Posted On Wednesday, March 3, 2021
By:
Takeaways:
- Hospitals that bill a high percentage of stays at the highest severity level, and those that have a high percentage of high severity stays based on a single diagnosis, should expect a higher level of scrutiny regarding their billing practices.
- It is expected that the OIG will continue to recommend that CMS conduct targeted reviews to identify stays involving upcoding and hospitals with patterns of upcoding.
The Office of the Inspector General (OIG) has issued a report finding that hospitals are increasingly billing for in-patient stays at the highest severity (most expensive) level. The report found that the number of stays at the highest severity level increased almost 20% from 2014 through 2019, highlighting concern that hospital stays at the highest severity level are vulnerable to inappropriate billing practices, such as upcoding. Based on these findings the OIG recommends that the Centers for Medicare & Medicaid Services (CMS) conduct targeted reviews of Medicare Severity Diagnosis Related Groups (MS-DRGs) and stays that are vulnerable to upcoding. The COVID-19 pandemic had no impact on these numbers, as these findings are based on data relating to “pre-pandemic” hospital care. As a result of this report, hospitals with a history of billing comparatively higher percentages of hospital stays at the higher severity level should expect increased government scrutiny regarding their billing practices.
The report analyzed Medicare Part A claims for in-patient hospital stays from 2014 through 2019. It identified trends in hospital billing and Medicare payments for stays at the highest severity level as determined by the MS-DRG. The OIG found:
- the number of stays at the highest severity level increased almost 20% from 2014 through 2019; and,
- the average length of stay decreased for stays at the highest severity level, while the average length of all stays remained largely the same.
Although the report acknowledged that shorter stays for care at the highest severity level are not inherently problematic, it expressed a couple of concerns:
- the increasing number of short yet high severity stays raises questions about the accuracy of complications billed by the hospital; and,
- 54% of the stays billed at the highest severity rate in 2019 reached that level based on just one diagnosis, even though most stays involve multiple diagnoses. The specific concern is that if that one high severity diagnosis was incorrect, the higher payment would not have been warranted.
OIG’s report did not find uniformity across the hospitals involved in the study. Overall, the report found almost 30% of stays at the highest severity level were particularly short, 5% of hospitals billed between 54% and 100% of their stays at the highest severity level with a comparatively short length of stay. With this finding in mind, those hospitals that bill a high percentage of stays at the highest level, and those that have a high percentage of high severity stays based on a single diagnosis, should expect a higher level of scrutiny regarding their billing practices.
Interestingly, CMS did not concur in OIG’s recommendation that CMS conduct targeted reviews of MS-DRGs and stays that are vulnerable to upcoding. CMS did acknowledge, however, that there is more work to be done to determine conclusively which changes in billing are attributable to upcoding. It is expected that OIG will continue to recommend that CMS conduct targeted reviews to identify stays involving upcoding and hospitals with patterns of upcoding.
The full report: Trend Toward More Expensive Inpatient Hospital Stays in Medicare Emerged Before COVID-19 and Warrants Further Scrutiny can be found here.
Posted On Monday, March 1, 2021
By:
On February 17, 2021, the Third Circuit affirmed the conviction of Christopher Rad of securities fraud, rejecting his claims that the prosecution had withheld evidence regarding one of its key witnesses at his trial. The Court’s non-precedential decision affirms the District Court of New Jersey’s denial of Rad’s motion to vacate his conviction and sentence under 28 U.S.C. §2255. Although the Court initially granted Rad’s application for a certificate of appealability, it ultimately found that even if the government had failed to disclose prior statements by one of its key witnesses, the evidence was not material. The decision reinforces the basic but strict rule that evidence is material for purposes of a claim under Brady v. Maryland, 373 U.S. 83 (1963) only when there is a reasonable probability that its disclosure would have produced a different result.
Rad was originally indicted in 2011 for his role in the use of spam e-mails as part of a “pump and dump” stock price manipulation scheme. The government’s theory was that Rad was the middle-man in a scheme that was executed through e-mail spamming. The evidence at trial included testimony by James Bragg, who testified that Rad hired him to send spam e-mails with false header information from falsely registered accounts. Bragg’s testimony was corroborated in part by numerous transcripts of Skype chats between the two. At the conclusion of the trial, Rad was convicted of one count of conspiracy to commit securities fraud through spamming and five counts relating to unauthorized access spamming. In the §2255 motion challenging his conviction, Rad claimed, among other things, that the government had failed to make disclosures of prior statements by Bragg.
Prior to Rad’s trial, Bragg had already entered a plea of guilty and had been sentenced in the Eastern District of Michigan and was awaiting sentencing in the District of New Jersey on a related spamming case. At the heart of Rad’s claim regarding Bragg was that the government had failed to disclose statements made by Bragg at his Michigan sentencing hearing in which he appeared to disavow having worked with Rad. Specifically, Bragg stated at his sentencing hearing that he did not work with someone whom Bragg referred to as “him” and did not send e-mails on that person’s behalf. Notwithstanding the apparent ambiguity in those statements, Rad insisted that Bragg’s reference to “him” was a reference to Rad. He argued that he could have used those statements to impeach Bragg’s trial testimony by demonstrating that Bragg had made prior statements that he and Rad had not worked together.
The Court rejected Rad’s claims on three essential bases: (1) Bragg’s credibility was already significantly impeached at trial by his criminal record and admission that he hoped for leniency; (2) the government acknowledged Bragg’s credibility problems at closing, and argued that the jury should not accept his testimony at face value, but instead should look to the corroborating documentary evidence; and (3) the jury found Rad not guilty of Counts II through IV of the indictment, which charged Rad with aiding and abetting Bragg’s illegal spamming activities.
In reaching its decision the Court applied the 3rd Circuit standard that a Brady violation occurs when a prosecutor suppresses evidence that is both favorable to the accused and material to the outcome of the trial, citing Dennis v. Sec’y Pa. Dep’t of Corr., 834 F.3d 263, 284-85 (3rd Cir. 2016) (en banc). Here it found that Rad’s claim failed to meet the standard for materiality, which requires a reasonable probability that the disclosure of the disputed evidence would have produced a different result. As a result, it refused to vacate Rad’s conviction and 71 month prison sentence.
The full text of the opinion can be found here.
