December 21, 2018

Ensuring Proper Evaluation and Management Coding

The Path to Medical Coding Compliance: An Imperfect Process

When it comes to compliance efforts for health care organizations, consistently and correctly coding Current Procedure Terminology (CPT) evaluation and management (E/M) services is not always easy. Physicians and health care staff must stay abreast of rules and regulations that are highly detailed and complex, and apply that volume of knowledge when documenting and coding patient care.

Due to the complexity of the work, it is not surprising that staff can unintentionally make mistakes—from insufficient documentation and possibly unintentional miscoding, to potentially intentional upcoding and downcoding (i.e., billing at levels higher or lower than warranted, respectively). According to the Office of the Inspector General (OIG), 27% of Medicare reimbursements for E/M services are incorrectly coded, and 65% have insufficient documentation.

Understanding the Ramifications of Improper Coding

The consequences of improper medical billing and coding can be severe. In the case of upcoding situations, health care organizations can incur fines, penalties and takebacks. For example, two health care entities were fined more than $10 million in 2009 following allegations that they fraudulently billed Medicare for E/M services. In those cases where the provider is found to be fraudulent, there will be legal action. More case examples include:

  • A cardiologist who paid $435,000 and entered into a 5-year Integrity Agreement with OIG to settle allegations that he knowingly submitted claims for consultation services that were not supported by patient medical records and did not meet the criteria for a consultation. The physician also allegedly knowingly submitted false claims for E/M services when he had already received payment for such services relating to previous claims for nuclear stress testing.
  • An endocrinologist that billed routine blood draws as critical care blood draws. He paid $447,000 to settle allegations of upcoding and other billing violations.

On the other hand, when health care providers downcode, they are losing revenue that is rightfully theirs. Some physicians make the wrong assumption that downcoding is somehow playing it safe to avoid overcharging and potential audits by authorities. However, it doesn’t work that way. Insurers and the Centers for Medicare & Medicaid Services (CMS) both look for patterns in coding frequencies and excessive use of a particular group of codes. Understandably, in the unequivocally important, though also chaotic rush of emergency department (ED) care, downcoding can happen in an attempt to be efficient. Health care organizational leaders know how damaging this can be to revenue cycles considering the ED can be the most common entryway for patients and for some facilities, a high-revenue department.

Frequent Auditing Is Key to Medical Coding Compliance

To ensure your organization’s E/M services are coded appropriately, it is important to periodically review your charts to check for insufficient documentation, miscoding, upcoding and downcoding. Conducting audits of your medical coding process and procedures can help give you an understanding of recurring risk areas and key improvement opportunities. Using these insights, you can then work with physicians and staff to instill best practices and address any bad habits, lessening the chances of negative consequences.

A Strategic Partner Can Help

Given the many competing priorities today’s health care organizations face, regularly performing chart audits may not rise to the top of the to-do pile. As such, it can be beneficial to work with an expert partner that has deep familiarity with the current coding requirements and is committed to keeping up with changes.

At Stericycle, we offer a three-pronged approach focusing on physician-specific chart review, personalized audit reports and recommendations, and comprehensive staff and physician training that has helped many organizations realize compliance and safeguard revenue. Learn more about how Stericycle can help you feel confident in your E/M coding and ensure you lay the groundwork for compliance and long-term financial success.

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