An Indiana podiatrist claims he was forced to close his medical practice
because Medicare refused to reimburse him for legitimate claims,
WorldNetDaily has learned.

Dr. Willie F. Ray, who says “95 percent” of his practice was made up of
elderly patients, says that because his federally contracted Medicare
insurer has stalled his reimbursement payments since January, he has been
forced to close his office, leaving his dozens of patients without proper
foot care.

Ray said Medicare has reimbursed about $1,000 worth of claims from his
office since the beginning of the year, but “literally tens of thousands of
dollars in legitimate claims” remain unprocessed. He said the agency instead
“keeps sending me letters requesting more information, which I send,” but
that officials so far have failed to issue payments.

At issue, Ray said, was the system of “billing codes” physicians must use
to classify medical conditions. Medicare reimburses doctors based on the
codes; mistakes can delay payments, and Medicare often audits claims made by
physicians to ensure proper coding. Incorrect coding can lead to reduced
payments, withheld payments, fines and — in the worst cases, where fraud is
suspected — even jail.

Physicians and health-care providers can also be held liable for
“undercoding” — or undercharging — patients, as well as “overcoding” — or
overcharging — them. Physicians can be jailed or held liable for huge fines
— as high as $10,000 — for each occurrence.

Health-care professionals told WorldNetDaily that many auditors sent to
examine the coding procedures of physicians and health-care providers have
no medical background.

“They’re told to go in and look for specific numbers or codes, and if
they don’t find them, then the doctor is in trouble,” said one source who
asked not to be identified.

“Also, in some cases, even if the staff goofs up and enters the wrong
code — without the physician’s knowledge — that doctor is held liable and
the staffer is not,” the source said.

In Ray’s case, he said the codes he has submitted to Medicare since
January were “essentially unchanged” since they were defined in 1998.
Consequently, he said, “I can’t understand why [Medicare] is stalling or
refusing to pay claims for this year.”

Ray said his Medicare claims were audited “all of last year and about
two-thirds of this year.” He was paid last year, he said, but “this year
they seem to have zeroed in on about three codes.

“Even though we have all the criteria for [Medicare’s codes], they just
don’t want to recognize them and pay them,” he said, adding that he had been
audited “10 of the last 13 years.” In one case, Medicare asked for $6,000,
which Ray paid but said wasn’t owed.

“I finally got it back after considerable hardship a year later,” with no
interest added, he said.

Worse, Ray explained, “every time they audit me, it’s a thing where I
have to close down for about three to five days, go around to all the
nursing homes and collect the data, photocopy it, then send it all in.”

Medicare payments are handled by the

Health Care Financing
a division of the U.S. Department of Health and Human Services.

A spokesman with HCFA in Washington, D.C., told WorldNetDaily he could not speculate as to why Ray’s claims weren’t being paid.

“If he’s having a problem, he should take it up with his contractor,” said Craig Pulaski, a spokesman with HCFA’s press office. “I’m not able to get into any details about a particular physician’s problem.”

Asked about a general situation where Medicare would suddenly begin to reject claims made by physicians using the same codes that have been approved before, Pulaski said, “I really couldn’t speculate about that. Codes for what?”

Pulaski said physicians use billing codes established by the American Medical Association, and are paid through insurance companies that contract with Medicare.

When pressed to describe the generalities surrounding Medicare claim rejections, Pulaski was ambiguous: “I just simply don’t know. The circumstances are too case-specific for me to speculate.”

Nevertheless, the Health Care Financing Administration issued a letter to all 800,000 of the nation’s physicians, medical suppliers and home health agencies June 1 asking for their “help in assuring that Medicare pays correctly for their services.”

In the letter, HCFA Administrator Nancy-Ann DeParle cited some of the most common payment errors and urged doctors and other health-care providers “to prevent such errors by providing adequate documentation.” She also said HCFA planned to establish a new toll-free hotline for health-care providers with Medicare questions, adding that the agency would “test new, simplified guidelines for physicians to use when evaluating and managing patients.”

“Doctors share our interest in making sure that Medicare pays correctly for the covered care that they provide to Medicare beneficiaries,” DeParle said in her letter. “By working together to explain Medicare’s requirements and prevent common errors, we will build on our progress and better serve beneficiaries and taxpayers.”

