Orthopedic Coding Alert

Auditors stress that they want to see a bell curve when comparing statistics from an individual practice to national averages. Therefore, if your orthopedic practices stats show a predominate pattern of high-level codes, they figure youre probably upcoding. A way to protect yourself is to review statistics like carriers would.

An increasing number of commercial insurance companies and Medicare carriers alike are using practice utilization statistics from the Health Care Financing Administration (HCFA) to evaluate practices (including orthopedics) for fraud, abuse, and waste. Therefore, coding predominately just one level of evaluation and management (E/M) services (i.e., 99205, 99215, 99223, 99233, 99245, 99255) or one category, such as consults (99241-99255), is downright risky, warn the nations top coding experts.

The [insurance carriers] computers use these statistics to find out how often your practice bills services and procedures in comparison to other practices of the same specialty across the country, explains Susan Callaway-Stradley, CPC, CCS-P, senior consultant for Medical Group of Elliott, Davis and Co., LLP, a healthcare accounting and reimbursement firm in Augusta, GA.

The HCFA statistics include the number, by specialty, of every CPT code billed out at least 10 times in one year.

Patterns that are most likely to cause a further review include straight lines instead of bell curves, and bell curves that are weighted heavily to one side or another, explains Callaway-Stradley, who is also the American Academy of Professional Coders (AAPC) 1998 Coder of the Year.

For example, if the bell curve for your practice showed an inordinate percentage of level five services, auditors might see it as a signal that an overpayment had occurred, says Georgette Gustin, CPC, CCS-P, president-elect for the AAPC, and director of the Health Care Regulatory Group for Pricewaterhouse Coopers LLP, in Detroit, MI.

Most carriers will consider a 15 percent or more variance from the national standards as a reason for closer inspection, adds Callaway-Stradley.

Naturally, the curves that are heavily weighted to the high side will be scrutinized since the potential for overpayment is obvious, but many carriers are also looking at those practices that err to the low side of the curve, she says. The thought process is, Maybe we wont find any overpayments with their E/M services, but they may have other problems from which we can recoup payment because they dont seem to understand the basics of coding.

It Pays to Watch the Numbers

These numbers are being employed to monitor your practice, so you should also know them. Benchmarking your E/M services is a great first step to avoiding problems now and in the future, Callaway-Stradley explains.

For example, if your practice has or is planning to institute a compliance plan, comparing utilization statistics should be included in the baseline audit of your billing processes.

If you have not considered a compliance plan, reviewing these numbers might answer whether there is a glaring need for one in your practice, Callaway-Stradley says. It can also help you determine where your practice may be losing money.

Callaway-Stradley explains how to benchmark your practices utilization statistics.

1. Gather information. Find out how many times in the past year your practice has billed each service or procedure. This can include only evaluation and management services, or it can also include procedures, Callaway-Stradley says. However, procedure statistics are more difficult to measure for a given practice, since patient mix and/or physician skill and subspecialty can noticeably affect them.

As a beginning baseline, she suggests running a report that shows the number of office visits, consults, and inpatient care encounters.

2. Check out the national utilization statistics for orthopedics. To download the raw data directly from the HCFA website log onto www.hcfa.gov/Stats/resource.htm and download the file Procedure code utilization by specialty. The file is available in a Microsoft Access file or an ASCII file. If you choose to download the files directly, you can have access to all the CPT code statistics for your specialty. The file from HCFA contains all of the information for every specialty, so you will have to filter out the information for orthopedics. While downloading the raw data and crunching the numbers yourself is an option, weve done them for the most common E/M categories for orthopedics. (See the chart at the conclusion of this article.)

The statistics contain two headings:

A. Percent within a category. This figure indicates the level of service within a particular E/M category. For example, if you look at level five office consults (99245), youll see that the percent per category is 8.35 percent. That means HCFA says that of all the consult codes orthopedists are billing, only 8.35 percent are level fives.

This is the statistic payers use to determine if you are overbilling a level of service, Callaway-Stradley explains.

B. Percentage of all E/M services. This figure compares the particular type of codeoffice visit, consults, or inpatient to the total number of all E/M services performed by orthopedics.

