American Academy of Emergency Medicine

Federal Judge Decides Against EPBS in Upcoding Trial

According to a report in the Oklahoma City Journal Record, a federal district judge has ruled that Dr. J. D. McKean, owner of Emergency Physician Billing Services (EPBS), overbilled Medicare by millions of dollars from 1992-95. Although no decision has yet been made on damages, the government is seeking treble damages of at least $90 million plus civil penalties totaling at least $1 billion for its claim against Dr. McKean's company, which handled Medicare billing for more than 100 emergency physician groups in at least 33 states.

The article explained that U.S. attorneys charged the Oklahoma City-based firm with upcoding emergency department medical service codes. The government claimed the upcoding resulted in falsification of claims made to federal health care programs from 1992-95. The Department of Justice estimates that EPBS submitted as many as 12 million claims during that time period. Audits conducted on 1,300 claims during that time demonstrated falsification, the government argued.

In making the ruling, the federal judge cited a videotaped training session from 1995 in which Dr. McKean said documentation of services rendered to patients for reimbursement by Medicare and other health programs was "just a red tape crap issue."

The defense contended that the time period in question occurred during an "educational window" when coding practices were in a state of flux. Regarding this "educational window," the judge wrote: "Clearly the Health Care Financing Authority understood that the change in codes (implemented in 1992) would require some time and training before the desired consistency would be achieved. However, no document or verbal communication, either directly or by implication, excuses a good faith attempt to comply with the new E/M codes. The court finds it abundantly clear, from the testimony, writings, and videotaped presentations of Dr. McKean, that his intent was to get what he could by fair means or foul, and if caught to shift blame to the confusion created by the new CPT (current procedural terminology) codes."

Founded in 1982 by Dr. McKean, EPBS grew to nearly 500 employees processing millions of patients' visits per year. The non-jury trial stemmed from a case initially filed under seal in 1994 by Theresa Semtner, a former nurse and billing coder for EPBS. U.S. attorneys intervened in the action the following year. After Semtner died in May 1996, Kevin K. T. Trim, Semtner's personal representative, took her place in the case as co-plaintiff with the U.S. government. The False Claims Act includes a whistle-blower provision allowing private citizens to bring actions under the federal law. Semtner's estate may receive up to 20 percent of the total recovery.

AAEM Viewpoint

by Robert McNamara, MD FAAEM

Let me take you on a brief foray down memory lane. In 1997 AAEM vigorously fought to open the books for EPs in the HCFA flap over reassignment to contract groups. ACEP fought equally hard in the opposite direction as indicated by the following quote from then ACEP President Larry Bedard's March 3, 1997 letter to Bruce Vladeck, head of HCFA. "Given…the lack of any evidence that groups which use independent contractor physicians are billing abusively or fraudulently, we [ACEP] continue to hope that HCFA finds a way to allow independent contractor physicians to assign their benefits to emergency physician medical groups." A similar quote appeared in the August 1997 issue of EM News, dedicated to the HCFA flap.

Now look at the above story and point your browser to www.epbs.com and read the following quote from that site. "Dr. McKean, the company founder, has served ACEP for many years in numerous capacities, including Vice President, Chairman of the Governmental Affairs Committee, and Chairman of the Finance Committee." So just what was going on here in 1997? I was aware of the EPBS suit and so were many of you. We were also aware of a major settlement ($8.5 million) by a large CMG related to this case. Why did ACEP use the above argument to try and keep the rank and file EPs from having access to what is billed and paid on their behalf? I guess we must believe that ACEP and Dr. Bedard lost all track of this issue with Dr. McKean.

Here is the bottom line from Texas Medicine, October 1998. "When an Arlington emergency physician turned his billing over to an Oklahoma-based billing service in 1990, he never dreamed that he'd be involved in a U.S. Department of Justice lawsuit and become personally liable for thousands of dollars [$50,000] in overcharges the company is accused of submitting to the government." Signed up in 1990, eh? I wonder if he was lured by the ad in the September 1990 Annals of EM (p. 62-3) where Drs. Bock and Stennes, the 1983-4 and 1985-6 ACEP Presidents, respectively, were pictured along with Dr. McKean promoting EPBS.

If this doesn't wake you up to the problems in EM and the collective effort to keep the rank and file "dumb and down on the farm," nothing will. Listen carefully, what AAEM has told you is CORRECT, things are not "peachy clean" in EM. There is a large, for-profit billing/management industry feeding off of your efforts. It cannot be ignored as you personally are liable for fraudulent

billing. You must demand access to the books of account. Just as importantly, when you see those books you can make sure you are not being subject to illegal fee-splitting. Contact us if help is needed.

I find no particular joy in saying "we told you so." Retractions from the opposition are now being accepted on behalf of the docs in the pit.