GAO dashes hopes for PATH lawsuit relief

A new GAO report has dashed hopes that teaching hospitals will see an end to PATH investigations any time soon. Despite criticism that hospitals were blindsided by shifting and unclear rules on teaching physicians, Congress’ investigative arm has found that OIG is justified in its crackdown.

"HHS’ OIG, in our opinion, does have a legal basis for applying the specific criteria used in the PATH [Physicians at Teaching Hospitals] initiative," concludes the report. "The fact that a physical presence requirement has not always been consistently communicated or enforced does not obviate the need for teaching physicians to document their personal involvement in services to legitimately bill Medicare."

And while GAO acknowledges that clear guidance for documenting evaluation and management (E&M) coding was not effective until 1996, the codes have been defined and instructions on their use have been available since 1992, the agency says.

Yet if PATH’s legal basis is sound, its scope may not be. OIG’s audit of Dartmouth-Hitchcock Medical Center "raises questions about the OIG’s original intent to audit all major teaching hospitals," says the study. (See related story on the DHMC audit in the Feb. 9, 1998 issue of CH.)

The audit, which took 10 months and cost the hospital $1.7 million in direct and indirect costs, "was initiated with little indication that the institution was improperly billing Medicare." Auditors found a total of $778 in billing errors. Ironically, OIG had been warned by DOJ that Dartmouth had an excellent billing system, but OIG decided "that since they intended to audit every major teaching institution in their region, it made little difference to them which ones were done first," according to GAO.

Although OIG has backed away from its initial pledge to audit all 125 major teaching hospitals in the country, GAO argues that a "risk-based approach focusing on the most problem-prone institutions would be a more efficient use of these resources."

GAO also questions the severity of what the government saw as violations of teaching regulations. Though concluding that violations had occurred at the Philadelphia-based University of Pennsylvania and Thomas Jefferson, whose combined settlements totaled $42 million, GAO found that audit records did not support the OIG’s assertion that teaching doctors had billed for days when they didn’t work.

Audit work papers indicate that doctors may have been present when residents performed services, even if they didn’t always document their presence. Similarly, GAO disputes the widespread and multi-level upcoding that OIG found at the two Philadelphia schools. "At one of these institutions, not only were few multi-level errors found by the OIG, but one physician accounted for about 70% of these multi-level errors," says the report. Though a multi-level discrepancy in E&M coding, say from a Level Three to a Level Five, might indicate abuse, a one-level difference might just be a legitimate difference in medical judgement.

GAO didn’t directly criticize the Justice Department’s extrapolation of one year’s audit sample over five or six years. But the agency does conclude that if the investigations of Thomas Jefferson and the University of Pennsylvania had gone to court, "the extrapolations could have been challenged on the basis that they were not statistically sound."

Yet in the end, all these problems may be moot. GAO points out that it’s the settlement that counts. Because every teaching hospital so far has settled with the government rather than fight it out in court, DOJ is free to negotiate whatever settlement conditions it chooses regardless "of the rules of evidence or methodological constraints."

And no teaching hospital is likely to risk incurring the full weight of the False Claims Act by fighting the government in court, says Bob Dickler, senior vice-president of the Washington, DC-based American Association of Medical Colleges.

In a response to the GAO report, HHS Inspector General June Gibbs Brown admitted that the OIG had overstated multi-level coding at the Pennsylvania schools, but said it had not made a difference in the PATH audits. She also endorsed risk-based targeting of schools, but said the OIG had no way of picking out the most problem-prone institutions. However, GAO believes the OIG can find enough information, such as carrier records that show a history of billing problems, to narrow the scope of the PATH program.