Preparing for EM Coding Audits

Preparing for E/M Coding Audits
Proactive Compliance
Corporate Philosophy
Today’s ever-changing, complex healthcare landscape presents a unique challenge for
modern physician practices. Apart from basic compliance with existing licensure, coding,
and billing requirements, physicians need to proactively focus on pending legislation,
emerging reimbursement trends and future paradigm shifts to ensure that their practices
are prepared for the forthcoming industry changes.
PracticeMax’s services are designed to optimize reimbursement and minimize costs
through short and long term strategic planning and project implementation. Our services
are grounded in a unique multi-disciplinary approach that integrates regulatory, financial,
and operational analysis into provide a well-balanced, global perspective.
I’ve been asked to speak about current government initiatives
regarding fraud and abuse with a particular focus on ED Physician
 The primary catalyst for most current initiatives is a 2012 OIG
report entitled “Coding Trends of Medicare Evaluation And
Management Services”
Accordingly, to properly understand the current focus of
government audits, including who is being audited and why,
we need to understand what was stated in the OIG Report and
what was not.
I will then discuss current initiatives, which include:
 OIG 2013 Work Plan Audit;
 A service-specific prepay audit for Outpatient E/M services
(99205 and 99215) initiated by NGS on Oct 1, 2013 (Impacts IL,
MN, and WI).
 A service specific prepay audit for E/M visits (99285) initiated
by Noridian on October 29, 2013 (Impacts Arizona, along with
AK, AZ, MT, ND, OR, SD, UT, WA and WY)
Finally, I will conclude with a brief discussion of my own recent
experience with a private payer audit and discuss the key factors
that led to our successful appeal of the issues raised.
2012 Coding Trend Report
Insight and Analysis
OIG Coding Trend Report
In May of 2012, the OIG released a study entitled “Coding Trends
of Medicare Evaluation And Management Services”.
The most widely reported statistic was:
 Part B payments for E/M services increased from $22.7 billion to
$33.5 billion (a 48 percent increase) during a ten year period
The alarming statistic is pulled from the second sentence of the
executive summary.
OIG Coding Trend Report
Note the first sentence of the report reads:
 Between 2001 and 2010, Medicare payments for Part B goods
and services increased by 43 percent, from $77 billion to $110
Accordingly, the 48 percent payment increase for E/M services
does not seem so alarming as it is only 5% higher then the payment
increase for Part B goods and services in general.
Contributing Factors
The OIG noted that several factors contributed to the E/M Payment
increases. Specifically:
 The number of E/M services billed increased by 13 percent,
from 346 million to 392 million.
 Additionally, the average Medicare payment amount per E/M
service increased by 31 percent, from approximately $65 to $85
Each of the above are significant causal factors for the increase.
Contributing Factors
Accordingly, changes in physicians’ billing of E/M codes, were just
one of three factors that contributed to the payment increase.
Specific Findings
Specific Findings
With respect to the findings specific to coding trends, the OIG
found that:
 Physicians increased their billing of higher level codes in all 15
visit types allowed by CPT Coding. *
 Overall, physicians who billed for E/M services represented 66
specialties, with most specializing in internal medicine, family
practice, and emergency medicine.
* From 2001 to 2009, there were 15 visit types for E/M services. In 2010, inpatient and outpatient
consultations were no longer permitted by CMS for payment, resulting in 13 visit types.
Specific Findings
To illustrate the shift in physician billing, the OIG provided details on
three visit types:
Established Patient Office Visit
Subsequent Inpatient Hospital Care, and
Emergency Department Visits.
Emergency Department
Emergency Department Visits represented the fifth-largest amount
of Medicare payments for E/M services in 2010 and constituted
7.4% of total payment.
 In 10 years, physicians’ billing of the highest level code (99285)
rose 21 percent, increasing from 27 to 48 percent.
 During the same time, physicians’ billing of all other codes
Emergency Department
Emergency Department
The level five increases occured incrementally at rates of 2 to 3
percent each year.
Many commentators, including CMS, consider this to be normal
growth in light of various circumstances that had a causal impact.
Scope of Review
 The OIG did not discuss or analyze specific reasons why the
increase occurred.
 Nor did it determine whether physicians who billed higher level
E/M codes billed inappropriately.
Scope of Review
The OIG clarified that subsequent evaluations will determine:
 the appropriateness of Medicare payments; and
 the extent of documentation vulnerabilities in E/M services.
One of the primary purposes of this study was merely to identify
the key outliers for the subsequent review.
2010: Top Outliers
In 2010, nearly 370 million E/M services were provided by
approximately 442,000 physicians nationwide.
