Ophthalmology and Optometry Coding Alert

Presented by:  Jim Collins, CPC, CHCC

The following supplement to Radiology Coding Alert is the transcript of a teleconference presented in June 2005 by The Coding Institute. Some information may have changed, be sure to check payer guidelines and your current coding manuals. To obtain the slides for the conference, please log on to our Online Subscription System at http://codinginstitute.com/login and open the PDF version of the current issue, and the slides will be contained therein. If you're not sure how to use the Online Subscription System or need help opening the issue, please contact our customer service department at 1-800-508-2582 or service@medville.com, and one of our representatives will be able to assist you.

The speaker for the teleconference, Jim Collins, CPC, CHCC, is president of Compliant MD, Inc. and CEO of The Cardiology Coalition. As a speaker, Jim excels at making complex billing and documentation regulations easy to understand and apply in practice.  Mr. Collins conducted the first ever specialty specific assessment of the E/M documentation guidelines which revealed that certified coders, averaging twelve years of experience, agreed on the same CPT code in only 48% of cases. The findings from this unique assessment led to the clarification of several "grey areas" in the documentation guidelines that will be presented in this conference.

Thank you very much Mandy and good morning to everybody across the country who is joining in today.  I am Jim Collins and we are going to be talking about evaluation management documentation and billing, which is really a topic that anybody in the healthcare field knows has been a topic for several years now and one that is really not going to be going away.  So it is an area that we are all somewhat familiar with, just because we have been forced to consider it and a lot of physicians are burdened by these regulations, everybody that bills basically any insurance company in the United States is impacted by these rules.

Clarifications From CMS Make Burden Of E/M Regulations Easier To Bear

The rules are relatively vague; they are gray, they can be interpreted in totally different ways.  However, if we fail to follow these rules or if we ignore the rules, we can be heavily penalized and it makes it very important for people to understand these rules.  I am going to be presenting today a really physician friendly overview of these regulations--and is not even an overview, it is a physician friendly in depth review of these rules.  So, if you have got physicians in the room, they are going to get a lot of benefit from it.  Also if you have people in the conference today that are auditing these services on a regular basis, a compliance officer or internal coders, this is going to be a really beneficial conference for you.  And unlike other conferences that you may have attended or other people you may have talked with about these rules, I am really a strong physician advocate in everything that I do and as you will see in the content we are going to present today, there have been several key clarifications that I personally received from CMS through my advocacy efforts that make these rules much less burdensome than you might previously think they are to you.

I have gotten, directly from CMS in writing, several clarifications that take the mountain of these regulations and turn them into a molehill that, really if physicians take the time to understand these regulations and put in place the tools that I'll present to you today to help make these things less of a burden and less confusing, doctors can actually decrease the amount of time that they spend documenting services and increase the revenue and do it 100% safely and compliantly and in an audit proof fashion.  So, that is really the goal today, to get you in the right ball park on these rules take a little bit of the complexity out of the rules and makes them more applicable. 

E/M Services Account For 40% Of Claims Or $28 Billion Reimbursed By Medicare

I like to get you to flip to page number 2, at the top, where I present kind of an overview of why this is such a broad reaching and important regulation.  The biggest reason pf course that is above 40% of what Medicare expenditures are in the part B program--40% is a very, very large dollar chunk.  We are talking about 28 billion dollars this year that the government is going to be reimbursing physicians for providing evaluation and management services.  This is just the Medicare population, which is probably not even half of the total patient base that is out there, so, you can imagine that the Medicare regulations are geared towards auditing services based on these evaluation and management guidelines.  Other payers, whether they will be Medicare, Medicaid or just non-government-related Blue Crosses, Aetnas and Cignas and so on, they are all looking at these evaluation and management documentation guidelines and how physicians are billing for these services because they are accounting for approximately 40% of the claims that are being reimbursed.  So doctors are under the spotlight on these rules and regulations and it is not something that is going to be going away. 

When we look at where the government is focusing their auditing efforts, this is really where it is.  And the reason is twofold; one is that it is a high dollar service, it is going to be a high dollar impact that they get back from it, and also because there is a set of rules that says, this is what it takes a bill a level 3 service, a level 4 service, a level 5 service and they can actually set it up so somebody can come in and audit any given medical record and say whether it was coded accurately or overcoded.  The rules of course are flawed.  You can interpret the same medical record totally different ways.  So it is not a perfect standard that they are using, but is one that they feel comfortable taking to court.  They have been very successful in penalizing physicians in the past.

When we look at the bottom of page number two, you can see the dollar amount that Medicare has been spending in what they call the 'Medicare integrity program,' which is just one of several different initiatives that are out there to audit physician practices, audit healthcare facilities and see if they are billing things appropriately based on documentation and claims submitted. 

