Note from the ACDIS Director: $188.1M Providence Health lawsuit has profound implications for CDI, healthcare

CDI Strategies - Volume 12, Issue 37

By Brian Murphy

The end of last week brought news of a lawsuit that appears to have broad and deep ramifications for the CDI profession. Providence Health & Services, a 34-hospital system headquartered in Renton, Washington, has been hit with a $188.1 million lawsuit for allegedly upcoding various diagnoses, including severe malnutrition, encephalopathy, and respiratory failure.

What makes this particular suit different from prior qui tam (more commonly known as whistleblower) complaints or formal CMS/Office of Inspector General (OIG) audits is that this suit was brought on behalf of a data analytics firm, Austin, Texas-based Integra Med Analytics LLC. Med Analytics is demanding a jury trial on behalf of the United States under the False Claims Act.

A read of the complaint seems to show that no chart audits have been conducted, but that the weight of the lawsuit rests largely on the incidence of diagnoses reported in publicly available data, via a proprietary analysis of claims information dating back to 2011. The lawsuit also notes that Med Analytics conducted interviews with former employees to bolster its case.

The story was reported by several national healthcare publications including Modern Healthcare and Becker’s Hospital Review. According to Becker’s, Integra discovered the unwarranted secondary codes during an analysis of Medicare claims dating back to 2011.

Integra said an investigation of the business practices of Providence and its consultant, J.A. Thomas and Associates, “confirmed that Providence’s false Medicare claims were not only intentional but were part of a systematic effort to boost its Medicare revenue.” The lawsuit specifically alleges Providence and its consultant were “pushing doctors to make unwarranted diagnoses” and “using leading queries to change doctors’ original diagnoses.” Integra claims J.A. Thomas and Associates’ proprietary software was also made to manipulate diagnoses.

According to news sources, the government has declined to join the litigation, and as of now the fate of the lawsuit is unknown. It’s possible it could be dismissed.

But industry experts are already talking about the “chilling effect” this case may have on the CDI profession as a whole. In an age of transparency, in which CMS is asking hospitals to publish their charges for services and procedures in order to help with patient choice and cost containment, will this leave hospitals and consulting firms vulnerable to additional, similar lawsuits? Should hospitals be targeted for audit if they are an “outlier”—i.e., report a higher incidence of a diagnosis than other hospitals in their peer group—when that higher incidence may be the result of compliant queries and rigorous physician education?

This case is a good reminder to review ACDIS’ published Code of Ethics to make sure you are following a compliant CDI practice. CDI queries should always be centered on finding the clinical truth and result in accurate depiction of a patient’s severity of illness. A leading query is one that is not supported by the clinical elements in the health record and/or directs a provider to a specific diagnosis or procedure.

ACDIS will continue to follow this case closely and address it in formally in the coming weeks.

Editor’s note: Murphy is the director of ACDIS. Contact him at bmurphy@acdis.org.

Found in Categories: 
ACDIS Guidance, Quality & Regulatory