By Christopher A. Parrella, Esq., CPC, CPCO, CHC, Healthcare, Attorney, Boston, Mass. Published on September 15, 2023

Introduction
The recent settlement between the United States and Frederick Oncology and Hematology Associates, P.C. (FOHA) in Maryland has brought to light the pressing issue of accurate billing in healthcare. FOHA paid $850,949 to settle allegations of submitting inappropriate claims for evaluation and management services to federal healthcare programs. This case serves as a vital reminder to healthcare providers about the importance of compliant billing practices, particularly concerning the use of Modifier -25.

What Happened?
On September 12, 2023, the U.S. Attorney’s Office for the District of Maryland announced that FOHA had reached a settlement agreement with the federal government. The practice was alleged to have improperly billed evaluation and management services from January 1, 2013, to November 1, 2017. Specifically, the claims included a code modifier that is only appropriate when a separate and distinct evaluation and management service is performed on the same day as another procedure or service on a patient.

What is Modifier -25?
In medical billing, Modifier -25 is used to indicate that a patient’s condition requires a “significant, separately identifiable evaluation and management service” on the same day as another service or procedure. The modifier allows providers to bill for both the procedure and the extra evaluation and management service. However, the latter must be outside the usual pre- and post-operative care connected with the procedure.

Why This Case Matters
The FOHA case illustrates the federal government’s continued focus on healthcare billing compliance. Notably, the U.S. Attorney’s Office employed dedicated resources to review Medicare billing data, thereby actively seeking out potential irregularities. With agencies increasingly leveraging data analytics to identify non-compliance, healthcare providers must be more vigilant than ever.

Best Practices for Using Modifier -25

• Documentation: Keep comprehensive and accurate records that clearly delineate the separate and distinct evaluation and management services provided.
• Training: Make sure your billing and clinical teams are well-versed in when and how to use Modifier -25.
• Regular Audits: Periodically review your billing practices to identify any potential compliance risks.
• Legal Consultation: If in doubt, consult with a healthcare compliance attorney to review your billing procedures.

Conclusion
The FOHA settlement serves as a cautionary tale about the critical importance of compliant billing practices. Healthcare providers must understand the nuances associated with using Modifier -25 and other billing codes. Failure to do so not only risks significant financial penalties but also undermines the trust that is fundamental to healthcare provision.

For providers looking to bolster their compliance programs, now is the time to act. Review your practices, train your staff, and seek expert advice to ensure that you are meeting all federal billing requirements.

Disclaimer: The information provided in this blog post does not constitute legal advice. Healthcare providers should consult with a healthcare compliance attorney for advice on their unique circumstances.