For example, if you look at the total of consult codes billed, you will see that 7.2642 percent of all EM services were consults and, within that category, 0.5970 percent were level fives.

This is the place where carriers look to determine if your practice is overutilizing one type of E/M service, such as consults, she says.

Once information is downloaded, the spreadsheet file is particularly useful if you like to use what if predictions in your practice, since the formulas for sorting the information can be varied to demonstrate many different scenarios. For example, a specific instance for manipulating these figures is to predict changes in your accounts receivable based on changes in your practice utilization patterns.

3. Compare to HCFA. Comparing your numbers against HCFAs national statistics can help you spot the coding procedures within your practice that might be reasons for an audit and address any potential problems that may cause an audit to be initiated, Callaway-Stradley says.

She recommends asking these questions as you compare the two sets of figures:

A. Are you using all levels of service in your practice? If you are billing exclusively (or almost exclusively) one level of service from any category, you may be facing problems. For example, if you bill 99214 for almost every established patient, your practice could be marked for review.

Note: Many orthopedic practices bill very low-level services for return patients, often to avoid scrutiny. But by doing this, you may be losing large amounts of money to which your practice is ethically entitled.

B. Do you bill only consultation codes for new patients? Even though many orthopedic practices get a large portion of their patient base from outside referral sources, based on the rules of consultation codes, you should have a mix of consultation codes (99241-99245) and standard new patient visits (99201-99205).

You will want to compare not only the percentage of each level performed in your practice, but also the number of consultations as compared to the total of all E/M services. If you bill more consultations overall than other practices, that statistic may cause a focused review by an insurance carrier even if the bell curve of consultation codes for your practice is within acceptable range, Callaway-Stradley says.

C. Are your inpatient services downcoded? Even though most daily visits for an orthopedic practice are included in the global package for surgeries, those visits that you do bill are scrutinized just like every other practice. (See box on Audit Myths and Misunderstandings at the conclusion of this article.)

These codes were some of the most often downcoded during the recent pre-payment audits performed across the country, which means they are likely to be the focus of more active review in the future, Callaway-Stradley says.

D. What other coding variances do you find? For example, if youre benchmarking procedures, you may find one that truly stands out from all of the rest. Looking at procedure frequency may help you capture codes you have missed or to correct bundling errors.

For example, your practice may not be using add-on codes appropriately. Some coders only billed the base codes, but forgot to bill add-ons, Callaway-Stradley explains. When you see what everyone else is billing, it might trigger a similar insight.

Follow Up On What the Numbers Show

Benchmarking alone will not keep you out of trouble with payers, nor optimize reimbursement. After you have performed your analysis, you must use the results, Callaway-Stradley says.

The best outcome, of course, is that you will correctly fall within all ranges. But it is likely that you will have at least one area that needs attention, warns Callaway-Stradley.

Once the problem areas have been determined, you need to compare the documentation in the chart to the codes billed. The chart audit will demonstrate whether your documentation supports the level of service billed and the medical necessity for performing the service. If so, then you will not have to worry if an insurance carrier does decide to review your billing practices.

But if you dont have someone in your practice who is competent in chart-auditing techniques, make sure to hire someone with experience in this area.

You can also schedule training sessions for physicians and staff to discuss coding and documentation issues. Physicians should receive focused training on how to write a good note that will document their services, and how to determine a correct level of E/M service, Callaway-Stradley says. With a few hours of training, physicians can feel much more comfortable in their choice of codes.

One method of installing theoretical knowledge quickly is to accompany physicians on rounds and then review the documentation with them, says Angela Brown, CPC, CCS-P, coordinator of medical compliance education at the University of Louisville, School of Medicine, in Louisville, KY.

Note: One important area of documentation for orthopedists is the history of present illness. Some physicians are confused between the Review of Systems and the exam. They try to make them the same, but the two items are different, Brown says.

Everyonenot just the codershould also be trained in the modifier and bundling issues related to the particular procedures performed in your practice, agree Callaway-Stradley and Brown.

Education is the key to compliance, says Brown. Finally, assign a specific person to continue to perform chart reviews as a mechanism against repeated errors.

To Disclose or Not Disclose

If, during your benchmarking, you find that your practice has been undercoding, will a change in your billing habits draw attention to your practice?

