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Cracking the code


You can obtain reimbursement at a higher level and overcome your fears of being audited by thoroughly and correctly documenting the care you provide to your patients.

You can obtain reimbursement at a higher level and overcome your fears of being audited by thoroughly and correctly documenting the care you provide to your patients.

Although this advice may seem self-evident, coding experts and practice management consultants say that a surprising number of doctors, especially primary care physicians (PCPs), are either unable or unwilling to follow it. Instead, they say, many routinely “downcode” when reporting their evaluation and management (E/M) services-that is, code at a lower level than the level of service they actually provide-with the result being that they are not reimbursed commensurate with the complexity of the care provided for a patient’s disease or condition.

A review of 60,000 audits of physician billing records conducted by the American Academy of Professional Coders (AAPC) client services division in 2012 found that 37% of the records either were undercoded or underdocumented, equating to an average of $64,000 in foregone or at-risk revenue per physician.

The reasons for doctors’ unwillingness to use the appropriate E/M codes generally fall into two categories, experts say:

  • lack of understanding of the coding system and the accompanying importance of providing accurate and precise documentation, and

  • fear of being audited.

Jeannine Z.P. Engel, MD, FACP, is a physician adviser to the healthcare compliance office for the University of Utah, Salt Lake City. She frequently lectures on coding issues at American College of Physicians meetings and to other physician groups.

“My anecdotal observation is that the people who come to my coding talks consistently tell me that they’re afraid to bill at the highest level because they’re afraid they’re going to get audited,” she says.

Although the details of coding sometimes can feel overwhelming, Engel maintains that physicians can learn the basics and will benefit by doing so. She recalls starting her career in an academic practice in which neither she nor her partners knew much about coding. She volunteered to learn more about it and teach her partners. “In doing that we figured out we were consistently billing at lower codes than what we were documenting in the services we were providing,” she says.

The main Current Procedural Terminology (CPT) codes used by PCPs to bill for E/M service in an outpatient setting are 99201 through 99205 for new patients-those who have not been seen by your practice for the last 3 years-and 99211 through 99215 for returning patients. A new patient is defined as one that neither you nor anyone in your practice has seen in the past 3 years. A patient returning after more than 3 years is defined as new.

(Two important exceptions to the E/M codes are Medicare’s “Welcome to Medicare” visit and the annual wellness visit. The wellness visit is billed using either code G0438 or G0439, depending on whether it is a first or subsequent visit. The “Welcome to Medicare” visit is billed using either G0402, G0403, G0404, or G0405.)

When documenting and coding a patient E/M office visit, Engel advises doctors to consider three questions:

  • Is the patient new or established?

  • What level of history, physical examination, and medical decision-making (the three elements of documentation) will be  recorded?

  • What is the appropriate CPT code for the care documented?

Each of the three elements of documentation, in turn, has various levels of complexity and sub-components:

History: Elements include history of present illness (HPI), review of systems (ROS), and past, family, and social history (PFSH). Levels of complexity include “problem focused” (PF), “expanded problem-focused” (EPF), “detailed,” and “comprehensive.”

Exam: The exam has the same four levels of complexity as history-PF, EPF, detailed, and comprehensive.

Medical decision-making (MDM): This element can be “straightforward” or of low, medium, or high complexity.

In general, CPT code numbers correspond to the level of service required to diagnose and treat the condition. The higher the level of service, the higher the code number used to bill the visit, and the greater the reimbursement.


Importance of thorough documentation

No formula exists for producing E/M documentation that guarantees that a patient visit is coded and billed at the correct level, but Raemarie Jimenez, CPC, CPMA, director of product development for the AAPC,  advises that good documentation should include answers to the following questions:

  • Why is the patient there that day?

  • What is the patient describing?

  • What type of exam(s) is/are being performed on the patient?

  • What tests are being ordered, and why?

  • If the patient has any chronic illnesses, what is your assessment of them?

  • Are the patient’s laboratory test results within the acceptable ranges for managing those diseases?

  • Since the last visit, how has the patient been adhering to his or her medication regimen?

“It’s really just the patient’s story of what’s going on with him or her, the physician’s observations, and the assessment and plan of treatment for that patient,” Jimenez says.

