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 [...]