Audits Of Physician Practices, Healthcare Facilities Are Lucrative For The Government

You can see that approximately 720 billion dollars is being spent, and that is in 2004, how much money was spent just on auditing investigating healthcare claims, billing data.  They are getting back approximately 14 dollars for every dollar for every dollar that they spent.  So if they put one dollar into the Medicare integrity programs, they are going to get approximately 14 dollars back from it, whether it be refunds or penalties or savings.  So, this is a program that is going to keep continuing in near future.  There is guaranteed funding for it into the next several years.  And because they are getting 14 dollars back for every dollar they put in there, it is really a good place to invest money from the government's perspective.  They are spending billions of dollars to audit physicians and healthcare facilities and they are getting a huge return on that investment.  So, they are going to keep funding these initiatives long in the future.

When you look on pages 3 and 4, what you going to actually see is, what they call the OIG work plan for the last four years and this is just an excerpt from each of them.  But if you really look on pages 3 and 4 of your hand out, which consumes four different slides in the material that we sent today, the government has been looking at evaluation and management services consistently since 2002.  So, if you look, you can see the OIG work plan where they specifically mention that, at the top of page of number 3, they said they are going to be examining patterns of physician coding of evaluation management services to determine whether these services were accurately coded.  Medicare allowed over 29 billion dollars in ENM services on prior years.  We found significant portion of certain categories of these services billed incorrectly resulting in large overpayments.  So this is just their most recent position they put in 2005 work-plan.  Looking at the 2004, 2003 and 2002 work plans, you are going to see that they are consistently looking at evaluation and management services and I will let you read to that material later on, on your own.

Beneficiaries Are Being Turned Into Medicare Auditors For The Benefit Of CMS

On the top and the bottom of page 5, we kind of see how this stuff impacts physicians where the rubber meets the road.  The top of the page is just a screen print from the AARP's web page (American Association of Retired People), and you can see here that they are not only auditing and investigating physicians based on utilization data, like the OIG referenced in their work plan, but they are also auditing based on phone calls that they are getting from patients.  There is an initiative that they have originally called the 'who pays? you pay' initiative, where they essentially told Medicare patients in a number of different formats across the country that the Medicare Trust Fund is going bankrupt and one of the main reasons why is because physicians are submitting fault claims on a regular basis.  They have told these Medicare patients that if they do not ferret out the fraud and abuse and get rid of the bad apples in the bunch, what is going to happen is they are not going to have any health insurance in the future.  They did this in training initiatives, in publications, on the Internet, and also on the bottom of every beneficiary statement.  There in bold print they put, 'if anything on this claim form looks inappropriate, you can call this 800 number and get a reward for it.'  So, we have got, essentially, every single one of our Medicare patient is being turned into a Medicare auditor for the benefit of CMS.  It is never going to benefit the physician practice, but each time we submit a claim to Medicare, the patient is going to be getting a statement that says if this looks like inappropriate claim, you can call this 800 number and you might get a financial reward.  So, there is this incentive that is being given to Medicare patients to really closely scrutinize claims.  What happens as a result of that, is that we have patients calling an 800 number saying, I think this is inappropriate and triggering reviews left and right in a really randomized fashion.  This could be even if a doctor is taking the tact of saying 'look I am going to bill nothing but level 3 services because I want to avoid the audit radar and I do not want to look like and standing up for my peer group.  I will go ahead and take the $120,000 or $150,000 hit on an annual basis just to avoid the risk of audit.'  Even a doctor that does that, he/she can still be audited based on the fact that any given Medicare patient might pick up the phone and say that the claim is inappropriate.  They could do this just because they are confused about a government's statement.  They could do this if you are employing nurse practitioners, physician assistants, and a patient comes in and spends 45 minutes with your nurse practitioner, has the best conversation she has had all month and then comes back home, a couple of weeks later, and gets a statement from Medicare saying they got a bill from the doctor that the patient does not remember meeting with over the last 6, 7 and 8 months.  You know of course, the claim was billed out under the incident-to provision and was appropriately reported under the doctor's number, but the patient might pick up the phone and tell the government, 'some doctor submitted a claim for me for $160 and I have never seen him before, or I have never seen them this year,' for example.  That is going to trigger an audit and then we are going to be accountable to make sure that you are following these E/M documentation guidelines.

Regulations Allow For $30,000 Penalty For A Single Count Of Upcoding

Bottom of page number five, you can just see one example of a physician who did get penalized probably close to the maximum of what a single claim can penalize you for.  This doctor got convicted of a single count of upcoding.  He got penalized with a prison term of 18 months, a $30,000 penalty, three years of supervised release.  And this is all for a single count of upcoding.  In practicality, this was probably a plea bargaining agreement, but this kind of gives you an idea what the regulations are that are out there.  You know the most severe regulations out there do allow for penalties of this nature to be implemented against physicians for billing inappropriately.  So it makes it important to understand these rules and to follow them.

