University of Colorado Health Settles False Claims Upcoding Case for $23 Million

Last week, the Department of Justice (DOJ) published a press release spotlighting a False Claims case that involved allegations of upcoding Emergency Department (ED) Evaluation and Management (E/M) services.  The University of Colorado Health (UCHealth) has agreed to pay $23 Million Dollars for allegedly submitting false claims to federal healthcare programs.

The lawsuit was filed by whistleblower Timothy Sanders, who worked at UCHealth as a revenue recovery auditor, on behalf of the United States Government under the Qui Tam provisions of the False Claims Act.  The whistleblower alleged that UCHealth inappropriately used autonomous coding technology to assign E/M levels for ED visits spanning from 11/1/2017 to 3/31/2021.  According to the whistleblower’s claims, the billing system automatically coded E/M claims using CPT Code 99285 (the highest level of E/M billing for ED services) under the guise of “frequent monitoring of vital signs”.

Per the civil lawsuit complaint, “The United States alleges that UCHealth knew that this automatic coding rule associated with “frequent monitoring of vital signs” did not satisfy the requirements of the CPT code description for CPT 99285 and did not reasonably reflect the facility resources utilized by the UCHealth Hospitals. UCHealth received numerous complaints from its coding employees warning about the use of CPT 99285 based on the automatic coding rule associated with “frequent monitoring of vital signs.” UCHealth also received and responded to individual patient complaints, but did not adjust its automatic coding rule systemically. Further, UCHealth was consistently identified, in reports received from the Centers for Medicare & Medicaid Services, as a “High Outlier” for its CPT 99285 E/M billing during the Covered Period."

This lawsuit serves as a harsh reminder to healthcare providers – autonomous coding without the appropriate compliance guardrails can have significant and far-reaching consequences.  Although technology is designed to function as a support mechanism, it must incorporate all necessary compliance safeguards. 

If healthcare providers or business associates are utilizing automated coding systems, make sure to perform regular compliance audits and safeguard checks to ensure that these systems are compliant with federal regulations and payer contracts.  Also, we expect to see many more probe audits and increased scrutiny for healthcare providers that utilize similar, or the same technology referenced in the UCHealth lawsuit.

Read more about the UCHealth False Claims case here:  https://www.justice.gov/opa/pr/uchealth-agrees-pay-23m-resolve-allegations-fraudulent-billing-emergency-department-visits

https://www.justice.gov/opa/media/1376721/dl