Government shares the blame on Medicare upcoding, hospitals say

Associations respond to HHS, DOJ warning on upcoding

Several organizations over the past couple days responded to federal officials' warnings against using electronic health record (EHR) systems for "upcoding," which occurs when hospitals select higher-paying treatment codes to inflate medical bills.


On Monday, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius sent a strongly worded letter to hospital groups warning that the Obama administration will not tolerate hospitals' attempts to "game the system" by using EHR systems to boost Medicare and Medicaid payments.

The letter stated that there is evidence that hospitals are using EHR systems to facilitate upcoding. A recent Center for Public Integrity investigation, as well as a New York Times analysis, found that EHR systems could be contributing to a rise in upcoding.

AHA response

In response to federal officials' warnings about upcoding, American Hospital Association (AHA) President Rich Umbdenstock sent a letter urging CMS to offer better guidance on navigating complex rules and arguing that "duplicative" federal audits divert resources away from patient care.

However, he added, "We agree that the alleged practices described in your letter, such as so-called 'cloning' of medical records and 'upcoding' of the intensity of care, should not be tolerated."

AAHC response

On Tuesday, Steven Wartman—president and CEO of the Association of Academic Health Centers (AAHC)—sent a response letter to HHS and the Department of Justice stating that the health care industry lacks adequate guidance on billing for some of the most common medical services. AAHC said that hospitals have requested such information from federal agencies to no avail.

Wartman wrote that hospitals' concerns "have only been exacerbated by the increased uptake of electronic health records and the rapid changes in the delivery system necessary to accommodate more sophisticated technology."

AAMC response

In a statement provided to Politico, the Association of American Medical Colleges (AAMC) responded to federal officials' letter by saying that its members have "robust compliance programs" to combat health care fraud.

AAMC in the emailed statement wrote, "Because most Medicare billing rules were written with paper records in mind, the AAMC believes that they would benefit from review and revision to reflect the particular compliance challenges posed by electronic records."

AHIMA response

Sue Bowman—senior director of coding policy and compliance at the American Health Information Management Association (AHIMA)—responded to federal officials' letter by saying that cutting and pasting data into EHRs is not problematic as long as the practice is monitored.

She said, "We recommend that hospitals develop standards for appropriate use of cut-and-pasting and then develop procedures to monitor use to make sure the policies are being followed."

FAH response

On Tuesday, Charles Kahn—president and CEO of the Federation of American Hospitalssent a letter to Sebelius and Holder stating that there is no place for inappropriate coding or cloning of EHR data to obtain higher reimbursements.

However, Kahn added that "any changes in coding reflect the fact that EHRs are enabling the development of more complete data sets regarding patient care and that these changes generally do not represent instances of inappropriate coding as suggested in your letter."

NAPH response

The National Association of Public Hospitals and Health Systems in a statement to Politico said, "Our hospitals and health systems adhere to high ethical standards and reject practices that might result in fraudulent or other improper claims."

The association added, "We stand ready to help regulators understand fully the many aspects of [EHR] use in the hospital setting as they consider actions to ensure proper billing practices" (Norman/Millman, Politico, 9/26; Miliard, Healthcare IT News, 9/26; Carlson, Modern Healthcare, 9/25 [subscription required]; FAH letter, 9/25).

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