The rules that govern the delivery of medical services are multifaceted. It is not just one agency or level of government who oversees its delivery. Each discipline has its licensing or certification board that dictates how that profession may practice. Each setting (hospital, nursing home, clinic, etc.) has guidelines that allow it to operate and be licensed. Then there are rules that dictate how private insurance pays for services. Rules on how care of private-paying patients can function. Government funded care such as Medicare and Medicaid also have their rules on how they should be billed and what acceptable services can be billed. In addition, there are often both state and federal rules within the same area that must be adhered to. Each of these may have different expectations. When this is true the “Most Restrictive” rule must be followed.

To their detriment, most health care professionals have expertise in one or two of these areas. They often unwittingly violate regulations they don’t know but are responsible to follow. The violations here are not whether a physician can give away free care or whether services can be undocumented by a physician. The physician scope of practice rules are only one component of compliance in a hospital setting. The fact that services are delivered in a hospital setting means that the hospital is responsible for the services delivered and that the rules and laws that govern it must be followed.
Potential non-compliance may exist in two areas:
1. State and federal licensing laws, and
2. State and federal reimbursement guidelines

Title XXII is the group of state laws that dictate licensure of health facilities. Services delivered in a health facility must be documented. It is not an option whether or not to document care or not. It is a requirement. Federal licensing laws also require that all care delivered must be documented. Late entry of documentation is possible if for some reason it was not completed at the time of services. But if done is must be dated on the day it was written not post dated back to the service date. Back- dating is considered fraud or forgery, . Bboth of which are not just a violation of rules, but criminal offenses. There is an example of a facility in Riverside County where nurses asked to falsify records were arrested and taken to jail. The electronic medical record system in use at ARMC should prevent this, but it may be able to be overridden by those with “Administrative” authority.

Healthcare billing and reimbursement is unlike any other profession. There is not a direct correlation between what is billed and what is paid. When an agency or service provider is a Medicare provider they are subject to a concept called “Lesser of cost or charges”. Basically, Medicare sets rates that they will pay. If you participate as a provider of care and bill Medicare you must bill at least the Medicare rate to all others. If you bill less than the Medicare rate to others then Medicare expects that you will bill them at that lower rate. If it is found that others are charged less than Medicare and that is accepted as payment, then the difference that was paid Medicare and what would have been paid at the lower rate is owned to Medicare. Care of County Supervisors and their families is certainly less than the Medicare rate. All similar service delivered at that rate is potentially in jeopardy.

Each facility who bills Medicare or Medicaid must submit an annual “Cost Report”. This is another area that both lack of documentation and failure to bill affects. This annual report is to reflect all appropriate costs and incidents of services delivered. Distilled down to a simplified equation, the total costs divided by the increments of service gives an average cost of service. Where facilities can get into trouble is when they inflate costs by including inappropriate items or report fewer increments of service. In the latter case reducing the denominator inflates the cost per increment. If a facility is found to be providing an inaccurate cost report, Medicare/Medi-Cal can trigger a financial audit that can result in paybacks, withhold of payment and/or fines.