Two-Faced Medicare Enforcement

Federal government prosecutors are sending doctors to prison for making mistakes in filing Medicare paperwork.

At the same time, Medicare customer service representatives are apparently not even reprimanded for a 96 percent error rate in answering questions about how to handle physician billings.

These representatives work at call centers operated by insurance carriers handling Medicare claims, and are tasked with providing clear and complete information about program billing requirements.

However, according to an audit conducted by the Government Accountability Office (GAO, formerly the General Accounting Office) from September 2003 to June 2004, call center reps answered only 4 percent of policy-oriented questions correctly and completely.

The call centers responded to more than 21 million inquiries in fiscal year 2003. Most of these calls were easily answered questions about the status of claims.

The huge error rate was in answering four specific policy questions about Medicare coverage and billing requirements. The questions and answers were cleared and approved by the Medicare administration before GAO employees made their calls. When they made the calls, the GAO agents identified themselves as working for the GAO and why they were calling with these questions. And the reps could use any and all of the reference materials provided them, essentially an open-book test.

This GAO report is further evidence, much lamented in this column, of the obstacles facing Medicare recipients and the physicians who serve them. The House Ways and Means Committee received the document “Call Centers Need to Improve Responses to Policy-Oriented Questions from Providers” last year. (See at GAO-04-669 http://www.gao.gov/new.items/d04669.pdf.)

Medicare paid more than $271 billion in claims in 2003. Since the program was created in 1965, its rules have swollen into more than 100,000 pages of statutes, regulations, policies and procedures that specify what the program will pay for, and under what circumstances.

No one can possibly master all the rules.

In spite of this, the law prescribes very strong penalties for “any person” defrauding Medicare. In practice, “any person” means “any doctor” and occasionally “a few insurance company executives.” All the rest, including the workers at call centers, are held accountable to much lower standards and rarely suffer severe penalties, despite what the law says.

For example, the federal government allows some insurance company intermediaries for Medicare to waste up to 6 percent in incorrectly paid claims.

As the result of an audit instigated by whistle-blower Theresa Burr about BlueCross BlueShield of Florida, the federal government found mistakes costing taxpayers $74 million – but let the company get away with them. And this is just one intermediary out of hundreds.

What is the cause of such inequity before the law?

Although the blame-the-doctors trend started decades ago, the tendency gained traction with a popularized fear of rampant “fraud and abuse” of the Medicare program – a bogeyman based on unsubstantiated estimates and no data.

This myth stampeded Congress into passing severe penalties in the Health Insurance Portability and Accountability Act (HIPAA) of 1996 (HR 3103; Public Law No: 104-191), which now requires the federal government to spend more than $1 billion every year to root out Medicare fraud and abuse.

HIPAA is part of a trend to criminalize formerly civil disputes. This law creates so many potential “criminals” and gives government so much power that prosecutors have to pick and choose who to go after, due both to the huge pool of possibly guilty folks and their inability to put everybody in jail. Fair investigation, equal protection, and just prosecution are impossible in this environment.

Justice is obviously not served by applying varying standards of perfection to call center, insurance company and medical persons, in defiance of the law.

The Medicare program is fleecing a fortune out of the U.S. taxpayers. And it’s impossible for anyone, including government consultants, to master its arcane intricacies. So let’s quit pretending that throwing doctors into prison for billing errors will stem the flow of dollars into the Medicare black hole.

We believe justice would be better served by adopting a few simple measures, among others:

• Repeal criminal penalties for unintentional Medicare billing errors.
• Allow doctors a billing error rate short of perfection, maybe the same 6 percent allowed insurance companies.
• For true fraud, raise the threshold of damages before severe penalties can be levied. Currently, any alleged insurance billing error over $100 can result in a fraud charge leading to a five-year jail term.
• Maintain the government’s burden of proof for severe penalties. Remember “innocent until proven guilty”?
• Allow jurors access to the facts and truth about everybody in the courtroom, including paid witnesses who stand to take a percentage of any fines the government collects if the accused is found guilty.

Overzealous HIPAA enforcement is making life more difficult for millions of Medicare recipients, destroying the lives of individual doctors and driving many others out of the program.

Many Medicare recipients are already having trouble finding doctors willing to accept risks of prosecution for the low payments allowed by the program. These severe HIPAA penalties are part of the problem, not part of the solution.

Editor’s Note: Robert J. Cihak wrote this week’s column.

Robert J. Cihak, M.D., is a Senior Fellow and Board Member of the Discovery Institute and a past president of the Association of American Physicians and Surgeons. Michael Arnold Glueck, M.D., is a multiple-award-winning writer who comments on medical-legal issues.