As we have all read by now the billing errors at The Villages Health (TVH) began in 2020, when the practice implemented certain billing processes inconsistent with Medicare payment policies, resulting in the receipt of more money than legally due. TVH discovered the issue in the fall of 2024 and hired outside consultants to conduct a review. TVH ended up facing over $350 million in Medicare overpayments.
It appears that these billing errors included diagnoses that were submitted to Medicare without the proper clinical documentation. In many cases, patient charts were amended after the 90-day CMS deadline, or diagnoses were listed without active symptoms, evaluations, or treatments. When billing Medicare (especially Medicare Advantage plans) the regulatory criteria must be stringently followed including having each diagnosis clearly supported by patient records.
Healthcare organizations that participate in federal programs like Medicare are legally required to have an effective compliance program in place. This program, among other things, must include internal monitoring and auditing systems to check for compliance with billing rules. Due to the ever-changing nature of regulations, a constant, ongoing review process and risk audits are essential to prevent billing errors, fraud, and abuse.
A primary reason for this is so that the entity can proactively identify and fix issues that external auditors would likely find, minimizing overpayment errors.
An effective compliance program consists of several elements including, but not limited to; continuous monitoring and auditing; keeping up with evolving regulations (such as ICD-10 coding guidelines); training and education (staff must be regularly trained on updated billing practices, coding changes, and compliance regulations); and high-level oversight (which would include a designated compliance officer and compliance committee/department responsible for the day-to-day operations of the compliance program, including overseeing billing audits).
There is one question that keeps coming to mind. Where was the proper and effective compliance program at The Villages Health System? The answer seems to be clear in that their compliance program was greatly flawed.
The billing errors that occurred at The Villages Health System continued from 2020 to 2024! An effective compliance program would have identified these errors long before 2024.
Clearly, The Villages Health system did not have the proper processes and systems in place in their compliance oversight. The result was not only the bankruptcy that ensued, it also resulted in loss of trust from their patients, Medicare (the federal payor), insurance company payors (i.e. Blue Cross Blue Shield of Florida and United Healthcare), and The Villages Health employees.
We can only hope that the new owners of The Villages Health system will have the integrity, insight, and understanding to ensure an effective compliance program.
Carol Ann Wolf, MSH-NHA-CDP is a Village of Hemingway resident. She is a retired healthcare executive who volunteers in a variety of different areas relating to health care initiatives within The Villages.