The importance of medical necessity compliance: Recent actions by the U.S. Attorney’s Office and the OIG

July 16, 2018 / By Barbara Aubry, RN

I’ve been talking about this for years. I still see folks who don’t think compliance with medical necessity polices is critical.

Believe me, I understand human nature; noncompliance can be intriguing. For example, my doctor tells me to use sunscreen. Every time I apply sunscreen though, I manage to get it in my eyes – and it stings! So, sometimes I forgo sunscreen and of course, I get a sunburn. I was non-compliant but if I hadn’t gotten a sunburn I likely would have tried it again…sort of like not complying with medical necessity polices and getting away with having a claim paid. If it’s so easy, maybe it can be done again – and again – and again. No big deal, until the United States Attorney’s Office auditors get curious based on data mining that identifies outlier providers. Which they then forward to the OIG for further scrutiny and action. An example of this increased scrutiny from a recent OIG report below:

An internist from Baltimore Maryland agreed to pay the U.S. $1,526,038 to settle allegations that he submitted false claims to Medicare and Medicaid for medically unnecessary autonomic nerve function tests and neurobehavioral status exams. The doctor administered central autonomic nervous function tests and mini-mental exams.  Autonomic nervous function disorders are relatively uncommon and tests conducted to determine such disorders should be done only after a clinician suspects such a disorder.  According to Local Coverage Determinations (LCDs) from Novitas (the Medicare administrative contractor for Maryland), such tests should be conducted only one time per beneficiary, with the necessary equipment and by clinicians with specialized training to administer and interpret these tests.  The CPT codes used for central autonomic nervous function tests were 95921, 95922, and 95924.  Additionally, the doctor assessed patients using mini-mental status exams that he billed as a neurobehavioral status exams using CPT code 96116.   

According to the settlement agreement, from January 1, 2011 to June 30, 2017, the doctor submitted claims to Medicare and Medicaid for medically unnecessary autonomic nervous function tests (CPT codes 95921-95924).  The United States contends that these tests were not medically necessary and otherwise were excluded from coverage under both programs because the provider did not have the necessary equipment to perform these tests; the patients who underwent the testing had not been diagnosed clinically with an autonomic function disorder before the tests were conducted; the provider did not have the specific training required to conduct autonomic function tests or interpret the results and failed to follow Novitas’s Local Coverage Determinations (L34788 and L35395) regarding coverage indications, limitations, and medical necessity for autonomic function testing. The tests were performed merely to monitor patient symptoms or conduct patient screenings without signs or symptoms of autonomic dysfunction and not to make any clinical decisions or manage patient care.


Find the entire report here.

The doctor denied the United States’ allegations. 

Also, as part of the settlement, he agreed to enter into an expansive, three-year Integrity Agreement that provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to the settlement. 

My Take

This reminds me of the saying, “You can fool some of the people some of the time, but you can’t fool all of the people all of the time.” The doctor actually ran the scam for six years. According to the OIG, the case:

Arose from a recent initiative inside the United States Attorney’s Office.  The United States Attorney’s Office has dedicated resources to enable it to review Medicare billing data.  The review of that data has enabled the United States Attorney’s Office to identify areas of concern where it appears that billing irregularities may have taken place.  Partnering with the affected agencies, the United States Attorney’s Office has developed the ability to investigate these billing irregularities to determine whether the matter should be pursued under the False Claims Act.” 

This is serious folks. Both the United States Attorney’s Office and the OIG are watching frequency outlier claims containing CPT codes 95921, 95922, 95924 and 96116 that we are certain of.  We’ve been warned previously that auditors are interested in other outlier behaviors (overuse of CCI modifiers, excessive E/M services, charges for bundled E/M services, observation, testing excess, PT/OT frequency etc). The newest concern is the confirmation of additional funding to pursue reviews of Medicare billing data to determine if irregularities should be investigated by the OIG under False Claims.

Be careful; do not over code or over charge for “soft” services like the mini-mental status exam unless it is properly conducted and documented. Same goes for services like stand-by, case management oversight, team conferences, care plan oversight, smoking cessation services, etc. Work with only the latest and greatest versions of both CMS NCD and LCD policy data. The copy of a policy from two years ago that the department is still using is not sufficient. Yes, I understand that it’s a challenge keeping up with all the Change Requests (CRs) CMS releases that impact coverage, but it’s essential. The “we’ve always done it this way and gotten paid before” camp needs to appreciate the increased scrutiny of Medicare billing data coupled with enhanced data mining capabilities of both the U.S. Attorney and the OIG, thanks to increased funding. For those who previously have considered investing in access to medical necessity policy data, now may be the perfect time to move forward. It certainly will be far more cost-effective than paying fines and living under Integrity Agreements.

Barbara Aubry is a senior regulatory analyst for 3M Health Information Systems.