Simple errors open door for full-blown audit

Poor documentation could make you a target for federal investigators, experts say

In a special fraud alert three weeks ago, federal prosecutors said they would come after physicians caught falsifying certificates of medical necessity for home health or durable medical equipment. Now, the investigators are adding fraudulent CMNs for clinical diagnostic tests to their priorities, making it clearer than ever that physicians are squarely in the crosshairs of the Department of Justice in 1999.

A recent agreement between the Health Care Financing Administration and physician groups may help standardize some of the existing documentation regulations for clinical lab tests (see related story, below). Experts say such standardization could also reduce physicians’ ability to explain away documentation mistakes.

As with the OIG's recent statements on physicians and durable medical equipment suppliers (see story p. 1, 2/1 issue), physicians appear to be only secondary targets in the new fraud alert targeting clinical lab tests. After all, it's the lab that's responsible for claims submissions, and it's the lab that receives the reimbursement.

But the feds are clearly laying the ground work for following a paper trail right back to the physician's prescription pad. Like DME companies, a lab's reimbursement depends largely on the completeness and accuracy of the documentation in the physician's medical record, says Sue Prophet, RRA, CCS, director of classifications and coding at the American Health Information Management Association in Chicago. How well you document medical necessity for items such as clinical lab tests and DME supplies could determine whether or not your practice faces a full-blown audit.

"HCFA's position is that there's a mutual responsibility between clinical labs and ordering physicians to work together," says Brett Baker, regulatory affairs associate at the Washington, DC-based American College of Physicians-American Society of Internal Medicine. "The lab is ultimately on the hook, but when you're talking about overpayments, there could be some physician involvement."

For example, a clinical laboratory is hit with a False Claim Act lawsuit. Investigators comb the laboratory's files and compile a list of physician practices whose documentation the feds consider insufficient. Investigators are well within their rights to take a long, hard look at those practices' medical records to see if they support the lab tests that were ordered.

"If auditors or investigators come into a physician's office, it could ultimately turn into an expanded investigation," Prophet says. "Nobody wants investigators coming in and looking at their medical records for any reason. What if they decide the medical records are poor in general? They might then decide to take a closer look at the physician's evaluation and management coding. Their reasoning might be, 'If he has such bad documentation that it doesn't support the medical necessity of the test, his documentation probably isn't that good in some other directions, either.'"

Poor documentation invites other kinds of trouble as well, Prophet notes. If a clinical laboratory ends up in hot water because one practice documents poorly, the physician's relationship with that lab could be destroyed. "Not only that, but word could get out to other labs, and the physician might find himself in the difficult position of not being able to find a lab to run tests on his patients."