By Joey Berlin
Texas Medicine Magazine
Seven years ago, Charles Turner Lewis, MD, thought it was over.
Dr. Lewis' battle with the Texas Health and Human Services Commission (HHSC) Office of Inspector General (OIG) over his Medicaid billing had cost the Kaufman pediatrician three years and thousands of dollars. But in 2008, it appeared he'd come out on top over an agency that has earned a reputation for making life harrowing for Medicaid-participating doctors for more than a decade.
But now — even as sweeping changes at OIG bring hope the agency will become more efficient, transparent, and reasonable — Dr. Lewis finds himself fighting a new version of the same battle.
Last August, he once again heard from OIG, alleging billing overpayment on the exact same records that were at issue during the first audit — records from 2002 to 2006.
"So now once again, here I am. It's 2015 … and I'm now having to go back through spreadsheets that they have provided and look through charts that I have electronically," Dr. Lewis said. "But probably over two-thirds of the claims are on paper charts that they took off with, and I have not had access to for the last 10 years. I have no way to prove that they have maintained my records at all because they have been out of my sight for 10 years. And I think it's just totally, unbelievably unrealistic to continue to come after somebody for something that is 10 years old."
OIG, whose charge is to prevent, detect, and investigate fraud, waste, and abuse in Medicaid and other aspects of the health and human services system, is in the midst of a complete rebuild following a sharply critical Sunset Advisory Commission report last fall and the resignation of previous Inspector General Doug Wilson and other officials a couple of months later. All this occurred after a questionable no-bid contract drew the attention of investigators and the Texas State Auditor's Office (SAO)..
Much of what's new about OIG provides hope for medicine's future relationship with the agency, such as the stated focus of new Inspector General Stuart Bowen Jr. and a new law that tightens the definition of "fraud" and situations in which OIG can place a payment hold during an investigation.
Mr. Bowen says the vast majority of doctors who participate in Medicaid do so lawfully and helpfully, and "I'm only after those who don't."
"Going forward, we believe that we've got an OIG we can trust and believe in and discuss things with, and we think we've got a set of guidelines for the OIG that we can live with that will allow us to get these cases settled in a timely fashion," said John Holcomb, MD, chair of the Texas Medical Association's Select Committee on Medicaid, CHIP and the Uninsured.
But the reemergence of Dr. Lewis' case shows physicians who were subjects of open cases during the agency's bad old days can't necessarily just leave the past behind.
An Unwanted Sequel
Dr. Lewis battled OIG from 2005 to 2008 after it initially examined his billing practices in 2004-05 and claimed he might owe the state nearly $440,000. (See "Guilty 'Til Proven Innocent," December 2012 Texas Medicine, pages 16-22.)
Dr. Lewis says he thought he had won that battle for good after then-Attorney General Greg Abbott ultimately ordered the state to obey a previous court order stating OIG couldn't execute payment holds for his Medicaid services. Eventually, Medicaid processed all his unpaid claims.
But Dr. Lewis says he heard from OIG again in a 2013 letter, which said the office thought Dr. Lewis received overpayments for the same time period, 2002-06, that OIG flagged the first time around.
"And they sent us spreadsheets, and they said, 'Well, we actually have an error in our spreadsheets; we'll get back to you,'" Dr. Lewis said.
Last August, Dr. Lewis' attorney received another letter from OIG. This one, he says, once again asserted overpayment stemming from the exact same records, those from 2002-06. The letter offered Dr. Lewis the option of paying to settle the case; Dr. Lewis' attorney, Ken Stone, asked Texas Medicine not to publish OIG's settlement offer.
If Dr. Lewis chose not to settle, the letter said, OIG would use a federal extrapolation formula to calculate what Dr. Lewis owed.
According to Dr. Lewis, OIG claims the court case he previously won "solely had to do with whether or not the OIG had the authority to put a payment hold on any and all services that I rendered," which Dr. Lewis' attorney says is legally correct.
Noting doctors have finite limits of time to file claims or to file an appeal for a denied claim, Dr. Lewis says OIG should have a statute of limitations for pursuing suspected overpayments; right now, none exists.
"They just want you to say, 'Oh, you know what, this is such a small amount of money' … and [pay it to] be done with it," Dr. Lewis said of OIG's settlement offer. "But I'm not that type of person. If there was overbilling inadvertently, then okay, fine, I owe something. But I also would think, why is this still going on dating back to 2002? Really, how long can you beat a dead horse?"
Since his dispute with OIG originally began, Dr. Lewis has gotten more involved in efforts to improve the Medicaid system and joined TMA's Select Committee on Medicaid, CHIP and the Uninsured.
"It's really deflating," Dr. Lewis said. "For as long as I've been in practice, 21 years, I've been a Medicaid advocate. And then I went through that horrific court case and didn't get paid for almost two years on that Medicaid claim. It's getting harder and harder to be an advocate, and it's getting harder to convince other physicians to join the program when you have situations like this."