On page number six, I gave you a quick overview of one of the initiatives that I took on year or so ago, and this is where we took on a specialty specific review of these guidelines.  The reason behind the review was to identify best practices for auditing and reviewing medical records so that we could train physicians on how to best document their services.  What I did was I took five evaluation and management services. all from a real cardiology practice, I cleared out any patient identifiers, any practice identifiers, doctor identifiers, and sent out the same five records to 10 certified coders that all specialized in cardiology.  And the reason why we did this on a specialty-specific basis was just because the same set of rules and regulations applies to every single specialty that is practicing medicine.  There are going to be variations from one specialty to another.  And if you are working with a consultant that tries to cater to each difference specialty under the sun, there is going to be a certain percentage of times where they do not recognize an abbreviation that is being used or they do not understand the medical complexity associated with a specific condition and might not give you full credit for it.  So this review is designed to be specialty specific so that we would have people that understand what a PTINR is, what Coumadin is, what congestive heart failure is.  They understand the severity of these conditions and can apply the rules on a unified fashion.

On the bottom of page number six, you see a quick overview what the credentials of these people were and on average, I believe, we had 12 years of experience all certified coders, all working in cardiology groups.  So it was really what I call the cream of the crop that reviewed these records with the thought that we are going to get back really similar audit findings because they are all looking at the same exact five medical records.

On the top and bottom of page number seven, you can see the data from this review.  The top of page number seven shows, chart-by-chart basis, then it also breaks it down by the assigned levels of history, exam, complexity, the service code, the level of service that was reported, and also the service type.  And you can see just looking across each of these different lines of data, you can see that there are considerable variations from one coder to the next as far as how they reviewed each of the five different claims and assign a code.

Proof That E/M Guidelines Are Inherently Flawed

At the bottom of page number seven, it kind takes all that data and puts it in to a nice understandable format for you.  In a nutshell, we had a 48% degree of correlation, and 'correlation' is just saying, if we were to take any given chart and assume that the most frequently assigned code was the correct code, how many of the ten auditors actually assigned that most commonly reported code?  So, we are not saying whether this was the correct code or not, we are just saying this was the popular code based on this audit.  How many people pick that most popular code?  And on average only 48% of the people picked the most popular code in the review, which to me is the shock because: 1) it is a specialty specific review; 2) everybody is applying the same exact standard; 3) -everybody understands every single word that was documented in the report.  So, this really shows that the guidelines that were applying are flawed.  There is nothing wrong with the people that reviewed these records, there is nothing wrong with the medical records themselves--they were all very clearly legible, I believe they were all transcribed out as opposed to being hand written and interpreted different ways.  This really clarified for me that the guidelines are substantially flawed, when we do not even get half of the people agreeing on the code. 

So, I come from the perspective that the rules are problematic, they distract physicians from patient care.  However, because we can get a $30,000 penalty for a single count of upcoding it makes it so you really have to take on the effort to educate your physicians about this.  You also have to be reviewing their medical records and their billing data on a regular basis, whether you do a quarterly or twice a year, even if you want to do it monthly--it is a good investment of your time and resources because if you do not take on these initiatives, you can get heavily penalized to the point that is going to shut your practice down.  Also what you will find in auditing these services and taking on training initiatives, is that doctors can work less and make more money.  And that is really a good goal to have because you are going to have the best the both worlds here. 

How To Pick The Right Level Of Service Every Time

So with no further ado, we will dive in and start talking about what the concern, is what is the whole area that we need to focus on with assigning different service levels?  And that is really the most complex element here with E/M coding--understanding how to pick the right level of service and doing it in a consistent fashion, one that is audit proof.

On the top of page number eight, it shows you what the unadjusted allowed amounts are for Medicare patients.  This is just the national average; of course your individual carriers, you are going to pay slightly more, or slightly less than this, based on local geographical adjustment factors like the cost of employment and how practice insurance rates in your area and all these other things.  But this gives you a good ballpark--a level 1 service pays a little bit over $20, whereas the level 5 service pays about $100 more than that.  When we see an established patient in the office, the doctor has to choose, was this a level 3 service or was this a level 5 service?  If they choose the level 3, they are going to get above $53 for it.  If they choose the level 5, they are going to get more than twice that amount and because the doctor is the one that is going to be receiving the check, there is this incentive to start billing higher levels of services.  Just because if you put down a 5 instead of a 3 you are going to get more than double your reimbursement, which is a pretty good incentive to bill level 5 all the time.  Actually, when AMA first introduced evaluation services, there were three different levels of service out there, and what we started to see on a national level was a tendency of providers to just bill all level three services; so they converted these into these five different service levels for certain service types, like consults, evaluation and management services, office-based evaluation and management services.  They have got three service levels for hospital admits and hospital follow up services; but what they started seeing was as soon as they converted, doctors started leaning towards the highest levels of the service, which, to the Medicare program, spending 40% of their budget on these specific services looked like it was an abnormality.  They came out with an initiative that said we are going to penalize you if you bill a level 5 when all you really provided was a level 3 service.  So they are looking for doctors that are consistently billing the higher level of this service, but actually providing a lower level of service. 

