate single-system exams (for example, for musculoskeletal and neurologic exams), making them a bit more useful for specialists. The medical community has criticized both as cumbersome to use and as inaccurately reflecting clinical practice.
However the DG are revised, neurosurgeons need to document the following elements of an E&M service: (1) chief complaint, history of present illness, review of systems, and past, family, and social history, (2) physical examination and (3) medical decision making. Within each of these three components there are five different levels of service ranging from low to high complexity. Of course, the more complex the E&M service provided the higher the reimbursement. Government auditors believe that because of this increase in reimbursement, there is a significant amount of intentional “up-coding.” Neurosurgeons must take extra care to ensure they are providing the appropriate level of service and documenting it accordingly.
Another E&M issue is the difference between new patients and consultations. Neurosurgeons typically use consultative codes more often than primary care physicians do. Identification of a consultation requires several components. First, a physician must request your service. Second, there must be written documentation of this request and it must be described as a “request for consultation” rather than a “referral.” Finally, the findings and recommendations from the consultatiion must be communicated back to the requesting physician in the form of a chart note.
Unbundling and the CCI Edits
Neurosurgeons must pay close attention to the inappropriate unbundling of services. “Unbundling” refers to coding additional procedures that are considered integral components of a “primary” procedure code. As HCFA sees it, unbundling means that the government is paying more than once for essentially one complete service. To combat this practice, several years ago HCFA implemented the Correct Coding Initiative (CCI), which has led to the development of software that can detect and preclude payment for unbundled codes.
Also note that all major surgeries have a 90-day “global period,” which includes nearly all the post-operative and follow-up visits in a single surgical fee. Other than in limited circumstances, therefore, neurosurgeons may not bill separately for hospital and office visits associated with the surgical procedure, as this would be inappropriate “unbundling.”
EMTALA
The Emergency Medical Treatment and Active Labor Act (EMTALA) is the federal “anti-dumping” law enacted by Congress in 1986 to ensure that patients who come to hospitals for treatment of an emergency condition are not turned away or transferred to another facility because of inability to pay. It applies to any patient who seeks care, whether the patient’s access is through the ER or any other department of the hospital or hospital-owned facility. The mandates of this law apply to on-call physicians as well. Therefore, it is critical that neurosurgeons understand the requirements of EMTALA. Physicians can be fined as much as $50,000 for violating EMTALA.
To be compliant with EMTALA, on-call physicians must do, among other things, the following:
- On-call physicians must respond to the hospital in a timely manner when requested to attend to patients and must complete a medical screening examination or provide stabilizing care. HCFA has not set a specific rule for response time, but officials have mentioned 30 minutes.
- On-call physicians, who may be on-call at another hospital simultaneously, must not request that a patient be transferred to a second hospital for the physician’s convenience.
- On-call physicians who, as part of their routine responsibilities, are charged with the duty to accept patients transferred from other facilities may not refuse any unstable transfer as long as their hospital has the capability and capacity to provide treatment.
- Physicians whose names appear on the on-call list are responsible for finding a suitable replacement if they cannot be available for duty and are responsible for updating the on-call list with the replacement physician’s name and other appropriate information.
Katie O. Orrico, JD, is director of the AANS/CNS Washington, D.C. Office.