 Of that population, 3,008 had an average E/M code level in the
top 1 percent of their specialties.
2010: Top Outliers
After identifying the top one percent, the OIG then focused on the
physicians who billed the 2 highest level E/M codes within a visit at
least 95 percent of the time.
 The OIG identified 1,669 physicians that fit this category
 These physicians represented less than 1 percent of all
physicians who performed E/M services in 2010.
2010: Top Outliers
2010: Top Outliers
On average, the physicians who billed the two highest level E/M
codes did so 98 percent of the time, compared to others who billed
these codes 53 percent of the time.
 Of the top outliers, roughly half (55% / 916) billed the two
highest level codes 100 percent of the time
2010: Top Outliers
Physicians who consistently billed higher level E/M codes:
 Practiced in nearly all States
 Represented similar specialties
 Treated beneficiaries of similar ages
 Treated beneficiaries with similar diagnoses
2010: Top Outliers
However, some States had a greater percentage of these physicians:
 For example, California had 17% of the physicians
 New York and Florida had 11.3% and 9.6% respectively
 Arizona had 4.3%
2010: Top Outliers
2010: Top Outliers
The OIG found that among physicians who consistently billed
higher-level E/M codes:
 19.8% were internists
 12.2 % were family physicians
 9.9 % were in emergency medicine
Accordingly, of the 1669 physicians identified, approximately 170
physicians were in emergency medicine, and 4.3% lived in Arizona.
Potential Factors for Increase
Potential Factors for Increase
 Increase in sicker patients seeking care in emergency rooms
 More accurate billing
 Increased utilization of clinics and urgent care
 Nurse practitioners and physician assistants are treating less sick
patients who in the past would have been treated by doctors
Potential Factors for Increase
Increased utilization of EHRs has also been suggested as a possible
reason for the increase.
 Those who make this assertion suggest that templates, drop
boxes and cloned records are making it easier to “game the
The AMA addressed the impact of EHRs in depth at a May 3, 2013
teleconference and in subsequent testimony to a congressional
review board.
 They noted that to overcome inefficiencies, various shortcuts
and tools are used in the EHR (templates, macros, and cut &
 The emphasized that none of these shortcuts are inherently bad,
but each of them can be misapplied, accidentally or intentionally.
EHR: AMA Testimony
Alarmingly, some Medicare carriers have already disseminated rules
that if charts look too much alike they will deny payment.
 In this instance, even when EHRs are properly used, physicians
are accused of inappropriate behavior and are being
economically penalized.
 The AHA and others have strongly opposed these rules as being
overly broad and negatively impacting the intended economic
benefit of EHRs.
2013 OIG Work Plan
The OIG is currently reviewing EHRs to determine how cloned
records are being used and if they are associated with potentially
improper payments.
 This issue will clearly continue to be debated
OIG Recommendations
OIG Recommendations
The OIG made three recommendations …..
OIG Recommendations
First, CMS should continue to educate physicians on proper billing
for E/M services.
 CMS concurred and implemented.
 CMS updated E/M educational products and is seeking new ways
of educating providers on proper billing for E/M services, such as
exploring the use of Web-based learning tools
OIG Recommendations
Second, CMS Contractors should review physicians’ billing
 CMC Concurred and Implemented
 CMS issued a comparative billing report aimed at 5,000 physicians
identified as top billers (included the 1669 identified by OIG)
 The report was not intended to be punitive or to be an indication
of fraud
 The report was intended to help providers identify potential
errors in billing practices and help prevent improper billing and
payment in the future.
OIG Recommendations
The third recommendation was to review the top billers for
possible punitive action.
 CMS Partially Concurred and Partially Implemented
 CMS forwarded the names of the 1,669 physicians to MACs.
 However, they directed each MAC to limit its review to the top
10 high billers in its jurisdiction.
CMS Partial Implementation
Why the partial implementation of the recommended MAC
 CMS stated that it and its contractors must weigh the cost and
benefit of E/M reviews against reviews of more costly Part B
 Although initially indicating it would take a limited review of the
issue, recent prepayment audits announced by MACs indicate a
shift in prioritization and focus.
Current Audits and Review
OIG 2013 Work Plan
OIG will determine the extent to which CMS made potentially
inappropriate payments for E/M services in 2010 and the
consistency of E/M medical review determinations.
 This is the key follow-up to the 2012 report.
Outpatient E/M Prepay Audit
On October 1st, 2013, NGS initiated a service-specific prepay audit
for Outpatient E/M codes 99205 and 99215.
 National CERT data indicated that the selected codes are in the
top 15 codes identified for improper payment rates.
 Impacts IL, MN, and WI.
