Significant Medicare coding errors signal need for physician education, OIG says

Nearly 42% of Medicare claims for evaluation and management (E/M) services are incorrectly coded, according to a recent study from the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG).

In its medical records review from 2010, the OIG report shows that Medicare inappropriately paid some $6.7 billion for incorrectly coded claims and those lacking proper documentation. That represents 21% of Medicare payments for E/M services in 2010.

The study found that incorrect coding included both upcoding and downcoding, and 19% of claims were lacking proper documentation. Claims for high-coding physicians were more likely to be incorrectly coded or insufficiently documented than claims from other physicians, the report says.

The report calls on Centers for Medicare and Medicaid Services (CMS) to educate physicians on coding and documentation requirements for E/M services, continue to encourage contractors to review E/M services billed for by high-coding physicians and follow-up on claims for E/M services that were paid in error.

In an opinion accompanying the report, CMS said it did not agree with the recommendation to encourage contractors to review E/M services billed by high-coding physicians, simply because it would cost the agency more to administer than it would collect. CMS says it will reassess the effectiveness of reviewing claims billed by high-coding physicians as it relates to other efforts like Comparative Billing Reports.

“We acknowledge that CMS must weigh the costs and benefits for reviewing claims for E/M services against doing so for more costly Part B services,” OIG adds.

But OIG is also calling on the agency to address coding problems associated with E/M services to “properly safeguard Medicare.” “Given the substantial spending on E/M services and the prevalence of error, CMS must use all of the tools at its disposal to more effectively identify and eliminate improper payments associated with E/M services,” the report says.

As part of the recommendation, education of physicians remains a critical component to improving coding practices. “CMS should educate physicians on the components used to determine the level of an E/M service and emphasize the documentation needed in the medical record to support that level, OIG says.

Next: Key components to determine the level and CPT code

Here are the key components used to determine the level and CPT Code for a new patient office visit, according to CMS:

CPT Code 99201

• Presenting problem is self-limited or minor; the physician typically spends 10 minutes face-to-face with the patient and/or family

• Patient history: problem focused

• Examination: problem focused

• Medical decision-making: straightforward

CPT code 99202

• Presenting problem: low to moderate severity; the physician typically spends 20 minutes face-to-face with the patient and/or family

• Patient history: expanded problem focused

• Examination: expanded problem focuses

• Medical decision-making: straightforward

CPT code 99203

• Presenting problem: moderate severity; the physician typically spends 30 minutes face-to-face with the patient and/or family.

• Patient history: detailed

• Examination: detailed

• Medical decision-making: low complexity

CPT code 99204

• Presenting problem: moderate to high severity; the physician typical spends 45 minutes face-to-face with the patient and/or family

• Patient history: comprehensive

• Examination: comprehensive

• Medical decision-making: moderate complexity

CPT code 99205

• Presenting problem: moderate to high severity; the physician typically spends 60 minutes face-to-face with the patient and/or family

• Patient history: comprehensive

• Examination: comprehensive

• Medical decision-making: high complexity