The Center for Public Integrity Recently Exposed the Practice of Submitting Incorrect Medicare Procedure Codings that Cost Taxpayers Billions in Unjustified Physician and Hospital Payments — a Comment on Congress’ Corruption-Based Lunacy in Giving the American Medical Association Control over Medical Procedure Codes — and an Added Example of Similarly Special Interest-Favoring Complexity in the U.S. Tax Code

17 September 2012

Theme — we live in a culture increasingly founded on technically complex corruptions that work to benefit the scheming Affluent — at everyone else’s expense

The public’s:

ignorance,

unthinking willingness to be fooled by hollow statements regarding “American values,”

and

its monumental apathy regarding culturally relevant ethics —

allow these exemplars of avarice to get away with their heists.

Below, I cite two pertinent articles that indirectly make this point. Both demonstrate that, if we continue to be less politically aware and analytically lazier than the greediest people among us, we will continue to fall economically further behind them.

Citations — to two examples of deliberately imposed regulatory complexity that allows financially well-off people to screw everyone else

Fred Schulte and David Donald, Center investigation suggests costs from upcoding and other abuses likely top $11 billion, Center for Public Integrity (15 September 2012)

Andrea Louise Campbell, America the Undertaxed, Foreign Affairs 91(5): 99-112 (September-October 2012)

First, the Medicare up-coding scam

When I was a third-year medical student and still thinking about finishing and practicing medicine, I used to receive occasional mailed flyers about how to “up-code” medical billings, so as to maximize physician income. The people behind these flyers wanted money in return for teaching medical professionals how to legally cheat the system.

Sixteen years later (just two days ago), the Center for Public Integrity published an investigation showing that this kind of coding fraud accounts for at least $11 billion in unnecessary, taxpayer funded Medicare expenses.

After reviewing a 5 percent sample of Medicare claims, submitted by 400,000-plus medical professionals and 7,000 hospitals and clinics, the Center concluded that:

[T]he Center’s analysis of Medicare claims from 2001 through 2010 shows that over time, thousands of providers turned to more expensive Medicare billing codes, while spurning use of cheaper ones. They did so despite little evidence that Medicare patients as a whole are older or sicker than in past years, or that the amount of time doctors spent treating them on average was rising.

While it’s impossible to know precisely why doctors and hospitals moved to better-paying codes in recent years, it’s likely that the trend in part reflects “upcoding,” — the practice of charging for more extensive and costly services than delivered . . . .

The added fees totaled at least $11 billion, adjusted for inflation — more than half of it from higher doctor fees for office visits and the rest from other services, including treatment in nursing homes and hospitals.

The investigation identified thousands of doctors, from a broad range of specialties and locales, who adjusted their billing patterns sharply upward and netted higher fees as a result. A 1979 federal court injunction in Florida bars HHS from publicly releasing doctors’ names and Medicare reimbursements.

The Center sued HHS to obtain the Medicare data but had to agree not to publish the names of individual doctors, unless they agreed to discuss their billing histories. Most who were contacted declined to do so.

From 1999 through 2008, the number of doctors who billed at least half of their office visits at one of the two most expensive codes more than doubled to at least 17,000 practitioners. Those who quit using the two least expensive codes rose 63 percent, climbing to more than 13,000 in 2008.

Notice how Congress, aided by the court, have made it impossible to inexpensively hold scamming physicians personally accountable for their misdeeds.

How this scheme works — with Congress’ initial help

The Public Integrity report explained how the American Medical Association (essentially a glorified lobbying group) and Congress pulled this trick out of the hat:

In 2001, members of a government panel were so fed up with the payment scales that they recommended junking them. Two years later, Congress passed Medicare reform legislation that called for studies to consider alternatives to the pay scales.

But the law required Medicare officials to consult physicians’ groups before making any changes, a legacy of the decision to allow the AMA to develop the codes. Medical groups have since been able to block any reform effort, according to former government official Scully and other insiders.

Scully said it was a “big mistake” for the government to give the AMA such a prominent role in creating the doctor payment yardstick. “As a result the AMA has amassed enormous power,” he said.

Medicare officials deny the AMA and other medical groups have outsized influence over the payment system. But they concede that the system has been left in place for years because they could not reach an agreement on ways to improve it.

“Could not reach agreement” — a phrase that unwittingly exposes plutocracy’s hold on government

Since when do taxpayers need to reach agreement with avariciously self-interested people, who pillage the public?

Note

One of my first and second year medical school professors (a supremely capable clinician and now highly regarded medical leader) was so incensed by the AMA’s institutionalized greed and its skewed sense of medical ethics that he refused to join the organization.

His brief statement in that regard, and his admirable professional example thereafter, have stayed with me all these years, perhaps because they so closely match my own sense of professional right and wrong.

“Agreement” with letting foxes run the hen house is exactly what went wrong with ObamaCare and with President George W. Bush’s unfunded prescription drug benefit.

Requiring consent from self-interested lobbying groups is conceptually identical to letting bank robbers write prescriptions for bank security.

How the AMA billing codes work

Medical billing and procedure codes identify the patient visit by type and what was required from the provider. A short simple visit is paid less. A longer and/or more analytically or procedurally complex one is paid more.

Some doctors argue that the government’s insistence on digitizing medical records has automatically increased the amount of time that they have to spend with each patient, thereby justifying higher billings.

The Public Integrity report notes that electronic data-keeping makes up-coding easier (and presumably more tempting) than it was before.