The letters, the agency said, “are the latest step in … ongoing efforts to pay providers correctly while preventing waste, fraud and abuse in the Medicare program.”

The statement said such measures have reduced Medicare’s payment error rate to almost half of what it was in 1997.

“Although Medicare pays virtually all claims correctly based on the information submitted, improper payments occur for reasons such as insufficient documentation, lack of medical necessity, and improper coding by providers,” the statement said.

Dorman Cordell, a senior scholar at the

National Center for Policy
a public-policy think tank, told WorldNetDaily that Medicare routinely rejects claims for the flimsiest of reasons.

“Physicians are having to hire a tremendous number of people nationally just to pursue insurance payments,” Cordell said. “Some have even begun to set up practices where they don’t accept any insurance payments — from private insurers or Medicare.”

Insurance companies “will kick back any kind of claim, as long as there is some reason — some minor reason, even — to deny the claims, such as submitting the wrong code,” he said.

The answer, the policy center suggests, is “for people to be allowed to have their own medical savings accounts.” Such accounts, Cordell said, “allow persons to pay for medical care directly, and leave the insurance companies to pay for catastrophic occurrences instead.” Such payments “could also supplant Medicare payments,” thus freeing a medical consumer from the constraints and procedural hurdles often presented by insurers.

“Most physicians who deal with Medicare are in trouble with payment,” agreed Tampa, Fla., physician Dr. Donald J. Carrow, M.D., well known through his popular, nationally syndicated radio program, “Here’s To Your Health.” “This is true for most family or general practitioners, but not for the specialist. Medicare does cover specialists, but at a rate that induces the physician to inflate the value of their service or to cheat.”

Dr. Jane Orient, executive director of the

Association of American
Physicians and Surgeons,
told WorldNetDaily her organization also has received many complaints from physicians and health-care providers about the cumbersome payment process — or outright non-payment — for services rendered under Medicare. “Medicare denies claims for no reason at all and they demand, repeatedly, redundant documentation from physicians, which I think is just a delaying tactic,” Orient said. “They don’t necessarily want to deny the claim — they just don’t want to pay it,” she said, “so they’ll require doctors to send in boxes of information, but there’s no evidence that anyone ever reads it.” A day after WorldNetDaily spoke to HCFA officials in Washington, Ray said his local Medicare insurance contractor,

AdminaStar Federal,
contacted him. A spokesman from the company’s Provider Relations division said the firm would “get to the bottom of all this” by mid-week. AdminaStar is a subsidiary of

Anthem, Inc.,
an Indiana-based mutual insurance company.

Ray said AdminaStar has been his HCFA contractor for a number of years. Nine years ago, during one of his two audits that resulted in fines, he met with representatives of the firm in a building he described as being surrounded by electronic surveillance equipment and manned by armed guards.

Stranger yet, he said, is the apparent secrecy surrounding the company.

“In all the times I’ve talked with them over the phone, representatives never give me their full name, and they never tell me where they are physically located. They say it’s for ‘security reasons.'”

Candy Arnold, another spokesman for HCFA, said in a separate interview that she, too, could not provide “details” about a case of non-payment of claims without examining all facets beforehand.

Arnold, who said she had been with HCFA for eight years, said she had never heard of an instance where a physician provider had claims rejected by a Medicare contractor for the length of time Ray has been affected.

“I can tell you that since October [when Arnold became a public relations spokesperson for HCFA], this is the first time I have heard of someone not being paid for a year for absolutely no reason,” she said. “But I don’t know that this is for no reason. I really doubt that is the case.”

WorldNetDaily attempted to contact a spokesperson for AdminaStar or its parent company, Anthem, to answer charges surrounding Ray’s claims. No phone calls were returned, however.

A spokesman for the American Medical Association, who asked not to be identified, said Ray’s story is not atypical.

“We generally term this kind of issue as a ‘prompt payment issue,'” the spokesman said. “There have been occasions where we have had significant amounts of trouble with an individual [Medicare] carrier. All of a sudden there will be some sort of change in the proper coding of a carrier, [who then fails to] educate physicians properly about how to code their claims.”