The problem for many physicians, Engel says, is that they don’t thoroughly document all the work they do during a patient visit and thus wind up coding at levels that don’t reflect the services they actually provide. This shortcoming occurs most commonly in the MDM component.

“What I try to preach is that I want  doctors to get credit for the work they’re already doing, which they can do by making some small changes in the way they document,” Engel says.

She cites as an example reviewing and acting on the result of a test such as a chest x-ray or electrocardiogram-something many PCPs routinely do. Documenting “chest x-ray-personally reviewed” rather than just “chest x-ray” and the result is enough to  raise the level of medical decision-making-which may be sufficient to bill the visit at a higher code. “So if they’re already doing the work, the just need to learn to document that it’s actually being done,” she says.

Without the proper documentation, Engel adds, an auditor reviewing the chart has no way of knowing how much work the physician did and the basis for the coding selection.

The level of MDM also can be increased by noting when someone other than the patient provides information about the patient’s disease or condition. “Again, this is something we do all the time,” Engel says. “We often have the peanut gallery of spouses, children, and other relatives giving information. Some of it’s useful and some isn’t, but the important thing is to note somewhere in the record that you obtained information from someone else, because it bumps up the level of MDM.”

The role of EHRs

Electronic health record (EHR) systems can help doctors improve their documentation and coding, especially through the use of templates and prompts, says Kathy DeVault, RHIA, CCS, director of health information management practice excellence for the American Health Information Management Association (AHIMA). Moreover, many EHR systems allow physicians to customize their prompts to the most common diseases and conditions they see in their practices. For example, she says, a template for a cough might include questions about severity and duration and whether the cough is productive.

A pitfall of using EHRs, however, is the ease of copying (cloning) documentation or bringing forward a patient’s entire past medical history, regardless of what you’re treating the patient for during a particular visit.

“A lot of EHR systems will look at [those] data [that are pulled forward] and automatically start assigning higher coding levels,” DeVault says. “I’ve also heard providers say that if their MDM is high, if they’re treating a lot of diagnoses, then they can bill at a higher level. But that’s not true, because it’s not just MDM that drives your E/M coding.” (For more on EHRs and documentation cloning, see “When is EHR cloning acceptable?”)


Red flags

Targets of coding and billing audits are chosen largely at random by both public (Medicare and Medicaid) and commercial payers. Nevertheless, physicians can somewhat lower the risk of being audited by avoiding several practices. Chief among those practices is billing the same level of service-usually the “middle” E/M code, 99213-too frequently.

“Sometimes a provider will say, ‘I’ll just pick the middle level, because then I won’t be the target of an audit. But it’s impossible for every patient to require the same level of care, so that’s a big red flag,” says the AAPC’s Jimenez.

Consistently coding at higher levels than other PCPs in your geographic area also is likely to attract the attention of auditors. Maxine Lewis, CMM, CPC, president of Medical Coding Reimbursement Management in Cincinnati, Ohio, notes that computers enable auditors to analyze billing data at a more granular level than before, making it easier to compare physicians with peers in their region, or even their practice, and identify “outliers.”

Physician, audit thyself

Although the range of options for avoiding an audit is fairly limited, you can minimize the chances of a negative outcome by ensuring that your documentation supports your coding. “Even if you see complex patients and bill for higher levels of service, as long as your documentation supports your level of service, then the outcome should be in your favor,” Engel says. “The best thing you can do is document well.”

The most effective way for physicians to document well, experts advise, is by conducting their own audits. “One of the things we recommend to our physician clients, in addition to training and educating staff [in coding], is to have a periodic outside review of their charts to see that they are coding appropriately and have a strong compliance posture,” says Lawrence Vernaglia, JD, MPH, chairman of the healthcare industry team of the law firm Foley & Lardner LLP in Boston, Massachusetts, and a Medical Economics editorial consultant. “Even looking at as few as 10 charts per quarter is a good way to see if there are any outliers in a practice. There might only be one individual who’s a problem, while everyone else is fine,” he says.

Repeated claim denials from a payer sometimes can be a warning of a coding or documentation problem, Vernaglia adds. “Don’t just ignore it. Follow up and treat it as an indicator that you might have a problem in that area.”

