Advice to hospitals: Be careful what you bill for

For today's column on alleged fraud at Kernan Hospital, I interviewed Dr. Scot Silverstein. He's an MD, consultant, adjunct prof at Drexel and an expert on electronic patient records.

The U.S. attorney for Maryland said that Kernan's secondary diagnosis in 2008 of a severe, rare kind of malnutrition was a bogus attempt to increase reimbursement. The more severe a patient's condition, the more money hospitals get paid. The disase, kwashiorkor, is rarely seen outside of developing nations, but in 2008 Kernan was diagnosing one out of every eight patients with kwashiorkor. From the column:

But somehow Kernan experienced an apparent kwashiorkor outbreak starting in 2006, the only Maryland hospital to do so. Its cases of kwashiorkor as a secondary diagnosis grew a hundredfold, from three in 2005 to 358 in 2008, according to data from the state Health Services Cost Review Commission.

That was more than a third of all the diagnosed kwashiorkor cases statewide. At Kernan, 12.7 percent of all patients were diagnosed in 2008 with the rare ailment. At all Maryland hospitals, on the other hand, only 0.13 percent of that year's patients had kwashiorkor on their charts, according to the HSCRC data

The increasing computerization of medical records may be raising hospitals' tendency to do this sort of alleged "upcoding." When hospital personnel enter cases into the computer, prompts will come up nudging them to add disease codes that will increase reimbursement. Silverstein, blogging at Health Care Renewal, says that in any case the spike in kwashiorkor diagnoses must have been a red flag for government auditors, who have their own software to identify this kind of thing. Silverstein:

I note that I could have easily advised the hospital not to use the diagnosis of kwashiorkor or do these things, had I been on staff there. I would have opined that it would stick out like a sore thumb via the algorithms payers use to detect fraud, e.g., via sudden, strange changes in claims. One wonders why nobody else gave that advice ... (fear?)

Here's a commenter on Silverstein's blog:

For years I've been jumping up and down telling folks that this was bad news. Kwashiorkor doesn't exist in developed nations. It is simply wrong to code for it 99.99% of the time.

Everyone seems to be blinded by the potential to get more money and taking the risk to not be audited!

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