Lessons from OIG Audits of Physician E/M Services (Part 2)

Welcome to part two of this three part series where I discuss six important lessons we can all learn from the OIG’s audits of physician E/M services. These six lessons can help you ensure that your claims are sufficiently documented.

Lesson #3 – OIG Studies Impact Future Code Use

The OIG audit work I’m referencing in this blog post wasn’t published until 2012 to government oversight officials, and then to the public in 2014. However, impact of the audit had already influenced the coding and billing arena in healthcare as early as 2010.

In 2006 the OIG reported that 75% of Office or Other Outpatient Consultation services (99241-99245) and Inpatient Consultations (99251-99255) didn’t meet Medicare coverage requirements in FY 2001 which resulted in $1.1 billion in improper payments.

OIG also found that consultations billed for at the highest level were improperly coded and billed 95% of the time.

As a result in 2010, CMS discontinued payment for CPT codes for consultation services.

Lesson #4 – OIG Utilizes Professional Coders, Clinicians, and Their Tools for Audit

A total of three (3) Certified Professional Coders (CPCs) were utilized for reviewing claims for E/M services who were assisted by a Registered Nurse (RN) for medical necessity determination as needed.

The CPC reviewers independently reviewed a set of records with a standardized data-collection instrument that was based on Medicare coverage and documentation requirements for E/M services and applied relevant local coverage determinations as appropriate.

The reviewers applied both the 1995 and 1997 Documentation Guidelines to determine the appropriate level for E/M services using whichever version was most advantageous to the provider. CMS collaborated with the reviewers for the data-collection instrument and tested it on a separate sample of claims.

Lesson #5 – Audit Reveals Need for Professional Audit Staff and Tools

According to the medical record review, 55% of claims for E/M services in 2010 were incorrectly coded and/or lacking documentation. Medicare inappropriately paid $6.7 billion for these claims, representing 21% of Medicare payments for E/M services in 2010.

A total of 26% were upcoded and 15% were downcoded. Additionally, nearly 7% of claims for E/M services in 2010 were both incorrectly coded and insufficiently documented.

• 79% miscoded claims were upcoded or downcoded by one level
• 17% of claims were upcoded by two levels
• 4% of claims were downcoded, by two levels
• A small percentage (0.8%) of claims were upcoded by three levels
• An even smaller percentage (0.004%) were upcoded by four levels
• No claims in the sample were downcoded by three or four levels

Stay tuned for Part 3 of this series, Lessons From OIG Audits of Physician E/M Services, to learn more about how you can prevent improper payments.

Did you miss part one of this series? Be sure to read it here.