Probably no move by the federal government in recent years has generated more alarm than the so-called PATH audits in teaching hospitals. Late last year, more than 40 named teaching hospitals, institutions, and organizations filed suit to halt the audits, calling them retroactive enforcement and a threat to the future of medical education. On April 27, 1998, a federal judge in California dismissed the case, saying it was not “ripe” for litigation. Now the parties have to decide whether they will appeal that decision.
“It is simply one of the greatest threats to the medical education system that we have,” said Ted Lewers, MD, secretary-treasurer of the American Medical Association, one of the organizations that has filed the suit. “It is a direct attack on the medical schools of this country.”
PATH stands for Physicians At Teaching Hospitals and represents an attempt by the Office of Inspector General (OIG) of the US Department of Health and Human Services (HHS) to determine if teaching hospitals and other institutions comply with federal rules about how teaching physicians should bill for care when a resident is involved. In a June 21, 1996, letter announcing the plan to begin the nationwide series of audits, the OIG wrote, “This initiative grows out of the extensive work performed by the OIG at a major East Coast university. The focus of the review was compliance with Intermediary Letter 372 (IL-372), the Medicare rule affecting payment for physician services provided by residents. We found that the institution was not complying with this rule. We also found that teaching physicians were improperly ‘upcoding’ the level of service provided in order to maximize Medicare reimbursement. … The OIG has initiated the PATH project in order to determine whether, and to what extent, similar problems are present at other teaching institutions throughout the country.”
The audits covered teaching physicians’ services from 1990 through 1995, and between June 1996 and July 1997, the OIG initiated 49 PATH audits at different teaching institutions. The outcry was immediate and loud.
Perhaps the results of the first PATH audit prompted that concern. The University of Pennsylvania paid $30 million: $10 million for overpayment and $20 million in penalties because the US Department of Justice considered the overbilling a violation of the False Claims Act.
Yet medical schools and teaching hospitals, along with professional associations, said the rule about how to document and bill Medicare for the services of teaching physicians had long been ambiguous. Not so, said the OIG. In April 1967, a letter from the HHS’ bureau of health insurance (IL-372) gave what the federal government said were clear instructions about billing for institutions, teaching physicians, and insurance carriers. The letter was reinforced and updated twice: once in 1992 and again in 1996.
But according to the Association of American Medical Colleges (AAMC), the OIG in performing the PATH audits was applying the newest standards that went into effect July 1, 1996, rather than the older standards that dated back to 1966. In addition, the AAMC charged that the OIG went into the audit with the notion that any errors were, in fact, fraud. The inspector general backed off a little in the summer of 1997, when Harriet Rabb, general counsel to HHS, said that the standards for paying teaching physicians had not always been clearly delineated. The intermediary who administers the Medicare program is assigned the duty of clearing up confusion. If an insurance carrier had informed a teaching institution that physicians must either personally furnish a service or be present when it is furnished by an intern or resident, then a PATH audit was appropriate. If that guidance had not been forthcoming from the intermediary, then the institutions were not liable. As a result, the OIG ended 16 of the 49 PATH audits then under way because the intermediaries had not provided clear guidance as to the rules. But for many, the audits continue and will be pursued across the country.
Audits are a way of life from now on, said Robert Dickler, the AAMC’s senior vice president for health care affairs. “But they should be conducted on a fair basis,” he said.
“The basic issue is that the inspector general has begun looking at medical schools and teaching programs,” said Dr Lewers. “There have been a number of guidelines for documentation,” and these have changed over the years.
What angers Dr Lewers is the manner in which the audits were performed, as well as the fact that they happened at all. “This isn’t to say that mistakes should not be rectified,” he said. “But the manner in which this entire process has been carried out leaves a great deal to be desired. What happened was that when the FBI went in, they would flash their badges and say, ‘We want 100 charts right now.’ The charts were reviewed based on the 1996 guidelines, but the services rendered were pre-1995.”
In some cases, Dr Lewers said, the institutions had been audited recently according to more current guidelines, and few or no problems were found. In some instances, money was repaid; in others, it did not need to be, he said. “Now we suddenly have the FBI coming in, flashing badges, demanding charts and comparing them to a standard that did not exist when the service was rendered. They come in and find some mistakes and then extrapolate that to the number of claims filed in that period.”
In addition, he said, mistakes made in the government’s favor were not counted. “It was almost a gestapo technique.” The AMA joined the suit “to try to get some clarification and stop the process. None of us are in favor of blatant fraud,” said Dr Lewers. But in some instances, the requirements are onerous. “If you do a history and physical on a patient, that takes a good hour.” Often the resident, also a licensed physician, does the history and physical, and the teaching physician comes in and reviews it. “Why should the teaching physician spend another hour of his or her and the patient’s time doing the whole thing over again? We need to make sure we have guidelines for the teaching process that make sense. What we are seeing now is totally inappropriate.”
- Copyright © 1998 by American Heart Association