Mediating An Electrophysiology Dispute (With Bias)

DrRich | June 7th, 2010 - 6:41 am


A minor dispute – and an extraordinarily (almost disturbingly) polite one – has developed between the only two other electrophysiologists, that DrRich knows of at least, in the blogosphere. DrRich, being the third, ought to weigh in – not because his “vote” would break the tie, but because (as always) DrRich knows best.

Dr. Wes started it all off with a post noting, with some degree of dismay, that “(b)oth the Department of Justice (DOJ) and the Recovery Audit Contractors (RAC) are focusing investigations on Medicare billing for implantable cardiac defibrillator (ICD) surgery.”  Wes, with an appropriate degree of paranoia, concludes,”Consider yourself warned, criminals,” then recalls the halcyon days when the prospect of spending time in court conjured up for physicians nothing worse than malpractice suits.

Dr. John M. counters with a post whose purpose is to “welcome the upcoming policing of cardiac device implants.” John goes on to chronicle several examples he has witnessed of physicians implanting ICDs when, clearly, they should not have. The investigations of ICD implants by the Feds – and their private counterparts, the RACs – John posits, will serve to root out the bad eggs.

To his credit, John allows right off that his post is published “at the risk of exposing my naivete.”

To which DrRich replies, “Indeed.”

When DrRich was young, his grandmother, an immigrant from the Old Country who never shed her rustic habits, and not owning a motor vehicle, kept an illegal henhouse in her garage, buying the silence of her neighbors with eggs. It was from her that DrRich learned that if a rooster is behaving badly – engaging in hen abuse, for instance, or perhaps chasing grandchildren around the yard – one does not deal with it by sending Uncle George’s pit bull into the henhouse to take care of the offender. While the nasty rooster (never one to avoid a confrontation) might well be taken down, so would a lot of innocent bystanders.

John, you are laboring under the charming delusion that the purpose of these new investigations is to carefully review ICD implants and tease out only those unethical and/or poorly-trained device implanters, who are clearly and habitually engaging in untoward medical practices. If this were the case, then you and Wes and all those other honest EPs would have nothing to be concerned about, and the audits would indeed make the world a better place.

But alas, DrRich must tell you otherwise.

First, he urges you to read about his own experience. DrRich is a bit older than you, John, and was around the first time the Feds decided to conduct such an “audit” of ICD implantations. DrRich – like you, as pure as the driven snow – was absolutely certain he had nothing to worry about. But as matters unfolded, the fact that DrRich is not today writing this blog from a federal prison (do they let you do blogs in the penitentiary?) is more a matter of luck than anything else.

This new “audit” is much more intimidating than the one DrRich endured. That one was done by the relatively benign Office of the Inspector General (part of HHS). This one is being done by the Justice Department. So if they finger you, you are by definition, as Wes suggests, a criminal.

DrRich has talked about the Regulatory Speed Trap many times. Regulations inevitably become obtuse by evolution if not by design, so that, if you are practicing medicine, it is likely that somewhere – in the hundreds of thousands of pages of indecipherable and self-contradictory Medicare regulations – you are guilty of failing to comply with a regulation somewhere or other, and thus are guilty of healthcare fraud – which is a federal crime. The only thing that likely separates you from a convicted (or, more likely, self-confessed as part of a plea bargain) criminal is that the Feds haven’t decided to “audit” you yet.

The Feds know this, of course. The fact that they know it is documented in a recent GAO report entitled “Improvements Needed in Provider Communications and Contracting Procedures.” The GAO report notes that the bulletins which Medicare carriers are required to send doctors periodically (to make sure they understand the regulations) are filled with dense, lengthy and poorly organized prose sufficient to make them unreadable. Even if they were readable, the GAO continues, these bulletins would do doctors little good since they routinely announce new regulatory policies well after the implementation date, when doctors will already have been guilty of violating such policies (and thus committing fraud). Finally, the GAO finds that when confused doctors contact the Medicare call centers for clarification on the regulations, they get the correct answer only 15% of the time. (Even the IRS does substantially better than that.) And the Medicare websites, required under the regulations to clarify everything for the providers, universally lack “logical organization and navigational tools,” and as a consequence are nearly unusable.

So even when a doctor prospectively asks for instruction on how to comply with Medicare regulations (so as to avoid committing healthcare fraud and incurring huge fines and jail time), nobody is able to give him/her a straight answer. For, while it’s easy to look at a provider’s actions retrospectively (as the auditors are about to do), and find something in the dense regulations that makes those actions imperfect, it’s not so easy to tell providers ahead of time how to navigate those regulations in pristine fashion. As the GAO report reveals, nobody knows how to do that.

Now, DrRich is not calling the DOJ evil. The Feds are not being evil when they set out to conduct audits of physicians’ compliance with uninterpretable regulations; indeed, from their way of looking at it they are being humane.

They are only doing what they have to do, which is find a way – any way – to reduce healthcare costs. In this instance they do not really want to label hundreds or thousands of electrophysiologists as criminals, and ruin their careers and their reputations and their lives. They just want to ruin a few, and make sure the other ones know about it. This limited-bloodshed approach will accomplish their goal, which is, to make all the other electrophysiologists think twice (or thrice) before using ICDs again, in anyone, ever.

But in this instance it gets even worse. With this audit, in addition to dealing with the relatively-restrained Feds, electrophysiologists will also be dealing with the slavering RACs.