Just receiving a letter from OIG is scary enough for physicians, says San Antonio pediatric ophthalmologist James Mims, MD. Last spring, he received an audit letter from OIG requesting records on 17 different patients. Dr. Mims says he sent OIG the requested records in April. More than four months later, he was still waiting for a response.
"Every day, I worry about the mail. What's going to come in the mail today?" Dr. Mims said. "The biggest fear is that the person passing judgment on me is not going to know what they're doing. They're not going to have any expertise whatsoever."
Dr. Mims says OIG most likely audited him because he works in a narrow subspecialty in a part of South Texas where Medicaid patients don't have many other options for his particular services. He says his Medicaid billing volume makes him a statistical outlier, ripe for ensnarement.
"If every provider in my specialty … who is in a small group or solo private practice knew what the Medicaid OIG has the capacity to do to them, they would say, 'I am going to figure out a way to see fewer and eventually no new Medicaid patients.' It's that big of a problem," he said.
New Leadership, New Approach
Stories of physician problems with OIG's Medicaid audits have circulated for years. The agency gained a reputation for sometimes taking years to finish a case; using a maligned extrapolation method for determining overpayments that ballooned a physician's bill well beyond the amount the audit discovered; and placing holds on doctors' Medicaid payments while an investigation continued.
Through it all, doctors who dealt with OIG's attempts to recoup overpayments often said the agency wasn't at all transparent about exactly what OIG was investigating and/or its method of calculating overpayments and penalties. One such case involved San Antonio pediatric radiologist Milissa Aldridge, MD, whom OIG flagged in 2009 for involvement in 35 percent of her group's Medicaid billing. After Dr. Aldridge tried and failed to obtain the full story on why she was under scrutiny, OIG sent her a letter with a proposed settlement agreement in which she would pay more than $830,000. (See "Dr. Aldridge's Nightmare," July 2009 Texas Medicine, pages 29-34.)
In 2014, the Texas Sunset Advisory Commission released a scathing report on OIG that found:
The agency's fraud prevention and educational efforts were significantly lacking.
Its issuing of payment holds had "gone beyond the law's intent for use as an enforcement tool."
OIG took an average of more than three years to solve cases.
OIG recouped only $5.5 million of the $1.1 billion in alleged Medicaid overpayments the office identified in 2012 and 2013.
The report says OIG lacked the "structure, guidelines, and measurement of data" required to improve its investigations.
TMA commented on the report following its release, writing to Sen. Jane Nelson (R-Flower Mound), chair of the commission. In the comment letter, Dr. Holcomb wrote Medicaid regulations should be clear so physicians can focus on patient care, not "administrative hassles, burdensome audits, and fear of fraud and abuse accusations."
Dr. Holcomb also expressed TMA's belief that the best way to promote compliance and prevent improper payments is through education and outreach.
"Physicians must be afforded adequate notice of the alleged issues or violations, calculation of overpayments (including extrapolation methodology), and proposed sanctions or penalties, and the right to offer a meaningful response," he wrote.
More trouble for the agency quickly followed the sunset report. Numerous news reports prompted authorities to scrutinize HHSC's awarding of a Medicaid fraud software contract to Austin-based 21 Century Technologies Inc. (21CT). According to media reports, then-Gov. Rick Perry forced Mr. Wilson to resign last December, about a week after the resignation of Jack Stick, a deputy inspector general and HHSC's chief counsel. (Read more about the story on the Austin American-Statesman website.)
Just after he took office last January, Governor Abbott appointed Mr. Bowen as the new inspector general. Mr. Bowen won't comment on individual cases, but he's taken steps to overhaul the way the agency does business, including its controversial Medicaid audit process. He says upon assuming office, he was shocked to learn OIG was in the process of settling a case that dated back to 2003, the year of the agency's birth.
"The common theme I've heard from doctors, dentists, and those in the managed care community was that previous oversight practices failed to exercise sufficient due process in investigations and audits," Mr. Bowen said. "So I've emphasized to my staff that that must change."
In his efforts to transform OIG's culture and operations, Mr. Bowen brought with him nearly a decade of experience as the special inspector general for a mess even larger than OIG: the reconstruction in Iraq. He held that position from 2004 to 2013.
"That was oversight under fire, truly unique in that it required work in a very dangerous war zone," he said. "I'm applying some of the skills honed there to repair this particular agency."
He says since he's taken over, OIG has already resolved more than half of its investigative backlog of more than 1,700 cases and more than 90 percent of its legal case backlog, extending settlement offers for 214 of those cases. The settlements will potentially recover between $12 million and $15 million in Medicaid overpayments, OIG says.
Mr. Bowen says OIG would "settle all of those old cases one way or another" and take a variety of approaches to doing so, including closing them outright if they're meritless.
"On the investigation side, my new deputy identified quite a number of old cases that didn't have merit, and he's closed them all," he said.
