Otolaryngology Coding Alert

Starting with a baseline audit will set your practice up for success.

Would your practice pass the test if a payer auditor showed up at your otolaryngology office? You should be using internal chart reviews to evaluate your practice’s compliance and billing processes — before someone else does.

Reap Internal Review Benefits

Performing internal audits can help you ensure billing and coding compliance and may also point to money you’ve been leaving on the table. Finding problems early helps alleviate risk.

Audits will also uncover inconsistencies in documentation and coding so you can focus your staff education. For example, maybe something conveyed was misunderstood or confusing, and that will come out in the audit.

Another example: One of your ENTs tends to report 99213 (Office or other outpatient visit for the evaluation and management of an established patient ...) for virtually all of his office encounters with established patients, even if documentation could support a higher-level code. The national non-facility Medicare fee for 99213 is $72.81 (based on the national conversion factor of 34.023). The non-facility fee for 99214, by contrast, is $106.83. Internal audits can show when you can earn approximately $34 more for each encounter that qualifies for 99214 instead of 99213.

Start With a Baseline Evaluation

Begin your efforts by performing a baseline audit — the first comprehensive audit your practice undergoes. Then you can decide how often you will perform internal audits each year.

Purpose: With the information gleaned from a baseline audit, you’ll be able to streamline future auditing efforts and focus on the most important areas to you and your insurers. Your goal is to get each provider and biller as close to 100 percent compliance and accuracy as possible. The baseline will help you decide how frequently you need to perform future audits and also help you determine the areas for improvement that your practice should focus on between audits.

Going forward: How often you perform internal reviews after the baseline audit depends on several factors, including your time and staff resources, the baseline audit’s results and your practice’s size. In most cases, plan to perform an internal audit at least once per year, and more often if you find high error rates.

Follow a Checklist

Your first step in the auditing process is to narrow the parameters of your audit. Sample questions to answer before starting include:

·         What is the focus of the audit?

·         What will the audit's scope be?

·         How will you select charts/encounters? Will you have a set process of selection for each provider, or will you randomize the chart selection?

·         What documentation will you review? Select charts (either electronic or paper) and organize supporting documentation, such as physician notes, account billing history, CMS-1500 forms, and explanations of benefits (EOBs) or remittance advices, to review during your audit. If your practice is doing everything according to what the payers require, the next step is to determine whether you have supporting documentation.

·         Why am I finding denials? During an audit, or even during a separate billing review, you should be reviewing denials. If your review shows that your billing practices are perfect but claims are still being denied, you need to investigate and appeal, as appropriate.

Get to Know the Audit Types

Basically, there are two types of internal chart audits:

·         In a prospective audit, the practice examines new claims before it files them.

·         In a retrospective audit, the practice examines paid claims.

Which works best? It all depends on the practice.

A prospective audit is more of a billing validation check and is the safest from an auditing perspective, as problems can be identified and corrected before the claim is submitted to the payer.

Drawback: While prospective audits may be the safest route, the method is not without its potential pitfalls. It is advantageous to do prospective chart auditing because this allows for correction of errors and capture of missed charges prior to the billing of the claim. However, this type of chart audit can delay billing, thus impacting cash flow.  Additionally, the billing and payment information is not available to audit the entire revenue cycle with a prospective audit.  Only the documentation and coding may be audited.

On the other hand, the retrospective chart audit does not delay billing, and the audit process can proceed more quickly because the entire payment process is completed before the beginning of the audit. However, a retrospective audit only catches mistakes after they have been made, and sometimes, that is more costly than preventing them. It is imperative that mistakes are fixed and corrected claims sent into the payers, with the appropriate refunds if overpayments are identified during a retrospective audit. 

Whether the audit is prospective or retrospective, best compliance practices indicate that the practice may need to consider looking back 6 months to a year and self-reporting if a large discrepancy in coding and documentation is uncovered.  However, before doing any self-reporting and refund of this type, make sure the practice engages a healthcare attorney to guide your actions.

Set a Twice-a-Year Auditing Goal

The frequency of your audits will depend on the size and type of your practice. However, the more often you can audit, the cleaner your claims will be, so experts recommend frequent audits.

Larger offices may have resources to conduct audits on a continual basis with different areas of focus throughout the year. Smaller offices may have the resources to conduct monthly or quarterly audits.

Baseline: You should conduct an internal chart audit on each physician at least twice a year. If you identify a billing or coding problem, that interval should become more frequent.

When deciding on audit frequency, consider the amount of resources the practice can devote to the audit while simultaneously conducting day-to-day office business. Audits may be performed by internal staff or outside contractors may be utilized to perform audits for the practice.

Focus Audit on Commonly Billed Services

Your internal chart audit should deal chiefly with procedures and services that your office provides every day, experts say.

Example: Multi-disciplinary medical offices often have a set schedule, in which they audit different services at different times of the year.

Most offices should concentrate on their evaluation and management code levels during an audit, because E/M leveling is always looked at carefully by many payers. However, because your surgical procedures represent the bigger dollar encounters, you do not want to forget to audit these services for documentation, coding, billing, payment, and denials.

Try this: When a medical office is setting up its own internal audits system, consult the Work Plan from the Office of the Inspector General (OIG). This provides information on those services that have been identified as potential areas of fraud or abuse. You can find the OIG’s current Work Plan online at http://oig.hhs.gov/reports-and-publications/workplan/index.asp.