E/M coding under the microscope

“Why are they asking for these notes?”

In 2010, payments from CMS for E/M services were $33.5 billion.  The OIG identifies E/M services a vulnerable to error.  The level of E/M service depends on the key and non-key components documented in the record, and there is a fair amount of gray in the guidelines.  Ask three auditors to audit an E/M note and you may get three different answers, that is, there can be low validity in E/M audits.  It’s expensive to audit E/M notes and a physician might question the auditor’s results and note that a certain sentence should be credited that the auditor did not initially credit.  In fact, when the OIG recommended to CMS that it increase E/M audits, CMS responded that it only partially concurred with the recommendation.  They said, “Based on the findings in this report, the average E/M error was approximately $43.00.  The average cost to review an E/M claim can range from $30 to $55.00.  Therefore, CMS and the MACs must weight the cost benefit of these reviews against more costly Part B services.”

However, in late September, 2012, however, one of the Recovery Audit Contractors (RACs), Connelly LLC noted that it intended to audit three physicians who consistently used the highest level established patient visit, 99215.  They stated that if their audit showed that 99215 was billed incorrectly, they would extrapolate the overpayment amount to these physician’s previous paid claims.  E/M services appear frequently on the OIG report, including cloned notes, E/M services in the global period and “high cumulative” Part B payments, which may or may not include E/M services.  Because of this, most auditors and compliance officers have increased their level of concern about E/M services, despite CMS’s statement that it costs as much to audit a note as they recover.   The difference: extrapolation to previous past claims.

What does that mean?  If a physician or other clinician consistently reports high level E/M services in a category, and a sampling of notes are audited by a payer, the payer will argue that the error rate found represents the error rate for all claims submitted with that code.  What should a practice do?  Audit their high level services, either using an internal or external auditor.

Watch for and respond quickly to pre-payment reviews from both Medicare and private payers.