Some CCOs Worry About Personal Liability

The JPS case is also the latest FCA lawsuit with a compliance professional as the whistleblower. It raises questions about the implications of the person who is responsible for helping identify problems internally filing a whistleblower complaint when they’re rebuffed.

“I’ve known people who have gone down that road,” said Kelly Sauders, a partner in Deloitte Risk & Financial Advisory. One compliance officer spent two years calling attention to problems at their organization, but leadership and counsel didn’t seem sufficiently responsive. As the compliance officer’s anxiety and depression mounted, along with worry about personal liability, the compliance officer eventually filed the whistleblower lawsuit, which settled, Sauders said. “It takes a toll on someone to do that. This person had to step away from the industry and do something different.” In another case, the compliance officer didn’t try to resolve problems internally, Sauders said. “There are different stories and different circumstances.”

From her work on false claims cases, Sauders has learned the value of paying close attention to people’s behavior in interviews and to their history. There are warning signs in the number of times they’ve complained about the same problem, and leaders are cavalier at their own risk, she said. “Sometimes it’s obvious when people are nervous and the way they say certain things,” Sauders explained. It’s a red flag if the employee expressed concern about an issue several times and retained documentation “and they feel like they have done what they can and start to believe they have personal risk,” she said. “Leaders should quickly determine who they can talk to, make sure the person feels fully heard and, within reason, knows that leadership is taking steps to address the concern.” Even though compliance officers and senior leaders are often unable to share details of an investigation, they can follow up with the person raising the concern to check in and reassure that actions are being taken. “Organizations that help people be heard and try to share what they can help mitigate their risk,” Sauders said.

JPS Whistleblower: Environment ‘Grew More Hostile’

Lee, the whistleblower in the JPS case, joined the hospital in 1996 as an executive assistant, and from 2004 through late 2017, when she said she was terminated, Lee was director of compliance and privacy officer, according to the complaint.^[4] Around 2015, she and her team began auditing modifiers 25, 59 and XU. Medicare doesn’t pay physicians or other providers for E/M services (e.g., 99213-99215) performed on the same patient on the same day as a procedure unless the E/M services are significant and separately identifiable. If they are, providers append modifier 25 and are reimbursed for the E/M code. Modifier 59 “is used to identify procedures/services, other than E/M services, that are not normally reported together, but are appropriate under the circumstances,” CMS said.^[5] There are four more specific versions (XU, XE, XS and XP), but providers can default to 59, although CMS urges providers to use the “X” modifiers whenever possible.

The JPS compliance team audited a random sample of 450 accounts with modifier 25 and allegedly found a 95% error rate. An audit of 300 records with modifier 59 and 200 with modifier XU found a 70% error rate. The whistleblower “brought her team’s findings and concerns to the attention of JPS Health’s executive management. Defendant knew that refunds were owed to the United States,” the complaint alleged. “JPS Health ignored the problem and failed to repay the amounts owed.”

An exhibit to the FCA complaint includes the compliance team’s audit findings. For example, for modifier 25, the report states that “Modifier 25 is appended inappropriately to E/M services when bundled service was charged incorrectly.” Another exhibit includes the corrective action plan. For example, the health information management department “should review Modifier 25 usage weekly and report results in the quarterly Compliance Committee Coding Audit Review monitor” and “Patient Financial Services should review overpayments for potential repayment to appropriate payers and resubmission of claims if appropriate.”

But the whistleblower alleged that six months after sharing the audit results, JPS didn’t “adequately implement” the corrective action plans systemwide or repay overpayments. Throughout 2016 and 2017, the whistleblower followed up on the modifier audits, growing more concerned that JPS hadn’t repaid the money, the complaint alleged. She said her “work environment grew more and more hostile” and eventually she was terminated because “of her efforts to do the right thing,” the complaint alleged.

The JPS attorney said the hospital’s “compliance program operated as it should have,” and a follow-up audit of the modifiers “reflected the problem had been corrected.” During the government’s investigation, JPS also voluntarily refunded the $438,673 “related to the potential misuse of modifiers,” said Mehta, with Bradley in Tampa

Mehta noted that JPS is “a hospital of last resort, with primarily a Medicaid population.” After a very thorough internal investigation, “I can tell you with confidence there was no suggestion anyone at JPS knew of any orchestrated or acted intentionally to bill improperly.” He said JPS settled Lee’s retaliation lawsuit against the hospital.

