UCHealth, the state’s largest health care provider, has arrived a $23 million settlement with federal authorities over allegations he overbilled for emergency care at his hospitals, the Colorado U.S. Attorney’s Office announced on Tuesday.

The allegations allege that UCHealth hospitals from November 1, 2017 to March 31, 2021, automatically used the most expensive billing code possible for certain emergency department claims submitted to the government’s Medicare and TRICARE health coverage programs, which are for members of the U.S. military . and pensioners.

Using this billing code without proper justification violates the Fair Claims Act, the feds say.

“Improper billing for federal health care programs consumes valuable government resources needed to provide health care to millions of Americans,” said Senior Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in a statement. “We will go after healthcare providers who defraud taxpayers by knowingly submitting inflated or unsubstantiated claims.”

UCHealth has denied wrongdoing.

“UCHealth is pleased to see the conclusion of this lengthy and resource-intensive investigation,” UCHealth spokesman Dan Weaver said in a statement. “UCHealth denies these allegations, but we agreed to the settlement to avoid potentially lengthy and expensive litigation. The agreement allows us to focus our resources on providing excellent patient care.”

The complex world of hospital billing

The allegations dive deep into the complex world of hospital billing. When a hospital wants to bill for a service, it uses a billing code to identify what the service is. Sometimes a single service might be billed under a number of billing codes, depending on the severity of the patient and the amount of hospital resources consumed by the care.

This is the case with so-called evaluation and management – ​​​​or E&M – services in emergency departments. Basically, this is the fee to enter the emergency room for treatment.

Emergency visits can be billed using one of five Current Procedural Terminology, or CPT, billing codes: 99281 through 99285. The first is for the least severe cases—those that probably didn’t need to come to the ER to begin with. The latter is for the most severe – critical situations with immediate risk of death.

The feds allege that UCHealth automatically billed a visit using CPT 99285 if its healthcare providers checked a patient’s vital signs more times than the total number of hours the patient was present in the emergency room. In other words, if a patient spent three hours in the emergency room and had his vitals checked four times, the Justice Department claims UCHealth would automatically code this as a level 5 emergency room visit under CPT 99285. This thing didn’t apply, though. , in patients who spend less than an hour in the emergency room.

The feds say UCHealth used the highest-level code “despite the severity of the patient’s medical condition or the hospital’s resources used to manage the patient’s health and treatment.”

“The United States argued that UCHealth knew that its automated coding rule associated with vital sign monitoring did not satisfy billing requirements to Medicare and TRICARE because it did not reasonably reflect the facility resources used by UCHealth hospitals,” the US Attorney for Colorado said. Office wrote in a press release on Tuesday.

“We will hold accountable health care companies that adopt automated coding practices that lead to unnecessary and improper billing,” said Colorado Acting U.S. Attorney Matt Kirsch.

Growing concerns about ‘upcoding’

When hospitals charge a higher-level billing code than is appropriate, this is known as “upcoding.” The practice has become a major point of interest for researchers trying to understand why US health care spending is so high.

One analysis published in 2019 found that the percentage of ED visits coded using 99285 increased to 27% in 2017 from 17% in 2008, while use of the three least severe code levels decreased. A analysis of Colorado claims data by the Center for Improving Value in Healthcare found that 99285 became the most commonly billed E&M code in the state by 2016, up from third in 2009.

Another study found that 30% of the increase in Colorado spending on emergency services it was due to upcoding. The state had by far the highest amount spent per emergency room visit among the four states included in the analysis.

Price differences between codes can be significant. According to data collected by the state posted on ColoradoHospitalPrices.comfor a UCHealth University of Colorado Hospital ER visit coded as 99281 – the least severe level – Medicare pays $85.89, while some private health insurance pays up to $700. For an emergency room visit coded as 99285, Medicare pays $621.39, and some private health insurance pays more than $6,000.

Whistleblower Complaint

Allegations of UCHealth’s improper billing first came to the feds’ attention through a complaint filed by a former UCHealth employee. The whistleblower, an Arvada man named Timothy Sanders, wrote in a complaint filed in 2021 that he worked as a “revenue recovery auditor” whose job it was to resolve complaints from patients who believed they had been overcharged.

Sanders said he discovered that an automated system was falsely billing patients under 99285, and that not only did UCHealth officials know about it, but they had no intention of doing anything about it.

“What Sanders learned was that UCHealth would reduce an ED bill if a patient complained, but otherwise UCHealth would take no action to ensure that a particular ED bill was correct “, according to the complaint filed by Sanders.

Under federal law, whistleblowers are entitled to a portion of the settlement money the government collects. Sanders is to receive $3.91 million in the proceeds of Tuesday’s settlement, according to the U.S. Attorney’s Office.

UCHealth operates more than a dozen hospitals and hundreds of clinics in Colorado. In a given year, it treats about 3 million patients. UCHealth brought revenues of more than 8 billion dollars from treating patients during the fiscal year that ended in June, according to an audited financial report filed with federal regulators. He has made over $500 million in profit from patient care.

Taking into account earnings from investments and other sources of income, the health system made a profit of more than $1 billion last fiscal year.