The spokesman went on to say such occurrences “were not unusual,” adding that there were many “different ways” companies have been “going out and reviewing claims.”

He added that the American Medical Association feels that, based on research, “delayed payments by managed-care companies and other health insurers are a national problem, not just a local problem.”

The spokesman said a recent survey conducted by the AMA involving 16,000 physicians and 250 health plans showed that “typically, on the average, payments [by insurers] are made 120 days late.”

Neither Health Care Financing Administration spokesperson would address the issue of late payments in a general sense with WorldNetDaily.

Ironically, the AMA spokesman said, the “cost-savings that the managed-care companies are seeing by catching improper codes through enforcing — via strict or sometimes heavy-handed business practices” — are overshadowed by the added expense of compliance borne by physicians.

“It’s costing physicians — and eventually is adding to the cost of the health-care systems — about 20 percent more because they have to hire extra staff to deal with the red tape,” the spokesman said.

“Medicare operates on about a hundred thousand pages of regulations. Many physicians related their dealings with Medicare and HCFA to having to deal with the IRS,” the spokesman said.

To HCFA’s credit, the American Medical Association source said, the agency “does give instructions to the carriers to remedy problems, to get them fixed. But is that followed all the time by the carriers? No — it’s a big bureaucratic system, and it has to get to the right person.”

The AMA spokesman said HCFA was also trying to circumvent physician judgment by using medical records.

Patient records, the spokesman said, “are tools for physicians made by physicians for doctors, to ensure the continuity of care.” However, HCFA, “in recent years, is starting to nickel and dime physicians by trying to take the medical record and transform it from a tool used by physicians into something that can be used by a lay person — a bean counter. That really doesn’t work. What two physicians can discuss and transmit to each other … would take significantly more text and detail” to translate for laypersons untrained in medical terminology and procedures, the spokesman said.

A spokesman for the

American Podiatric Medical Association
said HCFA has been paying less for podiatric claims in recent years and that Medicare has changed some of the patient coding, which makes it difficult for podiatrists to keep up.

According to figures gathered by

Citizens Against Government Waste,
a non-partisan government fraud and abuse watchdog group, by HCFA’s own statistics medical outlays for Medicare in 1996 were $203 billion and are projected to total $384 billion in 2006.

“If no changes are made, it will consume between 28 and 38 percent of the federal budget in 2030, compared with the 12 percent it accounts for now,” a CAGW assessment report examining the Clinton administration’s Medicare reform proposal said last year.

“By 1997, Congress fully comprehended that the Medicare ‘trust fund,’ which pays for hospital care, was going to go broke in 2002 and moved to create a temporary fix,” the report said. “By resorting to funding cutbacks and accounting gimmicks, such as reducing Medicare’s payments to hospitals and transferring home health care from Medicare Part A to B, Congress managed to delay the inevitable until 2008.”

Citizens Against Government Waste said the only way to ensure Medicare solvency — ironically — was to adopt a model used by the “Federal Employees Health Benefit Plan (FEHBP), which offers choice and competition.”

“The FEHBP has a reputation for keeping prices down and health-care quality high. In addition, according to the Office of Personnel Management, every FEHBP plan offers a prescription drug benefit. FEHBP covers 9 million federal employees, retirees and their families, including the president and members of Congress,” said the Citizens Against Government Waste report.

Some analysts have said the Health Care Financing Administration’s increased responsibilities, granted it by Congress, are what is causing so much delay in making payments. New emphasis on preventing “fraud and abuse,” coupled with new authorities to curb suspected abuses — such as the agency’s authority to hire specialized anti-fraud investigators — may be “outstripping HCFA’s capacity to manage its existing workload,” the GAO said in a

February 1999
report to the House Ways and Means Committee.

On Tuesday, the Clinton administration announced that because many of the nation’s Health Maintenance Organizations were opting out of Medicare this year, calling it “overregulated and underpaid,” nearly 1 million seniors and disabled persons covered by the government health plans would be dropped. Those people will have to scramble to find another HMO offering Medicare benefits by the end of the year.


Related story:

‘Hit job’ kills eye care clinic

Note: Read our discussion guidelines before commenting.