Key Takeways: Documentation, Documentation, Documentation!

The largest health system in southeast Texas has agreed to pay $1.9 million to resolve allegations that between 2009-2014 the system billed Medicare for surgeries performed on an inpatient basis that could have been performed as outpatient or observation.

Without knowing more than the details released by the U.S. Attorney or the response from Memorial Hermann leadership, it's a pretty good guess that the lesson other healthcare providers can take away from this is the same as other cases involving use of observation status versus inpatient admissions. Ensure the documentation supporting the medical decision making is explicit and clearly supports the services rendered, or in the case of planned surgeries or admissions, clearly supports the rationale for the place of service. This is especially important for any service that Medicare allows to be performed on an outpatient basis. A close reading of the CMS policies in respect to observation services, for example, is full of caveats regarding professional judgement.

Beyond documentation, the Memorial Hermann case is just another case for compliance leaders to cite when justifying the ROI in their FY19 budget line items pertaining to proactive, internal clinical documentation and coding/billing audits.