A whistleblower False Claims case against Epic Software Corp. (ESC or Epic) was made public on November 2, 2017. The complaint was originally filed in January of 2015, and states that Epic was overbilling Medicare for anesthesia services.
As of January 1, 2012, base units should not be billed to Medicare – only the physician’s time is submitted by the provider. The lawsuit alleges that Epic’s billing software has a default setting that charges both 1) base units for anesthesia provided for a procedure; and 2) the time of the procedure. As a result, payors are overbilled.
The whistleblower filed a lawsuit after attempts to get Epic to change the software were met with resistance.
Why Are the Hospitals Being Sued?
The breadth of this False Claims complaint is immense. In addition to Epic Systems, the defendants in this case include customers of Epic Systems, which number more than 280. The complaint states: “it is probable that most of ESC’s software customers (ie, the other listed Defendants) are using ESC’s Epic billing software as written.” These customers may have been submitting false claims” by not recognizing and correcting billing errors caused by flawed billing software. The DOJ is sending a clear message that providers are accountable and liable for overbilling errors that are caused by billing software.
EHR Vendor Risk Is Not New
This summer, the DOJ entered a $155 million settlement with another EHR vendor, eClinicalWorks. The software company was accused of falsely certifying that its software met meaningful use requirements. The DOJ asserted that eClinicalWorks hardcoded limited portions of its software to pass certification testing – but did not program the entire software database to meet certification standards. After the settlement, some predicted that more EHR enforcement would follow.
What You Can Do
The risks of EHR use and vendor management are high – and very much on the enforcers’ radars. EHR use must be addressed in your compliance plan:
Manage your vendor. Do not assume that software is automatically compliant with all billing related rules and regulations. Give compliance a significant role in vendor selection and due diligence. If you are considering purchasing an EHR system, involve multiple departments, who can ask important questions about billing, coding, audit functions, and HIPAA. Involve healthcare legal counsel in contract negotiations – be sure to address warranties, and how to handle disagreements when problematic functions are found. If you already have a vendor, establish and maintain a dialogue.
Audit, audit, audit. Regular auditing of billing and coding is necessary to validate the accuracy of claims especially when Medicare, Medicaid or private insurers change or update billing procedures. The Epic case came about because the whistleblower was responsible for ensuring anesthesia billing and coding was done in accordance with Medicare and Medicaid guidelines. Proper due diligence revealed the overbilling issue and prevented the submission of more false claims for one hospital - but maybe not the rest. A compliance program must include periodic auditing or review of claims. Emphasize to billing employees that complete reliance on billing software is not a proper compliance procedure. Employee review of claims on an ongoing basis is necessary.
Educate. Routinely educate business office staff proper billing and coding. It’s impossible to anticipate all the ways an EHR system could improperly bill. Train staff to recognize potentially erroneous functions.