ED Coding and Reimbursement Alert

E/M Coding:

Follow 5 Simple Steps to Benchmark Your ED Practice’s Way to Precise Coding

Published on Fri May 13, 2022

Where do your emergency physicians stand when it comes to national trends?

Nearly every ED staff member has heard that insurance auditors look at coding trends and bell curves to find “outliers,” but it’s hard to know exactly what that means in the scope of your day-to-day operations. Fortunately, there are steps you can take to ensure that your ED practice is coding accurately, and one such step involves benchmarking.

Background: In essence, benchmarking creates a standard against which you can compare your own data to historical internal results or industry standards. Once you know what your practice’s coding patterns look like, you can keep an eye on them to see whether they go up or down.

Check out five tips that can help you institute a strategy that can help you discover trends.

1. Understand What Benchmarking Involves

Benchmarking creates a standard against which you can compare other data. When your ED providers take labs or look at blood pressure, those are benchmarks that you compare against normal values for clinical reasons. For instance, your ED providers know that a pulse of 200 is probably not healthy, a blood pressure of 190 over 120 is probably not healthy. The same goes for your practice’s financial well-being — once you know whether your accounts receivables are healthy, you can keep an eye on them to see whether they go up or down.

This means you should not only compare your coding trends against other emergency physicians nationwide, but also benchmark against yourself. For instance, if you change your billing or coding processes, you have no way of knowing whether the new program is more efficient if you don’t benchmark your current information against your old data.

In addition, you should use benchmarks not just as a measure of past performance, but also to set goals for your practice, in areas such as your revenue or denial rates.

2. First, Compare Against Yourself

Although there are a lot of variables that you can use for comparison, if you’re just starting out with a benchmarking, you should use data that is easily accessible to you.

For instance, profit and loss statements can track a number of key metrics. One would be the operating expense ratio or overhead ratio, which are the total expenses before provider compensation, divided by revenue. This metric a great indication of overall practice efficiency — the management of your expenses.

Another thing you can evaluate from profit and loss statement is staffing cost. This is typically your highest expense category – track that in relation to revenue. Staff payroll expenses, including wages, payroll taxes, and benefits, often represent somewhere around 25 to 30 percent of practice revenue. Using this result as a starting point, it’s often easier to diagnose whether your practice is staffed properly.

3. Determine Your E/M Distribution

Your E/M distribution is also important to calculate so you know exactly which codes you’re reporting the most frequently in each category. Of course, if you see that your E/M usage changes quite a bit from one month to the next, you shouldn’t necessarily panic. Maybe you saw more trauma patients during a certain period and reported a lot of high-level codes for their management, and then the next month you just saw more patients for mild COVID-19, which were lower-level. The key is to look for and identify trends over time rather than taking a snapshot of one month and focusing on that.

If you know the coding trends for ED practices nationally, you can compare your code usage to them (see Check This Breakdown of Which Codes ED Providers Are Reporting Nationwide in this issue for information about national coding trends).

You should also not read too deeply into differences between your coding curves and other ED physicians’. A practice in Florida may be treating older, sicker patients than a practice in San Francisco, and therefore may bill more high-level E/M codes. The key is to ensure that you’re coding accurately at all times.

4. Look at Ratio of Each Code to All E/M Services

It can be a good idea for your ED practice to look at the ratio of a category code to all E/M services, such as looking at the ratio of ED visits to all E/M codes, critical care to all E/M codes, observation to all E/M codes, and so on.

Multiple reference points are helpful when analyzing E/M performance. Bell curves, inter-service, intra-service, and comparison to all E/M services gives you four points of reference to fully understand how the practice is doing with E/M coding.

Keep in mind: National data, along with data from the various states and territories, can be found based on 2019 numbers, (and is therefore pre-COVID), which may be more historically representative than more current data.

Resource: Medicare frequency distributions for the five ED E/M codes and critical care may be found on the ACEP website at https://www.acep.org/administration/reimbursement/2019- medicare-em-frequency-distributions/.

5. Analyze and Educate

If you see trends that indicate that one doctor in your practice reports all 99285s and another reports all 99281s, examine why. It’s possible that one ED physician works shifts during time periods when the ED is less busy. However, it’s also possible that one of the physicians is coding inaccurately, and your analysis should be a springboard to examine both doctors’ records more accurately and launch a training session for them if warranted.