Healthcare Fraud: Auditing and Detection Guide, 2nd Edition

Response Model

This component of the anomaly continuum is about the response to the irregularity noted. The response can take the form of words or action. Let us review the following case, which involves a third-party billing company:

Case: Third-Party Billing

Emergency Physician Billing Services, Inc. (EPBS) provided coding, billing, and collections services for emergency physician groups in over 100 emergency departments in as many as 33 states. Based on allegations presented by a qui tam relator, the United States charged that EPBS and its principal owner, Dr. J. D. McKean, routinely billed federal and state healthcare programs for a higher level of treatment than was provided or supported by medical record documentation.

EPBS was paid based on a percentage of revenues either billed or recovered, depending on the client. EPBS coders received a base pay with bonuses based on the number of charts processed and were required to process 40 emergency room medical charts per hour, or the equivalent of a chart every 90 seconds. (By contrast, a competitor of EPBS requires 120 charts per day.) The EPBS coders were able to meet these quotas by taking short-cuts and disregarding information in the chart. No coder at EPBS ever attended training, or any other informational meeting regarding emergency department coding, other than in-house EPBS training, and no coder ever contacted a physician with questions regarding a chart.

The defendants agreed to pay $15.5 million to resolve their ...