Provider's lack of documentation supports finding of excessive fees

In Kansas, a medical provider who uses a flawed method of assigning billing codes and lacks supporting documentation can be found to have charged excessive fees.

Case name: OHS Compcare v. KASB Risk Management Services, No. 105,416 (Kan. Ct. App. 02/24/12, unpublished).

Ruling: In an unpublished opinion, the Kansas Court of Appeals held that a medical provider charged excessive fees for its services.

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What it means: In Kansas, a medical provider who uses a flawed method of assigning billing codes and lacks supporting documentation can be found to have charged excessive fees.

Summary: A medical provider filed a claim because three insurance carriers refused to pay the full amount that it billed for medical services it provided to seven injured workers. The insurers' auditor recommended "downcoding" the provider's billing codes, which resulted in a reduction of the provider's fees. The audit determined that the level of examination and complexity of medical decision-making did not justify the provider's billing codes. The Kansas Court of Appeals held that the provider charged excessive fees when it inappropriately inflated medical billing codes.

The court said that while there was evidence that the provider complied with the Centers for Medicare and Medicaid Services guidelines, there also was evidence that it did not comply with the guidelines. The statute provides no definition of an "excessive" fee and no method for computing whether a fee is excessive. The court said that a hearing officer found that the provider's method of assigning and reviewing codes was "fundamentally flawed and lacked documentation." This inflated the charges beyond what was proper.

The court said that an independent review team, consisting of a physician reviewer certified in occupational medicine, a billing coder, and a nurse found that the documentation did not support the provider's codes. The team analyzed each case and compared the coding to the current procedural terminology book. The court pointed out that the provider had a financial incentive to inflate its coding.

Contrary to the provider's arguments, the court found that the statute on excessive fees was not unconstitutionally vague or unconstitutionally applied.

Read more at the WorkersComp Forum homepage.

May 3, 2012

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