Practice Management Alert

Here's how to tell if your 'bell curve' is out of shape

You could be next in line for an -outlier- audit. So you-re not caught unprepared, learn how private insurers decide what offices are outliers and how to check your coding to reduce your chances of being an outlier.

Reality: Medical offices that find themselves under a private payer's microscope during an audit may wonder why they-ve been singled out. But with billions wasted each year on insurance overpayments, private insurers have to examine their costs sometimes. That is where audits come in, experts say.

-Many offices say: -I am just a small practice here, I don't have to be concerned with an audit.- But someone is going to be audited,- said Stephanie Jones, NR-CMA, NR-CAHA, CPC, vice president of operations at Aztec Medical Systems in Miami, during the recent Coding Institute teleconference -How to Respond to Private-Payer E/M Audits.- (For more information on responding to audits, see -Get SMART on Private-Payer Audits- later in this issue.)

Outliers May Have Many High-Level E/M Codes

When looking for outliers, insurers check a practice's E/M coding patterns. If a practice's coding falls outside the normal coding patterns for its specialty, the practice is a potential audit target.

But even an outlier audit is not a signal to start panicking. Outlier status does not necessarily equal outlaw status with payers, Jones said.

-If your office is an outlier, it does not necessarily mean that you are billing improperly. But you must make sure your coding is accurate,- she said.

-Some audits are random; most are not. Payers usually audit offices that do something wrong, and often the provider doesn't even know it is doing something wrong,- said Dennis Mihale, MD, chief executive officer of Parses, a claims auditing company in south Florida, and teleconference co-presenter.

Hot tip: To see if you may be an outlier, check out this internal auditing trick: Plot a chart of your practice's E/M levels by noting the number of times you billed each level of E/M service last year.

For example, if you billed 99201 (Office or other outpatient visit for the evaluation and management of a new patient, which requires these three key components: a problem-focused history, a problem-focused examination, and straightforward medical decision-making) 25 times last year, you would note that on the chart. Repeat this step for each level of E/M service your office bills.
 
Then compare how many times the office billed each E/M level in the past year.
 
If your office bills too many higher-level codes, this may signal outlier status to a payer. The ideal E/M audit chart would have a bell shape, with the mid-level E/M codes being used more frequently than either the low- or high-level E/M codes, experts say.

Caveat: If your E/M audit chart is not bell-shaped, that does not necessarily mean that your office is billing incorrectly. Your E/M bell curve depends on the type of practice; if the practice treats lots of high-risk patients, you will probably have more usage of the higher-level E/M codes.

For example, Mihale told a story of a surgeon who was identified as an outlier because -his billing seemed to indicate that every patient he treated was in a train wreck.-

-However, it turned out that he was a trauma surgeon,- Mihale said. So, in this case, the surgeon's billing, while not bell-shaped, was entirely correct and legal.

Ask Insurer About Specialty Group

If your office is considered an outlier, there may be a problem with your specialty group, Jones said. 

Sometimes, the insurer will have your practice in the incorrect specialty, which can lead to an audit.

Tip: If you suspect you are in the wrong specialty group, contact the payer and make sure you are in the right one, Jones said.

If your specialty is incorrect, then the insurer should send you a letter stating that your practice is not an outlier.

When this happens, -Keep that letter and frame it- because you may need that proof in the future, Mihale says.