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Appeals Court Nixes Fraud Case, Affirms Health System's Coding & CDI Practices

Posted by David Fong on Jun 23, 2020 8:00:00 AM

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Last month, the United States Court of Appeals for the Fifth Circuit affirmed a lower district court decision to dismiss a False Claims Act lawsuit brought against a Texas-based hospital system. The lawsuit by a data analytics firm accused the health system of fraudulently using secondary diagnosis codes to increase its revenues over a six year period.


As reported by RevCycleIntelligence, in August 2019, United States District Court Judge David Ezra dismissed the case, deciding that the clinical documentation improvement efforts, including resources for physicians on coding for higher value complication or comorbidity (CC) or major complication or comorbidity (MCC) codes when diagnosing patients, were in line with normal schemes to improve hospital revenue through accurate coding of patient diagnoses. In his decision, Judge Ezra cited a CMS regulation that states that the agency does “not believe there is anything inappropriate, unethical or otherwise wrong with hospitals taking full advantage of coding opportunities to maximize Medicare payment that is supported by documentation in the medical record.”

The Fifth Circuit in its affirming opinion stated there was a "legal and ‘obvious alternative explanation’ for the statistical data" where the hospital system was simply ahead of the healthcare industry in implementing the Medicare reimbursement guidelines supplied by CMS. In its opinion, it cites hospitals were encouraged by CMS to develop clinical documentation improvement programs, similar to the hospital system, to “maximize reimbursement” consistent with the new payment incentives made by Medicare billing and coding changes.


Aviacode's certified medical coders are aptly qualified and experienced to provide quality coding services to ensure the optimal reimbursement. In addition, Aviacode offers experienced experts to help health systems on provider coding education and clinical document improvement to ensure that reimbursement claims are supported by the necessary documentation.


Topics: ICD-10, Medical Coding, HCC Coding, Pro-Fee Coding, Facility Coding, Outpatient Coding