Guidelines For Billing A Level 3 Versus A Level 5

Based on pressure from physicians, CMS, the American Medical Association came out and developed the different sets of documentation guidelines so that physicians would have a guideline to follow that would basically prevent them from getting penalized for overbilling.  Doctors said, 'we are going to be providing level 4 and level 5 services.  What does the documentation need to reflect so that we cannot get penalized if we get audited?'  And that is where the guidelines came from, they came at the request of physicians across the country, through specialty societies and so on, so it is really an important set of rules to understand because it is applicable, we asked for it and we got it. 

Only A Very Small Percentage Of Patient Encounters Should Be Billed Based On Time

When we look at, what does it take to bill level three versus a level five, there are a couple of different pathways that you need to consider, which I have mapped out on the bottom of the page eight for you.  The first thing is, you have to determine do you want to bill based on time or do you want to bill based on the documentation, elements of history, exam and medical decision making?  If we bill based on time, it is really going to be a cut and dry path to follow.  One sentence is going to be basically support the different service levels.  However, there is only a very small percentage, for the average physician, of your patient encounters in which you are going want to follow those time guidelines.  We are going to talk about that first because we can really fully address that in a relatively short period of time and then we can devote the rest of today's conference to focusing on the evaluation and management documentation guidelines for history, examination and medical decision-making. 

If we are going to go down that pathway, as you can see on the bottom of page number eight, we also have to make another decision and that decision is, do we want to bill based on with they called the 1995 documentation guidelines or do we want to bill based on what they call the 1997 documentation guidelines? 

In 1995 the first set of rules came out and after it was implemented, we had a lot of specialty physicians complaining 'I might not be doing a full general multisystem examination on my patient, but I am a specialist, I am providing a very intensive review of a certain single organ system, I still want to be able to bill out level 4 and level 5 when I provide them.'  There was a lot of merit behind that assertion so the government came out with an initiative to kind of compensate for that specific factor.  They developed another set of guidelines in 1997 that was really geared towards the specialist.  And it said, 'if you provide a really extensive review of this single organ system--whether it be neurological or cardiologic or genitourinary, or whatever--if you do a very extensive head to toe review that is really just specific to this one organ system, you can still bill at these higher level of service, but here is the specific bulleted elements that you need to be documenting, pertinent to your specialty in order to bill level 4 or level 5 services.'

Why Full Conversion To The 1997 Guidelines Was Put On Hold

The 1997 guidelines when they were developed were intended to replace the 1995 guidelines that become the only standard.  Of course once we reached the deadline where they were supposed to switch over from allowing the 95 guidelines to forcing us to use the 97 guidelines, there was just one of the most unanimous outpourings from every single physician specialty across the country putting pressure on the government to not make that switchover happen.  The 97 guidelines are really burdensome, bulleted elements, shaded boxes.  It really took it to the point that it was crippling physicians' ability to care for patients and to document things that are medically appropriate and doctors were really forced to examine things that they did not feel were appropriate if they wanted to be able to bill out even a level 4 service.  So at that time, after the government felt that pressure from pretty much all the physicians across the country, they said that there are going to put the conversion to the 97 guidelines on hold.  They said until they came out with a better set of rules what they would allow is either the 95 or the 97 guidelines in the event of an audit, which ever set is more beneficial to the doctors is the set that applies. 

In a little bit, we will talk about the distinguishing factors between the 95 and 97 guidelines, but first I really want to talk about that first pathway on page number eight for you, which is billing based on time, because it is totally different methodology that needs to be followed--billing based on time as opposed to history, exam and medical decision making.  So we will talk about time first, get it behind us and then focus on the more voluminous set of the guidelines, which are history, exam and medical decision making.

One the top of page number nine, you can see that, like I mentioned a minute ago, these time guidelines are not beneficial for most patients.  The portion of your patient base that it is going to be billed based on time is going to be those patients where the doctor is spending an exorbitant amount of time counseling the patient and coordinating their care as opposed to providing a traditional history and physical for the patient. 

Guidelines For Billing Time In The Office And In The Hospital

There are actually two different standards of time guidelines, one is office-based and the other is hospital-based.  If we are dealing with an office-based service, what they want to see is that the majority of the face-to-face time between the patient and the physician--and it is an important distinguishing factor to make  because it does not count the amount of time that the patient spends registering at the front desk, it does not count anytime that was spent with the registered nurse in the examining room (if the nurse came in to take the chief complain