ED E/M Prepay Audit
On October 29th, 2013, Noridian initiated a service-specific prepay
audit for ED E/M code 99285 (level 5).
 The news release did not provide any indication of why the audit
was initiated; however, presumably it is related to trending
reports or issues identified during the initial MAC review.
 Impacts Arizona, along with AK, AZ, ID, MT, ND, OR, SD, UT, WA
and WY.
Service-Specific Prepay Audits
Service specific reviews are based upon the general populations use
of a particular CPT code; whereas in a complex review, the focus is
on a particular provider.
 Claims suspended for medical review are chosen at random
from current claim submissions.
 There is little direct provider contact with this type of review
since the review is based on the general billing of a particular
CPT code, and not the billing of a particular provider.
Noridian Process
You will be notified by letter if your claims are selected for review.
 You will then have 30 days from the receipt to submit supporting
documentation .
 If Noridian does not receive the documentation within 30 days,
the claim will be denied.
 Denials may result in future provider specific complex reviews.
Noridian Process
A determination will be made within 60 days of receipt of claim
 Noridian will post a high-level summary on its website at the
end of each quarter and at the end of the review.
 Providers will not receive an individual notice detailing why
claim(s) were denied and/or paid at a different level of service.
 Providers will only receive a standard Remittance Advice.
Determinations can be appealed per the standard process.
Noridian Process
Audit notices will be sent directly to the practices administrative
 Please advise all front office staff to pay special attention for any
notices coming from Noridian in the near future.
 Please make sure notices received are date stamped and
immediately sent to your practice management firm.
Noridian Process
Please do not be alarmed if you receive a prepayment review
 Claims are randomly selected.
 There is no analysis of specific provider coding patterns.
 It is not an indication that your practice has been flagged.
Surviving an Audit
Surviving an Audit
Recently a large private insurer audited one of our ED clients.
 The trending of this practice has been relatively stable and
consistent with industry practices. No outliers.
 Of the 14 claims selected for review, 11 were determined to be
over-coded to levels 4 and 5.
 They requested an immediate plan of correction and a refund of
the alleged overpayments.
Surviving an Audit
I contacted the lead investigator who agreed to an informal review
prior to appeal.
 The timely response requirements were tolled during the process
 PMAX provided a detailed response for each of the claims at issue
Surviving an Audit
A few weeks later I was notified by the insurer that they were
upholding the decision on each of the claims.
 The written response provided by the insurer contained only
summary conclusions disagreeing with our positions
 There was no detailed analysis of why they disagreed
When I raised the above points, the lead investigator agreed to a
phone call to discuss the issues
Surviving an Audit
During the initial call, it was clear that neither the auditor nor the
medical director was familiar with emergency medicine coding.
 They had relied solely upon CPT Code Descriptions
 Were not familiar with (never heard of) audit tools such as the
Marshfield audit sheet
 At one point claimed that the final diagnosis did not support the
treatment provided
Surviving an Audit
PMAX explained that per the Prudent Lay Person Rule, the final
diagnosis cannot be used to deny payment if the symptoms that the
patient presented with reasonably suggested an emergency
condition in light of the average lay person.
 After the initial call, we also supplied them with a copy of our
audit tool and detailed policies for the positions we took
Surviving an Audit
A second call was initiated that included approximately 12
 Several high level representatives from the insurer’s provider
relationship department
 A representative from the physician group
 PMAX medical director, VP of coding, and myself
Surviving an Audit
By the end of the second call it was clear that the individuals who
had audited and reviewed our claims lacked the experience to
effectively challenge our positions.
 While the insurer had not adopted or agreed to be bound by any
audit tools or additional guidelines, they found the logic and
consistent use of the materials to be persuasive.
 The lead investigator has verbally updated that they have
reversed their position on the claims at issue.
Surviving an Audit
An added benefit to the discussion was the ability to obtain
clarification on several issues relating to physician certification and
the use of scribes.
 CMS does not offer any official guidance on the use of scribes.
While several MACs have issued regional policies, this remains an
ongoing issue that needs clarification at the national level.
 Once the physician in attendance provided the insurance
company with logical, common sense reasons for various protocall, the insurer became flexible and reasonable as to what would
be required.
Surviving an Audit
 Be aware of practice coding trends and understand deviations
from norm
 Be sure to have a consistent application of policies
 Auditors will try and use contradictions against you
 Have confidence in your position
 Use Regional Variations to Support Position
 Do not be afraid to point to common sense
Should you have any questions regarding the topics discussed in this
presentation, or in the event you would like additional guidance on:
 Noridian’s recently announced pre-payment audit of E/M level 5
 Proactive compliance and preparing for payer audits
You may contact me at: [email protected]

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