Coding Unbundled

Coordinated Health in Pennsylvania, founded by its CEO, Dr. DiIorio, was on track to compliant coding when they hired outside consultants to audit their coding practices. The consultants found that the facility and Dr. DiIorio, a board-certified orthopedic surgeon, were misusing Modifier 59 (Distinct Procedural Service) in order to unbundle services from 2007 through 2014. Unbundling is defined as the process of billing a group of procedures separately when they should be billed as a single comprehensive code. Modifier 59 is misused to declare these procedures as separate and not performed as part of the original procedure. Intentional or not, it was recommended that Coordinated Health take actions to self-report and correct the over payments for these unbundled services.

Instead, this fraudulent practice continued and Dr. DiIorio allegedly changed his documentation behavior in 2009 to maximize reimbursements through improperly unbundling procedures on knees, hips, and shoulders. The consultant’s recommendations were ignored by the doctor and executives, even after education on the proper use of Modifier 59. To settle allegations for Fraudulent Billing under the False Claims Act, Coordinated Health and Dr. DiIorio have agreed to pay a total of $12.5 million and complete a five year Corporate Integrity Agreement with HHS to monitor its billing practices.

Modifier 59’s ability to circumvent automated safeguards, lending itself to fraudulent practices, has made it a focus of the OIG since 2005 when they published a study concluding that CMS was not properly monitoring the modifier for abuse. This means that payers, including CMS, will continue to pay close attention to the modifier’s use. Be sure to monitor your use of Modifier 59 and check that it is properly attached to the billed services. Stay on top of compliant billing and coding with the expertise of Lighthouse Healthcare Advisors’ Certified Professional Coders and Certified Professional Medical Auditors. Contact us now for more information on how we can help with your compliance inquiries.


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