Medical College of Wisconsin has agreed to pay $2.239 million in a settlement with the HHS Office of Inspector General (OIG) over anesthesia billing. The settlement stemmed from its self-disclosure to OIG.
OIG alleged that Medical College of Wisconsin submitted claims to Medicare, Medicaid, TRICARE and the Veterans Administration for items or services it knew or should have known were fraudulent. Specifically, OIG alleged that from Nov. 1, 2016, through Oct. 31, 2022, Medical College of Wisconsin billed for anesthesia with modifiers QK and QY “where physicians failed to perform and document the seven steps of medical direction as required by 42 C.F.R. § 415.110.” The alleged conduct subjects it to civil monetary penalties, according to OIG. Of the settlement amount, $1.493 million is restitution. Medical College of Wisconsin didn’t admit liability in the settlement.
Tennille Sifuentes, vice president of corporate compliance and risk management at the Medical College of Wisconsin, told RMC that "The concern was reported by a staff member via the compliance hotline. The concern raised was that the seven steps required to bill for medical direction were not being fully met in all instances. One example of this would be that in some instances, the anesthesiologists may have overly relied on the pre-anesthetic exam and evaluation by the CRNA as a replacement for their own comprehensive exam. The modifiers QK and QY can only be billed when all seven steps are fulfilled.” Sifuentes said the issue was addressed by making the following improvements: modification of the attestations and workflows in the electronic medical record to ensure accurate documentation of medical direction elements; developing a protocol to define the standard expectations the seven elements; providing medical-direction education at hiring and annually; and requiring anesthesiologists to attest they understand the medical direction standards. “One suggestion for considering and going through the OIG Self-Disclosure Protocol would be to work with an external attorney that has experience with the self-disclosure process. Our external attorney provided invaluable guidance through this process to ensure we investigated properly and developed a comprehensive disclosure document," Sifuentes said.
“From Medicare’s vantage point, it will pay different amounts depending on the level of work going on. For example, is the anesthesiologist directly performing, medically directing, or medically supervising the services?” said attorney David Vernon, with Hooper, Lundy & Bookman P.C. in Washington, D.C. “Steadfast compliance” can be challenging, but the requirements for each level of anesthesia work are spelled out pretty clearly in Medicare regulations.
The conditions of payment for medically directed anesthesia services are set forth in 42 C.F.R. § 415.110.[1] Generally, Medicare pays physicians for the medical direction of one anesthesia service or two to four concurrent anesthesia services (provided, for example, by a certified registered nurse anesthetist (CRNA) or resident) if the physician meets these conditions:
“(1) For each patient, the physician—
(i) Performs a pre-anesthetic examination and evaluation;
(ii) Prescribes the anesthesia plan;
(iii) Personally participates in the most demanding aspects of the anesthesia plan including, if applicable, induction and emergence;
(iv) Ensures that any procedures in the anesthesia plan that he or she does not perform are performed by a qualified individual as defined in operating instructions;
(v) Monitors the course of anesthesia administration at frequent intervals;
(vi) Remains physically present and available for immediate diagnosis and treatment of emergencies; and
(vii) Provides indicated post-anesthesia care.”
When physicians provide medical direction, their claims must include a modifier, depending on the circumstances. Here are the two modifiers relevant to the settlement:
QK: “Medical direction of two, three or four concurrent anesthesia procedures involving qualified individuals.” (If other modifiers are added to the claim, the QK modifier goes first.)
QY: “Medical direction of one qualified nonphysician anesthetist by an anesthesiologist,” according to the Medicare Claims Processing Manual.[2]
Vernon explained that “under medical direction, payment for the anesthesiologist services is based on 50% of the anesthesia fee schedule rate that would apply if the anesthesiologist directly performed the case.” He added that “medically directing four concurrent cases would result in 200% of the anesthesia fee schedule rate for an anesthesiologist who directly performs a case.” Physicians could run into trouble if they try to maximize their medical direction services, and their reimbursement, without fully satisfying 42 C.F.R. § 415.110, Vernon said.
Medical Supervision Is For More Than Four
Medical supervision of CRNAs and other nonphysician anesthetists is another story. It may be required if they’re providing more than four concurrent anesthesia services. In that case, CMS bases the physician fee schedule amount on an anesthesia-specific conversion factor and three base units. When they supervise more than four procedures, physicians append modifier AD to the CPT code.
There’s also a “special payment rule” for teaching anesthesiologists involved in a single resident case or two concurrent cases. The fee schedule amount is the same as if the anesthesia services were personally performed by the teaching anesthesiologist. “This special payment rule also applies if the teaching anesthesiologist is involved in one resident case that is concurrent to another case paid under the medical direction payment rules,” the rule states. “Modifier GC is added when the services are performed by a resident under the direction of a teaching anesthesiologist consistent with 42 C.F.R. 415.178,” Vernon said.
Vernon explained that “the special payment rule allows for a maximum of 200% of the personally performed rate when there are two concurrent anesthesia cases. It’s no mistake that CMS limited medical direction to four cases and the special teaching rule to two cases, given the reimbursement rates for the type of service.”
And anesthesiologists are paid directly when they personally perform the services (and attach modifier AA).
“Hopefully, if you have a client who appreciates the complexity of the issue, they start with a question and force you to dig in and analyze the nuances before they act,” Vernon said. “Trying to get permission from counsel rather than asking for forgiveness later and needing to do a self-disclosure” is preferable.
Contact Vernon at dvernon@hooperlundy.com.