An additional benefit of conducting self-audits is finding overpayments made to the practice. The stakes involved in finding those overpayments soon may become a great deal higher, Vernaglia notes: a provision in the Affordable Care Act says if a provider does not return a Medicare overpayment within 60 days of becoming aware of it, then he or she could be subject to a False Claims Act allegation, which carries a penalty of up to $11,000 per claim, treble damages, and program exclusion.

Although the law technically is in effect, the Centers for Medicare and Medicaid Services has not yet published final regulations to define certain key provisions of it. “This leaves physicians to make their own judgments as to their responsibilities with respect to potential overpayments they see in their practices,” Vernaglia says.


Responding to an audit notice

But suppose, despite your best efforts, you receive notice that you’re going to be audited. What should you do?

First, take a deep breath and try not to panic, Engel advises. “We physicians are always quick to assume we’ve done something wrong, but an audit doesn’t necessarily mean that,” she says. “Then contact your compliance group or your legal representative to understand exactly what your responsibilities are.”

It also is important to find out who is conducting the audit, and why, Vernaglia says. “Are you being checked at random or because of a specific complaint? Is it conceivable there’s a whistleblower lurking around? If so, you’d need the involvement of lawyers more than if it were just a routine periodic audit.”

In addition, he suggests finding out how much information the auditor is requesting, because you may not be required to submit it all. For example, your contracts with a commercial payer might have limits on how much information you have to provide for an audit, and Medicare recovery audit contractors are limited in how many charts they can pull at any one time as well as how far back they can look, Vernaglia says.

Other recommendations from the experts to whom we spoke:

  • Don’t make any changes to the charts, records, or other documents you are submitting for the audit. If you believe you must add some information, Lewis says, then date and initial the addendum.

  • Provide all the requested documentation. “I’ve seen charts sent without an x-ray report, without labs, without the personal history form the patient filled out,” Lewis says. “Everything done on that day must be sent in. Otherwise, there’s no record of what you did.” Also check that you’ve signed all the charts.

  • Neatness counts. “The more orderly, organized, and thorough the information you provide the auditor, the better your chance of a successful outcome,” advises the AAPC’s Jimenez. “Give them all the pertinent information. Don’t make them look for a needle in a haystack.”

  • Ask about the auditor’s qualifications. “Every environment for coding is different,” notes AHIMA’s DeVault. “If the auditor has only worked on hospitals, [then he or she] shouldn’t be auditing a small practice, because there’s a big difference. So I think it’s appropriate to ask who’s doing the auditing? What are their credentials? What is their experience?”

DeVault advises doctors to try to view an audit as a learning experience. Admittedly, doing so is not easy under the circumstances, she says, but “audits are an opportunity to improve your operations and documentation and find out where there are problems. And if you’re spot on in your documentation, you should be fine.” 

About those transitional care management codes

Transitional care management (TCM) codes, which Medicare introduced at the start of this year, have become a source of confusion for primary care physicians, as evidenced by anecdotal but widespread reports of claims submitted under the codes being rejected.

Current Procedural Terminology (CPT) codes 99495 and 99496 are designed to allow doctors and their staffs to be reimbursed for the time spent following up with patients after they are discharged from an inpatient setting or nursing or skilled nursing facility and coordinating the patient’s care as patients transition back to the community. The codes require direct, telephone, or electronic communication with the patient, moderate- or high-complexity medical decision-making during the service period as well as a face-to-face visit within either 7 or 14 days of discharge.

Unlike most other fee-for-service CPT codes, however, Medicare requires providers to wait 30 days after providing the service before submitting their bills, and coding experts think this difference may be the reason behind many of the rejections.

“The way we’re accustomed to billing things is, as soon as we provide the service, we send the bill in. I can easily envision providers submitting claims as soon as that patient comes in for that face-to-face encounter,” says Raemarie Jimenez, CPC, CPMA, director of product development for the American Academy of Professional Coders and a former billing and coding manager. She adds, however, that “Medicare wants to see a continuum of care, not just that first face-to-face encounter with the patient.”

Another possible cause of rejection could be that the facility from which the patient was discharged has not submitted the patient’s discharge paperwork, according to Maxine Lewis, CMM, CPC, president of Medical Coding Reimbursement Management in Cincinnati, Ohio. “If the Medicare carrier hasn’t received the hospital’s billing, and here comes the physician sending in the TCM code, [the carrier] will reject it,” she says.

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