Note — the arguably questionable implementation of electronic medical records

Based on my experience as a medical student in the mid-Nineties and as a patient now, the “additional time required” criticism of electronic record-keeping may be correct. There is even more busy-work in medicine today than there was (already atrociously) then.

I have seen surprisingly little benefit from electronic record keeping. My military physicians today spend most of their time with their backs to me, entering data (that no one will ever look at) into a computer. None of this documentation is properly reviewed afterward to prompt follow-up inquiries or visits — which, in my view, defeats a significant part of the purpose of electronic data keeping.

Also from a medical perspective, being unable to evaluate the patient’s demeanor and question-prompted body language defeats some of the worth of in-person medical visit. It is difficult to evaluate the unspoken parts of the patient’s presentation, when you are not able to look at her or him.

On the other hand, I have noticed an increase in in-house efficiency when electronic orders route orders for radiology or pharmaceuticals. However, I have not noticed a similar efficiency boost, when transmitting records between providers that do not belong to same entity.

Government’s initial ($30 billion dollar) emphasis on electronic record-keeping was arguably less than well thought out. Especially so, because the United States is unlikely to use this collected information in accessible national databases, the way other advanced nations do in furthering Medicine’s population-founded knowledge bases.

“Current procedural terminology” (CPT), meaning medical procedure coding, has become more complex

That is probably not because medicine has become that much more complex. My guess is that increased complexity was created because some people think that making minute differences in codes will make the billing system more accurate. Can’t let those dollars go uncollected, can we?

In addition, self-interested people probably recognized that complexity makes hiding quasi-scams easier and more difficult to prove, even when uncovered. If there are increasingly minute differences between one code and another, it is difficult to prove that someone did not simply “misunderstand” the differences between the steps.

This twist makes it very much harder to prove the intent to defraud. “My gosh, I was just so busy that I didn’t recognize that I was on the wrong item.”

Note — more details about CPTs can be found at . . .

Wikipedia has decent overviews of medical billing and procedure codes, here and here. (Although some of the reference links are broken.)

Trisha Torrey (About.com) has written a guide showing readers how to use the American Medical Association’s website to look up a CPT code pertinent to them.

Greed and institutionalized “scammery”

The Public Integrity report indicates that:

The payment system also has given rise to a cottage industry of coding experts and medical practice consultants who conduct seminars for doctors that often encourage higher coding — in some cases through Internet pitches that promise doctors significantly higher profits.

Medical organizations also teach their members ways to code at higher levels legitimately. In one 2009 article, the academy of family physicians noted that using the second-highest level for most office visits could put an additional $30,000 to $75,000 in a doctor’s pocket.

As a result, the billing codes intended to hold medical fees in check have instead contributed to spiraling Medicare costs.

What fun! — scamming for profit, without a downside

The Center for Public Integrity report indicates that there is virtually no risk of getting caught for up-coding. And, even when one is exposed, no significant penalties are enforced.

Considering the sheer volume of billing code and patient visits, people familiar with the difficulty of preventing while collar crime and proving fraud will not be at all surprised.

A parallel, also institutionalized complexity — income taxes that we inequitably pay, again to the detriment of the Whole

Our tax system is a haven of complications that benefit of wealthy people and corporations — again with Congress’ eager help.

The tax code lays down a number of tax fiats, intermixed with voluminous numbers of “yes, buts” and “except whens” — most of which are described in such poorly explained and jargon-filled ways that the tax preparation industry found its reason for being.

Note

Law school introduced me to America’s absurd tax code.

My perspective then (and now) is that the Code was intentionally designed to keep ordinary people from understanding it.

Its thousands of pages are a haven for tax experts and wealthy loop-hole seekers. Congress intentionally designed it to benefit people, who already have enough money to play the games required to evade imposition of socially sensible tax policy.

A plutocrat’s playground, so to speak. That is what happens when the politics game requires vast sums of money to play.

Because of the deliberately implemented complexity of the American tax system, which advertises one thing and does another, Professor Andrea Campbell’s moderately long Foreign Affairs article is arguably only for motivated readers.

She compares the inane American tax system with those of other economically advanced countries. Following her proof requires reading the whole 13-page piece.

Professor Campbell concludes that the United States ranks 32^nd, out of 34 industrialized countries, in regard to the total tax share (compared to the Gross Domestic Product) that it collects. In other words, Americans are comparatively hardly taxed at all:

Compared with other developed countries, the United States has very low taxes, little redistribution of income, and an extraordinarily complex tax code.

If you read what Dr. Campbell has to say, you will begin to see how illusory Republican and Democratic Party arguments about the tax code — and its relationship to both the deficit and the public good — actually are.

No one in power really wants to change anything to keep the affluent from continuing to suck up the bulk of America’s wealth.

That blind spot in our thinking is almost certainly why Professor Campbell included references to arguably saner nations, so as to give readers a broader social perspective.

Understanding her implied point, however, would require the majority of Americans to get over their idea that capitalism can ever be pure. We would, in essence, have to become both Reality-accepting and analytically un-stupid. That’s a tall order.

The moral? — Letting wolves hide in the forests of complexity, which we incredibly allow them to design to their own benefit, makes these democracy-defeating oligarchs difficult to detect and root out

The American Medical Association as the Keeper and Voluntary Enforcer of Medical Procedure Codes? What simpletons came up with that idea?

Congress, voted in by the public.

A tax system that punishes the middle class to benefit everyone else? What imbecile thought that was a good social idea?

Congress, voted in by the public.

America’s most essential problem is the public’s willingness to mistake “isms” for intelligent social and economic policy. Our delusions screw us at every turn.

The above two articles illustrate how magical thinking works against us.

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