Phone: 1-800-624-8832 | Email: hsms.support@henryschein.com | Help Center
Blog
Sep 11

Billing Errors & Omissions – Covering Your Risks

Every day, physicians and clinicians across our country go about the tremendously valuable task of caring for patients and clients that are injured, sick, or in need of some type of medical or clinical care. The “work” for most physicians, nurses, paramedics, and medical professionals in general is most often far more than a job, but a calling – and with that goes the rewards and the risks of having the well-being of the population in their hands.

Beyond those providing actual patient and client care are the multitude of professionals that work in the business side of the healthcare industry. Medical technologies, analysts, billing and coding organizations, insurance companies, governmental agencies – the list goes on. And all these professionals, from the clinical to the business side, are responsible not only for the inherent “risks” of caring for individuals in their daily activities, but the risks that have become increasingly documented in news outlets regarding the financial side of healthcare.

How do you protect your practice or your organization? The most effective means for physician groups and billing agencies is by enacting and enforcing a strict compliance program with regards to billings (including admissions and care provided as coded) and maintaining thorough and meticulous records supporting every aspect of billing. Regular internal audits and periodic third-party audits of billing practices can help discover any issues for immediate correction and are also routinely included in any good compliance program. And then there are Professional Liability policies that tend to cover medical mal-practice.
But the issue covered in this paper is the fact that even with these types of compliance practices and Professional Liability policies in place, another significant risk is frequently left exposed – that is the regulatory fines and penalties and the consequent defense costs resulting from actual or alleged billing errors.
In 2016 and 2017 respectively, the healthcare industry represented $2.4 billion and $2.5 billion in civil settlements. Given the high-profile nature of fines and penalties associated with erroneous medical billing, here are some key factors in considering whether an address of this risk by your practice, clinical or business in nature, is worthy of a hard look:

  • Professional Liability policies exclude Errors & Omissions coverage, yet this potential for very expensive claims is present.
  • Increased enforcement of the False Claims Act in recent years has highlighted the need for the coverage.
  • There is no requirement of actual intent to defraud the government for liability to be established.

What are the coverage triggers? Medicare/Medicaid billing investigations, False Claims Act investigations, Qui Tam suits (whistleblower), Stark or Anti-kickback violations, HIPPA Proceedings, and EMTALA Proceedings to name some of the largest. Government agencies and private insurance payers are stepping up their efforts to recover for billing errors. The allegations can be brought by Government agencies thru the False Claims Act (FCA) for Medicare or Medicaid billing errors as well as private insurance carriers or by qui tam plaintiff (whistleblower). The penalties are quite steep, being treble damages, plus $10,781 – $21,563 per claim penalty. That is per claim, not per resident/patient and can really add up quickly. Defense costs alone are costing on average $80,000 just to defend these suits.

And it is not just the Government that is going after billings errors; it’s also outside contractors through the Recovery Audit Contractors (RAC) program. These RAC auditors are incentivized to uncover overbillings, and their compensation on average is 10% of and discovered and proven overbillings. These contractors are given access to billing data, and they constantly monitor and audit this data, looking for red flags or potential false claims.

The percentage of settlements due to the government initiated and other non-qui-tam suits continues to increase, and the sitting US Attorney General has pledged to make investigating False Claims Act violations a priority for the Department of Justice

Many clinical practices continue to deem purchasing Billing E&O coverage for these types of potential audits as unnecessary. Some say it’s because they are small organizations; others say it’s because they outsource their billing to a third party. For whatever reason, these practices assume they are not at risk of being audited, even given the additional regulatory exposures. However, as pointed out earlier, scores of recent claims and the resulting highly publicized fines and penalties have shown that this is not the case, and the exposure is broader than generally recognized. As a result, it is our strong recommendation that you talk to your business partners about this vital issue and protect your practice accordingly.

Interested in learning how Alveo helps its clients on this key issue of E&O coverage? Let’s talk. We provide clients with tailored business solutions that simplify workflow, minimize operating costs, and maximize reimbursements within and adjacent to the claims clearinghouse space. Our services include patient eligibility verification, claims processing, remittance advice, patient statements, patient payment portal, customized reporting and analytics, and a set of unique services that enable the broad success of our clients. Through our connections with more than 4,000 payers, we process more than $1.2 billion claims each month with a 98 percent annual client retention rate.

Return to the eNotes home page →

 

Do you know about the Help Center?

The MicroMD Help Center features a full functioning ticketing system where you can track your support requests and more!

Visit Help Center

Have you seen our NEW blog?

blogMD features articles on regulatory issues in the healthcare industry, patient related topics and urgent care business.

Visit blogMD

About The Author

Leave a reply

Your email address will not be published. Required fields are marked *