ED Coding and Reimbursement Alert

No audit plan? Then Your ED could be at risk.

Medicare auditors are stepping up their reviews, but you can only stay ahead of the curve if you scrutinize your own records before they do.

Such was the advice offered by Frank D. Cohen, director of analytics and business intelligence with Doctors Management, LLC, during the January 24 webinar “Building a Risk-Based Audit Plan,” in which he advised practices how to ensure that they’re prepared for claims scrutiny. Check out the following three tips that Cohen offered that can help your ED get its records in ship shape.

Tip 1: Know Most Essential Factor in Your Compliance Program

You probably spent a lot of time and effort creating your practice’s compliance plan, but do you know the most essential factor of it? That would be your audit plan, Cohen said, because without it, your compliance program is nothing more than a policy and procedural binder stuck on a shelf somewhere.

You should check out Medicare’s code utilization statistics and then compare your practice’s to the national averages. If you determined that your code utilization is dramatically different from Medicare averages, then you might pull five charts to start your audit, based on the codes you’ve identified as being performed more frequently than average. If you find issues with those five, look at five more, Cohen said. “If six out of the ten are improper, you may want to pull a statistically valid random sample of at least 30.”

If you haven’t evaluated your code utilization and instead you’re performing a random probe audit, you should pull more charts – typically about 200 per physician, he said. Check whether the physicians are coding and documenting correctly, and then calculate the results and determine your audit schedule.

Some practices say if the charts they reviewed were coded correctly 90 percent or more of the time, they audit annually, then they move to quarterly audits if the success rate is between 75 and 90 percent, Cohen said. If the accuracy rate is between 60 and 75 percent, they audit monthly, and if it’s below 60 percent, they’d audit every claim before submitting. You can use a variation on this schedule at your own practice, he said, or you can simply create the schedule that suits you best.

“When you’re done, set up a trend analysis so you can see from period to period and determine how your education and training worked,” he said. “Did the providers do better or worse? Did they respond positively? Are they immune to training? Because you spend lot of time and money on this and you want to know how it’s working.”

Tip 2: Know How CMS Evaluates Practices

It’s important for practices to know how Medicare auditors review your claims. CMS itself says that it has developed “a variety of approaches over the past several years to audit Medicare and Medicaid claims.” One of those is the Fraud Prevention System (FPS), which CMS introduced in July 2011 as a series of predictive analytical algorithms designed to identify high-risk providers, Cohen said.

“Beginning at that time, 100 percent of all Medicare fee-for-service claims – including your claims – are passed through these algorithms prior to payment,” he said. CMS reported that during the FPS’ first three years, it was able to prevent nearly $1 billion in inappropriate payments from being sent out, and recouped another $2.4 billion in payments that its contractors had already sent to providers, which were later determined to require recoupment.

When reviewers go over your claims, they’re looking for a wide variety of issues. “On the lowest level are just basic mistakes,” Cohen said. “We have a really complex coding system with complex coding guidelines, and there are some 2.6 million edits out there among all payers, so these are simple mistakes like transposed diagnosis or procedure codes.”

Inefficiencies create a lot more financial waste, and include issues like lack of medical necessity, medically unnecessary services, improper diagnosis code linking, and sometimes just bad coding practices by the provider.

The bending of resources often results in accusations of abuse, and that can include improper billing practices such as upcoding, improper referrals, or use of unlicensed or unregistered staff, Cohen said.

There’s also fraud, which involves deception such as billing for services that weren’t provided, or intentionally unbundling services when it’s clear it wasn’t permitted, or even altering medical records. “But remember that fraud only accounts for about three percent of what that total spending dollars are, so it’s a small percentage compared to what we find in the other areas,” Cohen said.

Tip 3: Evaluate the Big Four Focus Areas

ED coders should get to know four main areas involved in provider audits:

Frequency.  Many auditors such as ZPICs like to focus on frequency of improperly paid claims because they can generate, under the False Claims Act, penalties of up to $11,000 per claim -- so for them to meet high dollar recoupments they need to have a high number of those claims, Cohen said.

Procedure Code Utilization by RVU. The RVUs are looked at more by RACs and private payers, Cohen said. “They’re looking at the magnitude of RVUs being reported. RVUs can easily be converted to cost (i.e. dollar volume of services paid), such as the Comparative Billing Reports that come out.” If reviewers discover that your costs for providing services are higher than your peers’, they may investigate further, he added.

Modifier Utilization. “We’ve always seen modifier utilization, particularly with modifiers 25 and 59, but in 2018 we saw a lot more modifier audits that were impacting the 24 and 78 modifiers as well, and I expect that will expand into the near future,” Cohen said.

Time. A certain number of minutes are assigned to every procedure code that has a work RVU, Cohen said. “The analysis is used to determine whether the number of assessed hours a provider reports is reasonable and believable. The government has something called the ‘medically impossible day,’ which is when the physician’s assessed hours exceed 5,000 hours per year -- the government says, ‘we don’t think that is possible,’ and the OIG considers this a big issue that they look at.”

Risk accumulates, Cohen said. “If you have RVU issues and E/M issues and frequency issues and time issues, it significantly increase your profile across the board.”