Medicare Compliance & Reimbursement

14.4 percent of claims could have supported higher-paying codes.

For 14.4 percent of claims processed by the carriers, the documentation supported a higher-paying code, according to the Centers for Medicare & Medicaid Services. In fact, not only did the physician perform services that deserved a higher code, but the patient needed a more acute level of treatment.
 
For 2004, CMS arrived at its net estimates of $19.6 billion in overpayments by subtracting the estimated underpayments from the total estimated overpayments.
Two E/M codes, 99212 and 99213, account for 47.1 percent of all undercoded physician claims, CMS says. Only 83 codes out of 9,000 possible codes were undercoded in 2004, and 32 of those were E/M codes.
 
Also, E/M codes accounted for $10,436 out of the $12,565 which carriers underpaid in CMS' sample.

Providers had an even higher rate of undercoding for consult codes 99241, 99251 and 99261, plus emergency room visit code 99281, but the volume of these codes was much lower than for the 99212 and 99213.
 
Certain E/M codes also account for much more than their fair share of upcoding problems, CMS says. In particular, 99233 and 99214 have been on CMS' radar since 2000, when CMS found the documentation for those codes frequently supported 99231 or 99212, respectively.
 
In the latest survey, 50.9 percent of claims featuring 99233 were in error, compared with 61.4 percent the year before. And 18.1 percent of claims featuring 99214 had documentation problems, compared with 24.6 percent in 2003 and a staggering 56.6 percent in 1999. Also, 30.3 percent of claims featuring 99232 had problems.

When a physician upcodes or downcodes an evaluation and management claim, most of the time it's only by one level. That should be considered a matter of professional judgment, because even CMS officials can't always agree on the correct E/M level for a particular visit, says a spokesperson from the American Medical Association.

In its most recent House of Delegates meeting, the AMA urged CMS to give physicians relief from fraud and abuse witch-hunts. The AMA suggested that if a physician is only one level off the correct E/M level, this shouldn't count as fraud and abuse.

The AMA resolved to work with the HHS Office of Inspector General to clarify the criteria that would trigger a Medicare audit and establish new rules spelling out the physician's rights in case of an audit. Also, the Delegates resolved that the AMA should "advocate forcefully" for CMS and the OIG to end all random review of E/M services and to consult with independent peer reviewers before doing any post-payment audits of E/M services.

Finally, the AMA will seek legislation or regulations that will make clear that E/M coding is imprecise by nature and audits should give credit for downcoding along with upcoding.