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Physician acquitted of fraud charges
The case may pressure the government to revise the CPT coding system. Side-port paracentesis was acknowledged as a billable procedure.
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This year, James Edwards, MD, took Independence Day personally. On July 3, he was acquitted of 96 counts of a federal indictment by the U.S. District Court for Northern Ohio.
Dr. Edwards’ indictment stemmed from the use of evaluation and management (E/M) Current Procedural Terminology (CPT) codes instead of ophthalmology billing codes for services billed to Medicare by his practice. Although use of the E/M codes was legitimate, the routine use of them raised a red flag at an insurance company that was billed by his practice. The company reported the practice to the Office of Inspector General, and soon federal agents were removing files from his office, Dr. Edwards said.
“It was a nightmare,” Dr. Edwards told Ocular Surgery News from his office in Parma, Ohio. “It was precipitated by Advantage Health Partners, a physician hospital organization that I was a member of. I had been using E/M codes rather than ophthalmology codes, and when they did a review of what ophthalmologists were coding, they found that my coding spikes were out of line with the rest of the ophthalmologists. It wasn’t a fair comparison since I didn’t use the ophthalmology codes, but they reported me to the OIG in February 1999.”
Although ophthalmology has its own set of billing codes, the E/M codes can be used by all physicians, said Steven Bell, JD, Dr. Edwards’s attorney.
“The E/M codes are available for all physicians, and there was no mistake on the part of Dr. Edwards in using them. Advantage Health Partners’ comparison obviously showed that he was using the E/M codes more than others because the others did not use them. They therefore launched this investigation on the basis of a ridiculous comparison,” Mr. Bell said.
A state fraud task force, formed to share information among government enforcement agencies, soon brought the case to the attention of the OIG, the FBI and the state district attorney.
Once the FBI was involved, the number of charges escalated to 96 counts of fraud. The charges fell into three main groups: unnecessary surgery, unnecessary preoperative examinations and inappropriate frequency of patient visits.
The investigators noted Dr. Edwards’ use of a side-port paracentesis for aqueous drainage to lower intraocular pressure after cataract surgery. One group of charges indicated that billing for this procedure on day 1 postop was unnecessary.
Preop testing patterns also drew the attention of investigators. Dr. Edwards said he performs B-scan echography on about 15% of his cataract patients and specular microscopy on every patient scheduled for phacoemulsification. The second group of charges concerned the billing for these tests.
In the third group of charges, prosecutors said that Dr. Edwards saw some patients “at inappropriately brief intervals,” Mr. Bell said.
As the trial progressed, however, holes in the government’s investigation of Dr. Edwards became evident, Mr. Bell said, and charges were dropped as the prosecution’s weaknesses appeared.
As a final blow to the accusations, Mr. Bell was able to include testimony from Tommy Thompson, Secretary of Health and Human and Services, noting that the coding process is ambiguous and that the government must make efforts to simplify it.
Expert witness
A major weakness in the investigation of Dr. Edwards was the government’s expert witness, according to Mr. Bell. Through her testimony, the witness inadvertently helped the defendant, he said.
The prosecution’s ophthalmologist witness acknowledged that she had not performed surgery in more than a decade. It became evident that she was not familiar with currently acceptable surgical techniques, the American Academy of Ophthalmology’s (AAO) Preferred Practice Patterns or the CPT coding system, Mr. Bell said. In addition, she admitted to not having reviewed Dr. Edwards’ patient charts completely.
“On cross-examination, the witness acknowledged, to the surprise of the judge, that she hadn’t reviewed the whole patient chart before giving her opinion in court,” Mr. Bell said. “She had also stopped doing surgery a dozen years ago and had missed the peer-reviewed article showing side-port paracentesis to be efficacious,” Mr. Bell said. The charges relating to this practice were dropped.
Allegations that Dr. Edwards had seen patients too frequently and unnecessarily were dismissed when it was shown that he followed the AAO’s Preferred Practice Pattern for cataract surgery. The expert witness admitted to being unfamiliar with those guidelines, Mr. Bell said.
The third group of charges against Dr. Edwards, overuse of B-scans when examining patients with dense cataracts, was also dismissed.
“The testimony at the trial was that Dr. Edwards performed B-scans 15% of the time prior to surgery, and that’s about right from a national perspective. After that testimony, the government dismissed those charges,” Mr. Bell said.
After the government dropped these charges, the only issue that remained was the overuse of the E/M coding, he said.
Testimony by video
To try to demonstrate that Dr. Edwards’ use of the E/M codes was not fraudulent, Mr. Bell subpoenaed HHS Secretary Thompson. The judge in the case allowed Mr. Thompson’s testimony from a previous congressional committee hearing to be accepted in court in his stead. His testimony was read in court from the Congressional Record, Mr. Bell said.
In Mr. Thomson’s testimony, from a July 2001 hearing in front of the House Ways and Means Committee, he mentioned the need for revision of the CPT coding system.
