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In 1999, a Michigan anesthesiologist with a busy pain medicine practice was convicted on 33 counts of mail fraud, sentenced to 36 months in prison, and ordered to pay a $25,000 fine, a $3,300 assessment, and $411,060 in restitution to Medicare, Medicaid, and other third-party payers. The mail fraud charges were the result of the physician improperly billing Medicare and other payers for anesthesia services.
The conviction of an anesthesiologist and the imposition of prison time are rare, but some of the activities for which the physician was convicted are not uncommon, say experts.
Anesthesiologists with pain management practices have to be careful not to bill for medical direction at the same time they are personally performing procedures such as spinal injections and nerve blocks, says Karin Bierstein, JD, assistant director of governmental affairs for the American Society of Anesthesiologists (ASA) in Park Ridge, IL.
Even without a pain management practice, anesthesiologists have to pay attention to how they handle billing for time spent in the operating room, says David Vaughn, Esq., managing partner of Vaughn, Dupree, & Miller, a Baton Rouge, LA-based law firm that represents 1,500 anesthesiologists.
"We’ve only had 20 cases in which our clients were either investigated, audited, or prosecuted for billing fraud related to anesthesia, but the risk is there for all anesthesiologists," warns Vaughn.
There is also a risk to the hospital if the anesthesiologist is an employee and if the billing mistakes were made as a result of ignorance, negligence, or reckless disregard for the regulations during the normal course of the job, Vaughn says. If, however, the anesthesiologist intentionally charges incorrectly with no knowledge or involvement of the facility, the hospital may not liable, he says.
If a hospital is handling the billing for a group of anesthesiologists acting as independent contractors, there is no risk because the surgery program is not the employer, he adds.
If an anesthesiologist is audited and ordered to repay charges that were filed incorrectly, the hospital is responsible only for paying back the percentage of the charges that constituted the billing fee, he says. For example, if an anesthesiologist pays 5% of total charges for the facility to handle billing, and the anesthesiologist is ordered to pay back $100,000 of fraudulent charges, the facility owes $5,000, he explains.
Even when the billing mistakes are made innocently, a pattern that could indicate intentional fraud might emerge if they are made often enough, he adds.
Cases that are prosecuted can be costly for anesthesiologists found guilty, Vaughn says. The fine is usually $11,000 per fraudulent claim plus penalty fees that are triple the amount of the claim, he says. This is in addition to any sentence that might include prison time, probation, and community service time, he adds.
New members of an anesthesia group also are financially liable for any infractions of group members’ actions even before the physician joined the group, Bierstein says. "Anesthesia groups that are indicted for fraudulent claims must pay the fines and penalties from corporate funds," she explains.
Even if the majority of members of the anesthesia group were not members of the group when the fraud was committed, they will suffer financially, she adds.
"We have a group of anesthesiologists in Michigan that have been held liable for their predecessors’ actions," she points out.1
The No. 1 issue for anesthesiologists is how to bill time, says Vaughn.
Some anesthesiologists will just add 15 to 20 minutes at the beginning or end of a surgery to cover their time outside administration of anesthesia, he explains. "This can’t be done," he says.
Anesthesiologists should be familiar with the definition of Medicare base units for anesthesia billing and make sure they are billing the appropriate time for each case, he says. "You cannot bill extra time for patient identification, chart review, patient examination, and determination of the type of anesthesia to be used, because these activities are included in the base unit," he explains.
Supervision of certified registered nurse anesthetists also requires that the anesthesiologist meet specific criteria, Vaughn says. "An anesthesiologist may medically direct up to four cases at a time, but the anesthesiologist must be present at the beginning of the case and at the emergence from anesthesia," he says.
The anesthesiologist also must be available during the case if needed, he adds.
Availability during a case varies from facility to facility, Bierstein says. "If an outpatient surgery program is a department within the hospital, does the anesthesiologist have to be in the outpatient department, or can he or she just be on campus?" she asks.
This is a gray area that has to be defined by the facility, she explains. "The best approach is to ask yourself if you’re comfortable explaining the anesthesiologist’s location to the patient’s family members," Bierstein says. If you can do that and not worry that the family members will believe that patient safety is compromised, then you can be sure that your policy regarding the proximity of the anesthesiologist is reasonable, she adds.
Billing for preoperative visits is another question that has resurfaced, she says. "This is a gray area, even though it is clear that the standard preanesthesia visit for all surgical patients is not billable," Bierstein says.
If an anesthesiologist sees a patient in order to evaluate the patient’s risk for perioperative complications and to optimize perioperative care, the visit can be billed separately if some important qualifications are met, she adds.
The visit must be medically necessary and must meet the documentation requirements of the type and level of visit billed, Bierstein says. One example of a preoperative evaluation that can be billed separately would be a comprehensive history and physical performed by the anesthesiologist for a nonphysician provider, such as a podiatrist, who is not licensed to perform a medical evaluation, she explains.
Timing is important when billing for a separate preoperative visit, says Bierstein. A claim for a visit on the same day as the surgical procedure is likely to raise questions, she adds.
In addition to reviewing anesthesia billing practices regularly and comparing them to requirements of the Medicare Carrier Manual, it is a good idea to ask your state’s Medicare director to clarify in writing his or her office’s definition of regulations about which you have questions, Vaughn suggests. Because many of the regulations are open to interpretation, it is best to have gray areas defined by the people doing the interpretation, he says.
The ASA also has several publications and articles, including a Practice Advisory for Preanesthesia Evaluation, that can help anesthesiologists review their billing practices, Bierstein says.
Because there are several areas that are open to interpretation, it is important that anesthesiologists and outpatient surgery providers review their billing practices to make sure they are compliant, she says. An ongoing process of reviewing practices and educating all members of the anesthesia group about accurate billing and documentation can prove that any mistakes in billing are just mistakes, not intentional fraud, she says.
"We’re not targets," Bierstein adds. "The Department of Health and Human Services isn’t looking for innocent errors to prosecute."
1. United States of America v. Traverse Anesthesia Associates, PC, and Pain Consultants, PC, No. 1:01-CR-125, United States District Court, Western District of Michigan, Southern Division (May 25, 2001).