UCHealth, the state’s largest medical provider $23 million deal The Colorado U.S. Attorney’s Office consulted with federal authorities over allegations of overbilling for emergency care services at its hospitals. It was announced on Tuesday.

The allegations allege that from November 1, 2017, through March 31, 2021, UCHealth hospitals automatically used the most expensive billing code possible for certain emergency room claims submitted to Medicare and TRICARE, the government health insurance programs for members of the U.S. military. and retirees.

The feds claim that using this billing code without proper justification violates the Fair Claims Act.

“Misbilling of federal health care programs drains valuable government resources needed to provide medical care to millions of Americans,” Assistant Attorney General Brian M. Boynton, chief of the Justice Department’s Civil Division, said in a statement. “We will go after healthcare providers who defraud taxpayers by knowingly making exaggerated or unsupported claims.”

UCHealth has denied wrongdoing.

“UCHealth is pleased to see the end of this lengthy and resource-intensive investigation,” UCHealth spokesman Dan Weaver said in a statement. “UCHealth denies these allegations, but we reached a settlement to avoid potentially lengthy and costly litigation. “The agreement allows us to focus our resources on providing excellent patient care.”

The complex world of hospital billing

The allegations delve deeper into the complex world of hospital billing. When a hospital wants to charge for a service, it uses a billing code to identify what the service is. Sometimes a single service may be charged under several billing codes, depending on the severity of the patient and the amount of hospital resources the care uses.

This is the case for assessment and management (or E&M) services in emergency departments. This is basically the price of going into the emergency room for treatment.

Emergency visits may be billed using one of five billing codes in Current Procedural Terminology, or CPT: 99281 through 99285. The first is for the least serious cases; It’s probably for cases that don’t need to come to the emergency room to begin with. The second is for the most violent — Critical situations with risk of sudden death.

The feds allege that UCHealth automatically charged a visit fee using CPT 99285 if healthcare providers checked a patient’s vital signs for more than the total number of hours the patient was in the emergency room. In other words, if a patient spent three hours in the emergency room and had their vitals checked four times, the Department of Justice claims UCHealth would automatically code it as a level 5 emergency room visit under CPT 99285. But this was not valid. For patients who stay in the emergency department for less than an hour.

The feds say UCHealth used the top-level code “despite the severity of the patient’s medical condition or the hospital resources used to manage the patient’s health and treatment.”

“The United States alleged that UCHealth knew that the automated coding rule for monitoring vital signs did not meet billing requirements to Medicare and TRICARE because it did not reasonably reflect the facility resources used by UCHEalth hospitals.” the office wrote in a news release Tuesday.

“We will hold accountable healthcare companies that adopt automated coding practices that lead to unnecessary and improper billing,” Colorado Acting U.S. Attorney Matt Kirsch said in a statement.

Growing concerns about “upcoding”

When hospitals request a billing code at a higher level than is appropriate, this is called “up-coding.” The practice has become a major focus for researchers trying to understand why healthcare costs are so high in the United States.

One Analysis published in 2019 It found that the percentage of emergency department visits coded using 99285 increased from 17% in 2008 to 27% in 2017, while use of the three least serious code levels decreased. One Analysis of Colorado claims data A study by the Center for Improving Value in Healthcare found that 99285 had become the top-billed E&M code in the state as of 2016, up from third place in 2009.

Another study found that 30% of the growth in Colorado’s spending on emergency services It was due to coding. The state had by far the highest spending per emergency room visit among the four states included in the analysis.

Price differences between codes can be significant. According to data collected by the government ColoradoHospitalPrices.comFor an emergency room visit at UCHealth University of Colorado Hospital with code 99281 — the least severe level — Medicare pays $85.89, while some private health insurers pay up to $700. For emergency room visit code 99285, Medicare pays $621.39, and some private health insurers pay more than $6,000.

Whistleblower complaint

Allegations of improper billing by UCHealth first came to the attention of the feds through a whistleblower complaint from a former UCHealth employee. An Arvada whistleblower named Timothy Sanders wrote in a 2021 complaint that he worked as a “revenue collection auditor” whose job was to resolve complaints from patients who believed they were overcharged.

Sanders said he discovered that an automated system was mistakenly billing patients under the number 99285, and that UCHealth officials not only knew about it but had no intention of doing anything about it.

“What Sanders learned was that if a patient filed a complaint, UCHealth would reduce their emergency room bill, otherwise UCHealth would take no steps to ensure that a particular emergency room bill was accurate,” the complaint filed by Sanders states.

Under federal law, whistleblowers are entitled to a share of the settlement money the government collects. Sanders will receive $3.91 million from the proceeds of Tuesday’s settlement, according to the U.S. Attorney’s Office.

UCHealth operates more than a dozen hospitals and hundreds of clinics in Colorado. It treats approximately 3 million patients in a given year. UCHealth was introduced More than $8 billion in revenue It stopped treating patients during the fiscal year that ended in June, according to an audited financial report filed with federal regulators. He made more than $500 million in profits from patient treatment.

Through investment gains and other sources of revenue, the health system generated more than $1 billion in profits last fiscal year.