He also dumped the old extrapolation method that had caused such hand-wringing over the years, replacing it with the U.S. Department of Health and Human Services' RAT-STATS extrapolation formula.
"It's in common practice across the country," Mr. Bowen said. "What results it might generate in any particular case are dependent upon the facts in that case. But the issue is not the results; the issue is the fairness of the tool and its validity in the oversight community. And … with regard to RAT-STATS, it's well-accepted as fair and valid."
Mr. Bowen hired new deputy inspectors general and created a new Inspections Division of the office. As part of the effort to make OIG more transparent, the office planned to release its first quarterly report in late September, set to include a strategic plan it developed over the summer. Mr. Bowen says all OIG reports, including audits and inspections, will be posted on its website.
"We have to be open about the kind of oversight we're doing, and we have to engage with the stakeholders so they understand what we are doing," he said. "So I've initiated a stakeholder outreach initiative, and that entails meeting regularly with providers and provider groups to get both their insight and assistance into what is in fact wrong with the Medicaid delivery system so that I can focus my investigators, auditors, and inspectors on the right targets."
In fact, Mr. Bowen met with TMA leaders during the legislative session, addressed members at TexMed 2015 last spring, and also planned to address the Border Health Caucus at the TMA Fall Conference in late September.
Sen. Juan "Chuy" Hinojosa's Senate Bill 207, which took effect Sept. 1, mandated the new quarterly reports, but the law does much more to address physicians' concerns with OIG investigations. In addition to explicitly stating clerical, technical, and administrative errors do not qualify as fraud, the new law strongly limits OIG's ability to place payment holds in non-fraud cases and limits OIG probes to 180 days. If OIG needs more time than that to complete its investigation, it must notify the subject of the investigation of the reason why, except in cases in which doing so would jeopardize the investigation.
Senator Hinojosa (D-McAllen) says investigators at the "dysfunctional" OIG were previously focusing on technical mistakes, rather than real fraud. TMA Practice Consulting can help physicians and their staff members take concrete steps to avoid billing and coding problems, including Medicaid billing. (See "Billing and Coding Help From TMA.")
"The cases would take, on the average, three years, and some as long as 10 years," he said. "I don't know if any health care provider can last three years of an investigation, much less 10 years, with holds being placed on them, without giving them reasons why the hold was placed. [OIG was] coming into their offices with gestapo-type tactics. They were rude and pushy and took all the files within a very short, unreasonable time period. So now we have a fresh start."
TMA pushed hard for passage of SB 207 during the 2015 Texas Legislature. See TMA's testimony to the House Human Services Committee.
Mr. Bowen says SB 207 supports the mission of the revamped OIG, and it's unfortunate that the agency previously treated an unintentional error as fraud.
"[Treating errors as fraud] shouldn't have happened," he said. "I'm interested in pursuing actual fraudsters."
Winning Back Doctors?
As positive as Dr. Holcomb is about the changes at OIG, he says he doesn't think a better audit and investigative approach would lead to a reversal of the state's Medicaid participation trend. TMA's biennial Survey of Texas Physicians has shown a sharp decline in Medicaid participation since 2000, when 67 percent of survey participants reported taking all new Medicaid patients. The latest figure is a dismal 37 percent. (See "Physicians Pass on Medicaid.")
"When [physicians] leave a program like either Medicaid or Medicare, they almost never go back, no matter what happens," he said. "So once you lose them, we believe that you've lost them forever. The real question is, can you stem further loss? In other words, we're already at [around] a third of the doctors seeing Medicaid patients; what would happen if you went down to only 20 percent of the doctors seeing them?
"So I think … that the pay structure is a significant problem, and it's presumably affected by adding more money into the system. If you then throw on top of these low billings the risk of having your money confiscated without due process, it's just not clear why anybody would want to participate."
Mary Dale Peterson, MD, the chief executive officer of Driscoll Health Plan, an HMO serving South Texas, says her staff members who work with OIG already have seen the office release a number of payment holds from old cases.
Dr. Peterson, who's a member of the Committee on Medicaid, CHIP and the Uninsured, says in the past, when Driscoll would refer practitioners to OIG for investigation of possible waste, fraud, or abuse, OIG would take an extended amount of time to complete its probe. That cost Driscoll hundreds of thousands in claims it shouldn't have paid, she says, until it finally could part ways with practitioners who didn't play by the rules.
"But that's the past," she said. "I have met the new director and deputy director, and they've met with TMA; they've met with our committee on Medicaid and the uninsured. I think they're willing to listen. They appreciate their role, I think, not just as an enforcer but as an educator. And where there's the opportunity to help physicians and other providers be compliant when it's really not fraud, I think they're willing to do that. That's a big change and a breath of fresh air compared with what we had in the past."
For his part, Mr. Bowen says he's looking forward to continued engagement with TMA.
"As a regulator, my team and I cannot do our jobs properly without the support and trust of the medical community," he said.