Switching to Electronic Medical Records May Not Be a Cure for Billing Abuses

by Sheppard Mullin Richter & Hampton LLP

[author: Robert Rose]

Last month, in a joint letter by HHS and DOJ to five prominent hospital associations, the government warned that some providers are using electronic medical records (EMR) to “game the system.” The September 24th letter gave examples of “troubling indications” of EMR misuse:

  • Cutting and pasting the same examination findings for multiple patients—known as “cloning”—to make it appear that physicians conducted more thorough exams that were actually done
  • Upcoding the intensity or severity of a patient’s condition simply to profit without improving the quality of care

Risk v. Reward

More than half of America’s hospitals have qualified for incentive payments authorized by Congress to encourage the shift to EMR. The government will spend more than $30 billion in economic stimulus funds to aid technology purchases by doctors and hospitals.

Most of the manufacturers and hospitals claim that EMR permits more efficient billing. However, a year-long investigation by The Center for Public Integrity published last month found that thousands of providers have steadily billed higher rates for treating Medicare patients, exceeding $11 billion in fees over the past decade. Regulators say the most aggressive billing, by only 1,700 doctors (of more than 440,000 nationally) cost Medicare $100 million in 2010. The largest share of those doctors specialized in family practice, internal medicine and emergency care.

A specific example cited was Baptist Hospital in Nashville. Its share of the highest paying claims rose 82% in 2010, the year after its emergency room began using EMR software. The hospital’s response was that billing had become more accurate using EMR and that its patients required more care in 2010. The New York Times did an analysis, concluding that hospitals receiving incentives to adopt EMR showed a 47% rise in Medicare payments at higher levels from 2006 to 2010 versus a 32% rise in non-incentivized hospitals.

How Will the Government Respond?

New healthcare laws authorize the Centers for Medicine and Medicaid Services (CMS) to stop payments for suspicion of fraud and to mine the data, searching for outliers. As a result, collections are at a record high and prosecutions in 2011 were 75% higher than in 2008. Earlier this year, the acting administrator of CMS confirmed that it planned to contact as many as 5,000 physicians who had been identified as billing outside the norms. CMS said its aim was “not intended to be punitive or sent as an indication of fraud.”

What to Expect?

While switching to EMR allows for better documentation of care and reduces under billings of visits, EMR can also make it faster and easier to defraud.

Most providers use EMR as it was intended, but regulators are gathering proof that it has become a fraud tool to improve the bottom line. With the HHS/DOJ letter, providers have been warned. The sums involved are huge and data mining, in the hunt for outliers, will increase. EMR and aggressive billing is a combination that attracts attention.

Providers who have switched to EMR can audit or sample their new system for compliance before the government does it. Mine your own data. Look for trends, disparities, sharp year-over-year changes. Monitor your compliance training.

Get sound legal advice before the OIG knocks. Providers come in all sizes and shapes. Being tagged as an outlier based on data alone is the beginning of a long conversation about EMR’s individual impact. Don’t forget, because it’s still true: an ounce of prevention is worth a pound of cure.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.