Some Providers Steer Clear of Modifier 25

Many providers are afraid of using modifier 25, said Valerie Rock, a principal with PYA in Atlanta, Georgia. Long-running external audits have had a chilling effect on billing for E/M services with modifier 25 for some providers. But modifiers don’t always lead to overpayments, Rock said. In fact, physicians may be underpaid when they provide E/M services in connection with procedures, such as infusions (e.g., chemotherapy), “if they don’t bill it out of fear.” But if patients require evaluation of their cancer diagnoses or other diagnoses managed by the physician, it may be appropriate to bill an E/M (e.g., 99213) separately from the chemo, which would warrant the use of a modifier, Rock said.

That won’t fly, she cautions, if the medication or diagnosis hasn’t changed. “If everything is stable, it will be considered bundled,” she noted. However, if there was medical necessity for the review of the conditions assessed, the E/M should be supported and should be appealed if denied, Rock said. The use of modifier 25 in this context was persuasive to an administrative law judge in a recent decision in favor of an oncology center’s appeal of its Medicare claim denials.^[6] The decision reinforced the fact that providers may bill for chemo administration and E/M services provided to patients on the same day, as long as certain criteria are met.

Rock said the best practice is to bill the E/M service with any minor procedure when documentation supports one of the following: “(1) The visit was planned for review of the condition(s) per standard of care; (2) new or worsening problems are present and are addressed with a change in treatment, diagnostic tests ordered, or referral to specialist based on evaluation; and (3) counseling, coordination of care, and/or other services which qualify for the accounting of time which are unrelated to the procedure performed on the same date, with the documentation of the total time spent performing the qualified services.”

‘Don’t Knock the CIA’

When compliance officers turn into whistleblowers, sometimes it’s a reflection of an organization’s culture, although that’s not always the case, said Andrei Costantino, vice president of integrity and compliance at Trinity Health in Michigan. “Culture starts with leadership, and it’s tough if you’re reporting concerns to them and they’re not addressed,” he said. “If leadership embraces compliance, it’s evident in the way they respond to issues and seek the compliance team’s advice.” For example, compliance has a seat at the table at Trinity. When a big project comes up, operational departments want to pick the brains of the compliance team. “A lot of folks reach out to us. That’s how we know compliance is valued,” Costantino said. “It doesn’t happen overnight. There has to be confidence in the compliance team.”

Signs of a “bad culture” include a lack of separation between the legal and compliance departments, Constantino said. “I work closely with legal because they’re an integral part of the process. However, you need to balance legal and compliance obligations to ensure regulatory requirements are met,” he said. Trinity’s chief compliance officer reports directly to the CEO with a dotted line to the audit committee of the board.

Costantino said compliance officers shouldn’t be turned off if they’re recruited by an organization under a corporate integrity agreement (CIA). “Don’t knock the CIA,” he said. “It might be a good place to go because it can mean leadership has recognized the importance of compliance, and they are likely to dedicate more resources to the function.”

1 Department of Justice, “Hospital to Pay More Than $3 Million to Settle Whistleblower Suit,” news release, August 27, 2021, https://bit.ly/3twJgUC.
2 United States ex rel. Lee v. Tarrant County Hospital District d/h/a JPS Health Network, Civil Action No. A: 18-CV-0376-LY (W.D. Tex.), settlement agreement, August 17, 2021, https://bit.ly/2X57pG2.
3 HHS Office of Inspector General, “Dermatologist Claims for Evaluation and Management Services on the Same Day as Minor Surgical Procedures,” Work Plan, August 2021, https://bit.ly/3yYMYaC.
4 United States ex rel. Lee v. Tarrant County Hospital District d/h/a JPS Health Network, Case No. 4:19-CV-00412-P (N.D. Texas, September 21, 2020).
5 CMS, “Proper Use of Modifiers 59 & –X{EPSU},” MLN Fact Sheet, MLN1783722, March 2021, https://go.cms.gov/3ySlJOU.
6 Nina Youngstrom, “Provider Wins $2M Appeal at ALJ Over Modifier 25, Random Sample,” Report on Medicare Compliance 30, no. 11 (March 22, 2011), https://bit.ly/3tr9tDZ.