Orthopedic Coding Alert

What you do before your audit will lay the framework for your compliance plan
 
With all the attention lately on fraud and abuse issues, many practices are ready to plan for their first self-audit but aren't sure where they should begin. Before you start your first self-audit, you need to ask yourself a few important questions and identify exactly what you hope to achieve.

Get to Know the Basics of Self-Audits

What it means: When you perform a self-audit, you-re comparing your physician's billing records, claims, and medical records to verify expected treatment outcomes and medical necessity of services. In addition, you-ll look for appropriate documentation to support fees and reasonable charges for services your surgeons rendered. 

Why you audit: When you audit your physician's services, you can uncover incorrect coding patterns or compliance issues. The plus here is that you-ll discover any problems before an outside auditor (such as one from the OIG or a private insurer) does.

What steps you should take: If your practice has a compliance manual or a policy and procedure manual, it may include a written policy that documents exactly how your audit should flow. If not, you should develop such a policy and add it to your manual. 

The OIG Compliance Guidance for Individual and Small Group Physician Practices can be found at http://oig.hhs.gov/authorities/docs/physician.pdf, and the OIG Compliance Program Guidance for Third-Party Medical Billing Parties is at http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf. You can also obtain this information from consulting firms as well, or from your fiscal intermediary.

If you-re still developing your audit procedure guide, the following tips should help you plan your first self-audit.

1. Decide Which Staff Members to Involve

You should involve every member of your practice in your audit. In particular, you-ll want to hold a staff meeting before the audit to explain what you-re doing and why, and to remind staff members that you-re not trying to get anyone in trouble. Instead, you-re hoping to help them figure out what they-re doing right and determine what they should work to improve that will help the practice ethically bring in more reimbursement and decrease denials.

Following the audit, you should hold another staff meeting so you can share your results with the rest of the staff members. You can educate the physicians about the relationship between clear documentation and accurate coding; you can help the receptionist understand that when she makes an appointment, she should get the insurance information; you can explain to the nurses about collecting family histories, and so on. 

2. Determine How Many Records You Should Audit

If your practice has never performed an audit, you should consider the following factors so you can determine how many records to audit:

- your annual case volume
- how many physicians are in your practice
- the number of coders and billers in your practice.

You should audit at least 10 to 15 records per physician if you-re in an outpatient practice, or 5 to 10 percent of the records if you-re at a facility. If the outcome of your audit shows a compliancy rate of 90 percent or above, you should self-audit once a year thereafter.

If the outcome shows a compliance rate of 70 to 89 percent, then you should perform a repeat audit at six months. If the outcome reveals a compliancy rate lower than 70 percent, you should perform repeat audits quarterly until the compliance rate improves to 90 percent or above.   

3. Prospective or Retrospective Audit?

During your pre-audit staff meeting, decide as a group whether you should perform the audit prospectively or retrospectively.

Here's the difference: During a prospective audit, you compare patient documentation with the codes your practice plans to report to insurers but hasn't yet reported. Essentially, you-re making sure your practice is about to send in a clean claim.

For a retrospective audit, you review paid claims to determine whether the codes you submitted matched what the physician documented, and you examine the explanation of benefits to determine what the insurer paid you for the service.

Many practices perform prospective audits because they can correct the claims before they file. Therefore, they won't have to refund payers or file appeals for wrongly coded claims.

The advantage to retrospective audits is that you can clearly show your physicians what they documented versus what they coded, and explain how much money they left on the table by leaving out important documentation. Show them the EOB that demonstrates what you collected for their service, and tell them what they could have collected if they had documented better.
 
4. Determine Your Audit Focus

Most orthopedic practices audit a mix of E/M records and procedure notes, but you may prefer to audit only one of these at a time. And some practices prefer to perform other types of audits, as follows:

- modifier usage/unbundling audit
- carrier-specific audit
- CPT and ICD-9 code audit
- audit for medical necessity
- audit to determine whether incident-to services were billed correctly.

These are just some of the common areas targeted by an audit. The Office of Inspector General has been targeting E/M visits for upcoding and downcoding in its Work Plan for several years. Upcoding refers to the practice of coding and billing a service that is worth more money, when the surgeon actually provided or documented a lesser service. Downcoding is when you code and bill for a service that is worth less than what the surgeon actually rendered and/or documented.

Many providers think that downcoding is a safe practice to -stay under the radar- of a government audit. According to the OIG and CMS, however, both upcoding and downcoding are considered prosecutable forms of fraud.

5. Select a Person to Perform the Audit

Although many practices designate a compliance manager, coder, office manager or biller to conduct their audit, you may find that a mix of personnel or an outsider should perform the audit, depending on your practice's preferences.
 
In addition, you should decide whom the auditor will report to. Designate one person as the central contact to collect the audit materials.

Susan Vogelberger, CPC, CPC-H, CMBS, is the owner and president of Healthcare Consulting & Coding Education LLC (HCCE) in Boardman, Ohio, and the business office coordinator of the Orthopaedic Surgery Center at Beeghly Medical Park in Boardman, Ohio.