“We know that physicians’ primary work is to provide clinical care, not documentation,” the transcript read, in part. “Physicians found the first two sets of guidelines, available from 1995 to 1997, cumbersome. We agree and have been working with a contractor to improve them, but physicians continue to express concern that these guidelines are hindering, not helping them to deliver the appropriate patient care.”
With this testimony, Dr. Edwards said, it took the jury only 40 minutes to return with a verdict of not guilty on all counts.
The government also acknowledged that side-port paracentesis is a billable procedure for cataract surgery when done during the 90-day global billing period, he said.
“They will no longer question the medical necessity. They will keep that between the doctor and the patient,” he said.
| A system out of balance by Alan E. Reider, JD A note from the editors: The indictment and prosecution of Dr. James Edwards is just one example of a much larger problem facing the health care industry today. For years, Congress and the Administration (whether Republican or Democrat) have championed new legislation and new enforcement initiatives designed to control the evils of health care fraud and abuse, which have cost taxpayers billions of dollars annually. It is an easy bandwagon to jump on. After all, who would oppose efforts to control fraud, waste and abuse? In fact, it could be political suicide to oppose such efforts; no politician wants to be viewed as soft on crime, and certainly no one wants to be critical of programs that have replenished the Federal coffers with hundreds of millions, even billions, of dollars a year. As a result, we face a system out of balance. As more legislation is passed, the government has greater weapons to threaten the health care community. The theories of prosecution become more aggressive. Conduct, which once generated an overpayment demand, now can result in enormous civil penalties or criminal prosecution. And to make things even worse, the ever-increasing complexities of the health care system have made compliance virtually impossible for the average provider, to say nothing of the small physician practice, which lacks the resources to follow every minute change in instruction. But there is something special about the Edwards case that is worth noting. The government’s principal charge against Dr. Edwards was false claims relating to improper use of the evaluation and management codes. Yet, for several years, the government, including Secretary of Health and Human Services Tommy Thompson, had acknowledged that this coding system was cumbersome, unclear and difficult to apply. In fact, in one documented study, expert reimbursement consultants reflected an error rate of 83% for new patients and 48% for established patients when applying the E/M codes. If experts cannot get it right, how can physicians be expected to do so? And in a separate study by the General Accounting Office, Medicare carriers were found to respond accurately to inquiries about proper coding only 15% of the time. What would the government do if a physician billed properly only 15% of the time? Prosecuting Dr. Edwards for failing to conform to billing guidelines, which even the government cannot get right, was ill-advised and improper. There is something wrong with a system where a physician faces not only loss of his practice and his license, but also loss of his liberty for struggling with a regulatory structure that is virtually impossible to understand. And to confront government prosecution, which has almost limitless power and extraordinary weapons, creates a serious lack of balance. Enforcers and prosecutors will no doubt take the position that the balance comes from the judicial system. After all, Dr. Edwards had his day in court, and he won. He is no worse off than he was before. Nothing, however, could be further from the truth. Dr. Edwards suffered extraordinary financial injury, and as a result of the terrible publicity, lost a significant portion of his practice. Above all, the emotional and psychological toll this matter has taken on him over the past few years is incalculable. This is a case that never should have been pursued. In the government’s zeal to protect the public from those truly guilty of fraud, it is compromising the rights of those who are guilty of no more than simple, honest mistakes. Balance must be restored to this system before others like Dr. Edwards are forced to suffer unfairly. For Your Information: |
The aftermath
As a result of the investigation, Dr. Edwards said, he lost 10 insurance policies and thousands of patients, underwent a Medicare audit and was not paid by several insurance companies for services rendered.
Newspaper coverage in The Plain Dealer of Cleveland inaccurately reported that Dr. Edwards faced 10 years in prison and $250,000 for each charge against him.
“That wasn’t true. But needless to say, people were impressed by the numbers,” Dr. Edwards said. “But many of my patients stood by me. I had at least 170 patients willing to testify in court. We had only five patients testify.”
Dr. Edwards now has begun the task of clearing his name. To start, he and his lawyer are asking newspapers to write about his acquittal, as they did about the investigation. They also intend to try collecting payment from the government for attorney fees and from the insurance companies that withheld payment from him.
“It’s been an ordeal. I walked into court and saw the U.S. v. James Edwards sign and felt really small, but I had an incredible lawyer who was able to show my side of the story to the jury, and I am free,” Dr. Edwards said.
Mr. Bell said the case shows that there is a bias in how fraud is investigated.
“Regrettably, this is more common than should be acceptable. The insurance companies involved in these investigations have a clear bias … in my view, a corruption of the obligation of law enforcement to be objective and to bear in mind what our Bill of Rights requires. The insurance companies involved in these cases have a pecuniary interest in the outcome, and I think that should disqualify them from participating. This case was a travesty,” Mr. Bell said.
Officials at Advantage Health Partners were not available for comment on the case.
For Your Information:
- James Edwards, MD, can be reached at 5500 Ridge Road #208, Parma, OH 44129; (440) 884-7181; fax: (440) 884-7738.
- Steven Bell, JD, can be reached at 1300 East 9th St., Suite 1717, Cleveland, OH 4414; (216) 575-1002; fax: (216) 575-1556.