By Bill Gompers

Most experts are predicting healthcare providers’ liability exposure will dramatically increase this year and in the immediate future. Many drivers are contributing to this situation, including the implementation of the Affordable Care Act (ACA), the conversion of medical record keeping from manual systems to electronic medical records (EMR), and converting from International Classification of Diseases (ICD) version 9 to version 10.  Let’s look at how these drivers will overexpose you.

Provisions within the ACA create significant changes to existing federal fraud and abuse laws relating to healthcare providers, in continued efforts to save money and reduce fraud and abuse.  Changes include increased audits targeting “improper billing.”  Programs have been established to aggressively utilize on-site and automated audits to increase the percentage of healthcare providers undergoing these audits.  It is estimated that, to date, roughly 25% of the healthcare providers who participate in Medicare and/or Medicaid have been subjected these audits, resulting in billions of dollars recovered.  A byproduct of these audits is the uncovering of alleged violations in areas such as HIPAA, EMTALA, and STARK, to name a few.  Coupled with this overexposure has been the increase in civil and criminal penalties associated with violations.

The rapid deployment of electronic medical records (EMR) fueled by federal incentives is proving to be beneficial in many regards but is also creating liability-exposure issues in its wake.  In addition to the obvious exposure of widespread security breaches of personal health information, EMRs have created an environment enabling governmental agencies and contractors to audit and review data in ways they could not in the past.

With the conversion from ICD 9 to ICD 10, now scheduled for full implementation in October 2014, billing codes will increase from approximately 18,000 to over 150,000. Although this change is intended to create more-accurate codes specific to the services performed, the sheer volume of possibilities exponentially increases the probability of billing errors.  Since this change will numerous “gray” areas, it is important providers have defenses in place when the payors attempt to recoup payments and/or choose to proceed with civil and/or criminal actions.

Fortunately, there are products in the marketplace developed to assist healthcare providers with defense; fines and penalties for billing errors and omissions; audit support; and HIPAA, EMTALA, and STARK actions.  These products are rapidly evolving and are “affordable.”

With the increased emphasis on the enforcement of the myriad of laws directly and indirectly affecting healthcare providers, it is prudent for you to review your errors and omissions exposures and evaluate whether you have adequate coverage or reserves to weather this overexposure.

Bill Gompers is a medical malpractice insurance specialist with Danna-Gracey, a state-wide independent insurance agency dedicated solely to insurance coverage placement for Florida’s doctors and healthcare providers, including medical malpractice, workers’ compensation, physician and employee benefits, and PEO (Professional Employer Organization) services. To contact him call (888) 777-7173, or e-mail bill@dannagracey.com.