Aetna, CIGNA cases put different spin on claims fraud.

WASHINGTON -- Recent lawsuits against Aetna, CIGNA, and other insurers have put an entirely different spin on reimbursement issues, John Hartwig said at a forum sponsored by the American Health Lawyers Association.

Much of the federal government's work on health care fraud has centered on what the providers are doing, said Mr. Hartwig, a former deputy inspector general for investigations at the Department of Health and Human Services. "When you look at some of the issues [these suits] have raised, they're really the reverse of what the issues have been with providers for the past 25 years."

For example, one allegation in the suits has been that the insurers are routinely "downcoding" provider claims--reducing the level or intensity of the service performed to a lower level, and therefore a lower payment. "But all I heard about as a federal agent was [physician] 'upcoding'" of claims for a higher payment, said Mr. Hartwig, senior manager for dispute consulting at Deloitte & Touche, Philadelphia.

Similarly, the suits allege that the insurers routinely "bundled" unrelated services together to provide less reimbursement. "For 25 years at the federal government, we probably had an 'unbundling' project every 6 months," he said.

These cases turned health care law on its head in other ways as well, said Bruce Goldstein, a health care attorney in Berwyn, Pa. In general, provider contracts are "nightmares" to deal with, but one thing is abundantly clear: If the contract clearly states that the insurer must pay the provider for services rendered and then the insurer doesn't pay, "that's a cause of action for a breach of contract. That is what the Aetna case and the CIGNA case are all about. They're class action breach of contract suits," he said.

When a physician gets a down-coded claim back from the insurer. "everybody knows that that claim has been processed by a computer," Mr. Goldstein said. "You want to tell me that the computer knows, based on the data in a CMS-1500 form, what was done? Of course the computer doesn't know what was done. So how can it make the determination to downcode? It can't."

Insurers also use medical records to delay claims, he continued. "First they don't look at them to downcode, and then, when you appeal, they say, 'Well, we need the medical records. Send them in.'"

This systematic way of slowing claims payment is what gives rise to grounds for a lawsuit, he said. "Typically, the pattern one sees is that a series of claims are altered or modified or denied through an automated claims processing system, and then when you appeal those claims, that's when they ask for medical records, which further delays the payment."

Insurer policies can also come under the federal False Claims Act, Mr. Goldstein said. "Medicare carriers are paid by the government to process claims. Those contracts have standards in them, and they have to meet those standards. When they [don't process claims quickly], they're not adhering to those standards. That gives way to a whole new arena for False Claims Act cases."

However, prosecuting a False Claims Act case involving Medicare is difficult because it's hard to show how the government was harmed by the payment delays. "I do believe there's harm to the government because the government arranged to get care for these beneficiaries" but didn't get all the services it contracted for, such as the proper claims processing, he said.

BY JOYCE FRIEDEN

Associate Editor, Practice Trends