Primary Care Coding Alert

A central focus of Medicares campaign in the upcoming year will be compliance within solo and small group practices, according to Kimberly Brandt, senior counsel with the Office of the Inspector Generals (OIG) Civil Recoveries Branch. She says OIG is drafting a model compliance plan that will emphasize 12 areas that have been identified as particularly problematic with small practice groups, family practices:

1. Kickbacks;
2. Routine waiver of co-payments and deductibles;
3. Billing for services not rendered;
4. Upcoding;
5. Unbundling;
6. Double-billing;
7. Billing for physician services rendered by
non-physicians;
8. Medical necessity;
9. Misrepresenting diagnosis to justify services;
10. Completing certificates of medical necessity for
patients not personally or professionally known by the physician;
11. Billing Medicare or Medicaid for investigational
research, medications and/or procedures without proper authorizations; and
12. Billing for a noncovered service as if covered.

Compliance Plan Saves Moneyand Headaches

The most effective response to Medicares focus on small practices is to develop and follow an internal compliance plan, advises Thomas A. Kent, CMM, president of Kent Medical Management in Dunkirk, Md., who has worked with national medical centers on compliance issues.

Its not difficult, but it can save any family-practice group a lot of headaches, he points out. A compliance plan can be as simple as a short booklet that describes the billing process in your office. According to Kent, components that should be addressed and clearly outlined include:

Which individuals handle the billing process;
What responsibility each assumes in the process;
Who reviews claims that have been denied by
Medicare;
What system is in place to track denials and identify any patterns that indicate errors;
How denial patterns, errors or problems are
communicated to office and medical staff; and
What system is in place to correct problems and
ensure the situation has been resolved.

It is my firm belief that most family practitionersand the majority of other physiciansare very honest, Kent says. Many of the compliance problems arent conscious attempts to defraud the government. They result when someone is documenting or reporting a service incorrectly and isnt aware of it. Unfortunately, when it comes to fraud, the government does not have to prove intent. They only have to show a pattern of noncompliance.

A well-thought-out compliance plan, he adds, indicates that a family practice has made a good-faith effort to comply with national Medicare and local carrier requirements. If you have a plan in place and can demonstrate that you abide by it, it will help you minimize any penalties in case Medicare conducts an audit and finds problems.

Communication and Education Key to Compliance

Another effective strategy, Kent says, is to emphasize educational programs that keep medical and office staff abreast of coding and compliance issues. Obviously, everyone on the billing staff needs to have continuing education about family practice coding. It is an ever-changing and complicated field.

Kent points out that the physicians should make sure they understand these issues as well. They need to ensure that their documentation and dictation clearly support the services provided, for instance. And, if a pattern of Medicare denials is discovered through the practices compliance plan, the physician needs to be informed and involved in solving the problem, he says.

Coding too Conservatively May Constitute Fraud

Kent says that because diagnosis and service coding is so complex, coders must be aware of areas where inadvertent errors may be considered fraud.

Example: Within the realm of family practice medicine, evaluation and management services (codes 99201-99215) may invite scrutiny, he says. Medicare may closely review the record to make sure the physician isnt upcoding one or two levels.

Although upcoding is clearly a problem, Kent warns that undercoding may also cause problems for a family practice. Some physicians and coders assign codes too conservatively, just to make sure their practices arent guilty of over-billing. But this is just as dangerous, and Medicare may also consider this fraud. Their attitude is that they want practices to do it right andwithin this frame of referenceundercoding is just as wrong as upcoding is.

Response to Prepayment Audits May Raise Flags

Another area where physician groups inadvertently may invite compliance scrutiny is when Medicare conducts a prepayment audit. Sometimes, after a family practice submits a claim, Medicare will want to check it out before they pay and ask for all documentation, Kent explains. If its a small claim, the physician may decide its not worth the time or trouble to gather all the paperwork, and let the claim go. This may be a good business decisionbut its a terrible compliance decision.

When there is no response to their request, Medicare may interpret this as the physician lacking sufficient documentationwhich spells trouble. Physicians need to view these situations strategically and understand how Medicare might construe their response.

Why Is Medicare Focusing on Small Practices?

Many family practice coders are questioning why Medicare has targeted practices like theirs. Some say that Medicare is borrowing this strategy from the Internal Revenue Service (IRS), Kent says. The IRS believed that the threat of a comprehensive audit kept the majority of taxpayers honest. Likewise, Medicare may believe the threat of an audit may improve compliance. Certainly Medicare, through the OIG, is indicating its intent to carry out prosecution for fraud to family practices of any size.

He adds that this audit focus follows Medicares systematic audits of medical school billing and does not replace its efforts directed at larger institutions or practices. In addition, Kent notes that some states are beginning to audit Medicaid compliance as well, which ultimately could have a tremendous impact on family practices.