At this point that is unlikely, since utilization statistics are usually reviewed on an annual basis, looking at all the billing for an entire year rather than on a month-by-month basis, Callaway-Stradley points out. Also, since any change in billing that would cause an increase in the level of service would be supported by documentation, your practice should be able to move forward confidently.

But what happens if you find your practice has problems with overcoding and/or underdocumenting?

Then consider this: Repayment may be due. Contact a
healthcare attorney to discuss how to approach this situation. HCFA has instructed the local carriers to be receptive to repayment offers in the case of honest coding errors, and making a repayment will not be a flag for further review, and will not incur penalties and fines, Callaway-Stradley says. But the carriers have also been instructed that if the repayment offer comes as a result of the discovery of fraud within your practice, fraud penalties and fines will still apply even if you offer to pay back money on your own.

The bottom line in benchmarking advice is this: In this time of increased scrutiny of your practices billing habits by insurance carriers, the only adverse thing you could do is to not look at your practice statistics before auditors do.

HCFAs Utilization Pattern for Orthopedic Practices Percentage By Percentage of Category All E&M Office or Other Outpatient Services New patient: 99201 5.54% 0.6068% 99202 24.77% 3.4212% 99203 41.28% 6.7047% 99204 21.21% 2.7229% 99205 7.20% 1.0690% Established: 99211 3.57% 1.5900% 99212 34.81% 21.3529% 99213 43.51% 31.4425% 99214 14.89% 11.2382% 99215 3.22% 2.4626% Initial Hospital Care New or Established Patient: 99221 18.00% 0.2396% 99222 50.41% 0.7836% 99223 31.59% 0.5380% Subsequent Hospital Care 99231 61.30% 1.9519% 99232 32.35% 1.1283% 99233 6.35% 0.3196% Office or Other Outpatient Consultations New or Established Patient: 99241 9.50% 0.4918% 99242 34.14% 1.5897% 99243 36.19% 2.9199% 99244 21.82% 1.6659% 99245 8.35% 0.5970% (total) 7.2642% Initial Inpatient Consultations New or Established Patient: 99251 9.99% 0.3224% 99252 23.72% 0.8575% 99253 35.44% 1.4063% 99254 22.49% 0.9104% 99255 8.36% 0.3111% Follow-up Inpatient Consultations Established Patient: 99261 44.97% 0.2446% 99262 41.91% 0.2413% 99263 13.12% 0.0880% Emergency Department Services New or Established Patient: 99281 7.09% 0.0441% 99282 20.63% 0.1402% 99283 35.76% 0.2842% 99284 36.15% 0.2195% 99285 10.37% 0.0944%

Audit Myths and Misunderstandings Myth 1: The most likely culprit to trigger an audit is a whistleblower. Truth: No. Although concerned patients or disgruntled employees certainly do report alleged inappropriate activity, such qui tam is not the most likely reason for an audit. What tips off auditors is your insurance companys computer as it crunches the numbers to compare your practice utilization statistics to national benchmarks. Myth 2: Our patients are sicker; therefore we can bill a higher level of service. Truth: Wrong. Billing should reflect a variety of levels of service. Theres no way any doctor can see level five patients all day, says Angela Brown, CPC, CCS-P, coordinator of medical compliance education at the University of Louisville, School of Medicine, in Louisville, KY. Specialists, she explains, often confuse coding issues and clinical ones. They select a high level of E/M service because they factor in the patients acuity and co-morbidity, rather than what procedures and services they performed, says Brown, who develops coding training programs for 1,400 teaching physicians, medical students, and residents at 53 billing departments. Being in critical care does not automatically create a level five, she adds. To bill the accurate level, physicians need to narrow down what they actually did during the visit. The patient may have multiple problems, but the physician probably isnt addressing every problem at every visit. Myth 3: My billing service handles everything, so I dont have to worry. Truth: But the orthopedist is still the person ultimately responsible for any overpayments to his or her practice. In fact, in the Office of Inspector Generals (OIG) 1998 work plan, billing services are under close watch. In addition to examining whether the billing service prepared and submitted the claims properly, the OIG will also check to see if the agreement between your practice and the billing service meets Medicares criteria.