Community Health Network, a nonprofit health system with sites throughout the state of Indiana, recently entered into a settlement with the Department of Justice to resolve allegations related to false claims submitted to the Medicare and Medicaid programs.
Specifically, it was alleged that between the late 1990s and October 2009 Community Health Network had contracts with freestanding ambulatory surgery centers that were not owned by the health system. Allegedly, under these contracts the ambulatory surgery center would provide outpatient surgical services to hospital patients. The hospital would then bill Medicare and Medicaid for surgical services through its billing departments of the hospital. The billing information represented that the surgeries were performed in an outpatient department of one of the hospitals rather than the ambulatory surgery centers. This resulted in Community Health Network receiving higher reimbursement from the Medicare and Medicaid programs then it was entitled.
Learning Point
These allegations against Community Health Network are issues that every healthcare organization and hospital in the country needs to ensure it addresses. When submitting bills for reimbursement to the Medicare or Medicaid program, organizations are certifying that such documentation is not false and the organization has met every requirement to seek reimbursement for the services. In this case, it was likely an issue related to site of service codes.
Many organizations have outpatient facilities, ambulatory surgery centers, clinics, and other areas in addition to the inpatient center. Given these various different site of service code areas it is easy to understand how an organization could continue to bill for the wrong side of service. By way of example, Place of Service Code 22 is for outpatient hospital services. CMS defines such services as “a portion of a hospital which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization.” Place of Service Code 24 is for ambulatory surgery centers and is defined as “a freestanding facility, other than a physician’s office, where surgical and diagnostic services are provided on an ambulatory basis.” For a list of Place of Service Codes, please click here. Above all, organizations need to address every requirement related to billing at specific sites or for specific services to ensure the organization is in compliance with CMS’ regulations.