- Data analytics firm Integra Med Analytics is suing Providence Health, now Providence St. Joseph Health, over alleged False Claims Act violations related to $188.1 million in Medicare claims upcoding.
- The complaint, filed Aug. 10 in the U.S. District of Central California alleges Providence and its consultant, J.A. Thomas and Associates, encouraged doctors to add spurious secondary diagnoses on medical claims to increase Medicare payments to the health system. Modern Healthcare first reported the story on Wednesday.
- Integra uncovered the upcoding scheme in an analysis of Medicare claims data between 2011 and 2017, according to a copy of the complaint provided to Healthcare Dive by Integra’s attorney, Jason Collins, a partner with Reid Collins & Tsai. The analysis found Providence hospitals used secondary codes for complications and comorbidity more often than other hospitals.
Adding a secondary code to a Medicare claim can increase its value between $1,000 and $10,000, according to the complaint. Documenting a major complication can increase the value as high as $25,000. According to the lawsuit, Providence tacked secondary codes for encephalopathy on 1,429 — or 12% — of 11,000 claims for femoral neck fracture. That compared with 4.5% reported encephalopathy for other hospitals, which filed 1.1 million femoral fracture claims.
The suit claims physician tip sheets created by Providence’s consultant pushed doctors to document certain secondary diagnoses and downplay others that would not yield a high financial return. For example, one tip sheet urged doctors to “[d]ocument severed malnutrition — it not only adds severity as an MCC, it will likely prolong the post-o course thereby aligning the illness severity with length of stay.”
Another tip highlighted use of acute respiratory failure as an MCC, but discouraged respiratory distress “since it yielded ‘little credit,’” according to the suit.
The secondary codes Providence hospitals most frequently added were encephalopathy, respiratory and malnutrition. The consultant is a subsidiary of Nuance Communications, according to Collins.
In a statement provided to Healthcare Dive, Providence said it received a partial version of the complaint this week and is reviewing the charges. The system emphasized that it “follows rigorous standards for Medicare reimbursement claims, based on all relevant regulation and supported by our core values.
Providence added the federal government has declined to intervene and “we will proceed based upon our review and how and if the case moves forward.”
Integra is seeking to recover the $188.1 million the government paid as a result of the alleged scheme.