The RACs are a fun tidbit brought to us by the Medicare Prescription Drug Act of 2003. Under the RAC initiative, private contractors are to be sent out to perform audits of billing already done by insurers, health plans and physicians. The objective is to find “overbillings,” which the providers will have to repay along with penalties. Further, the act explicitly allows for prosecutions to be brought for “fraud and abuse,” even if the providers have repaid any overbillings.

The purpose of the Recovery Audit Contractors is, well, recovery. During the 3-year pilot of the RAC initiative, which took place in only 3 states, over $300 million were recovered. This wonderful success is the reason RACs are being turned loose elsewhere.

The RACs are paid by commission. Essentially they are bounty hunters, and they get to keep 20% of whatever they collect. According to the Associated Press, hospitals and providers are just a tad worried that these contractors, being so generously incented, will prove a little overzealous in their enthusiasm to find fraud. But worried auditees should not look for sympathy from the public. “A little zealotry is what we’re looking for on the part of the taxpayers,” said Leslie Paige, spokeswoman for Citizens Against Government Waste. “We think it’s about time.” Indeed – everybody can get behind fighting fraud, which is what makes the fraud gambit such a powerful tool for covert rationing.

DrRich surmises that it is good to be a RAC, and thinks you should consider buying stock in these companies, if you can. These outfits are about to harvest the vast bounty of obfuscation that Medicare has been carefully cultivating in its regulations for over 40 years, and has been carefully fashioning as fraud-traps for a somewhat shorter period of time. The RACs see the vast herds of physicians (violators one and all) placidly grazing all across the fruited plains, just waiting to be harvested. Their chief problem will be in pacing themselves; showing some restraint so they don’t use up their resources all at once.

And so, in addition to the dogged, officious, unsympathetic countenances of the lawyers employed by the DOJ, electrophysiologists this time around can also look forward to seeing the leering faces of the RACs’ commission-drunk forensic accountants. Electrophysiologists will experience the worst excesses of both worlds – the excesses of the state, and the excesses of unfettered for-profit outfits.

John M. can welcome this if he wants, and DrRich will wish him the very best good luck. DrRich, though, is still a little shell-shocked 15 years after his own encounter with federal audits of medical practices, and is very glad he’s only a spectator, and not a participant, this time around.


Now, read the whole story.

DrRich explains it all in, Fixing American Healthcare – Wonkonians, Gekkonians and the Grand Unification Theory of Healthcare.

Now on Kindle!

5 Responses to “Mediating An Electrophysiology Dispute (With Bias)”

  1. DayOwl says:

    This is disturbing for a number of reasons:

    1. This could be viewed in itself as a form of theft or breach of contract.(Medicare says it will pay so much for a service or product, then backs out on the promise later.) It will eventually lead to higher prices in the health care markets.

    2. Unproductive players are taking resources out of the system. Instead of funds being put to use improving and saving lives through medical services, they are being diverted to parties who provide nothing in the way of value in services or products for health care consumers.

    I wonder if the “recovered” funds make their way back to Medicare accounts, or do they end up being used in other ways?

  2. Bob says:

    Rich, I honestly see this as an example of overt rationing, with which I don’t have a problem.

    At our hospital, we did some research when we first heard about these letters coming from the DOJ. We learned that neither the ACC nor the Heart Rhythm Society appears to have any objection to the current CMS coverage regulations. Those regulations are also pretty clear for a CMS product, with a minimum amount of the usual CMS vaguely-phrased gotcha bait.

    And, it’s also quite possible to give the patient an ABN which will make the patient responsible for the cost of a device for which CMS has determined it will not pay.

    So… physicians are free to practice as they wish. If they implant the device under the government’s rules, the government will pay. If they implant the device outside the government’s rules, the patient will pay.

    In a world without unlimited resources to cover unlimited demand for health care, isn’t this the way we need to go??

    • DrRich says:


      I agree entirely with your sentiments, but I think we’re making different points.

      Never mind what you think CMS regulations say about ICD implants. The Feds have shown their enthusiasm for prosecuting for mere minutia (which they will find in other passages of the regulations than you think), and if the Feds aren’t interested in doing that, you can be sure the RACs will (since they only get paid if they find violations). Once the auditors walk in the door, you are screwed.

      Further, at least where Medicare patients are concerned, if doctors provide any service that Medicare does not cover and bills the patient, that’s now a violation – and constitutes healthcare fraud. Please, please don’t do that. Here’s a post that describes what Medicare has done in this regard.

      Be careful out there.


      • Bob says:

        Rich – I looked at the link to your previous blog post.

        In this particular case, CMS is telling providers that an implant which does not color between the lines is NOT COVERED.

        If there is a current federal law which forbids any provider from billing the patient for a non-covered service, please enlighten me.


      • DrRich says:


        It’s in the link. Balanced Budget Act of 1997, Section 4507: If a doctor provides even one self-pay medical service to a single Medicare patient, that doctor is punished by complete banishment from the Medicare program for at least two years.

        Rationale for this law? According to the Feds, it’s to avoid “a system whereby the rich can buy what they want and those many beneficiaries who are on fixed income will not be able to afford those services.” (See: United Seniors Association et al. v. Shalala)

        I would urge you to read my entire series of posts on “limiting individual prerogatives in healthcare” (column 2 of the homepage of this blog). This is actually the fight we should all be bracing for.


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