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American Academy of Family Physicians
Monday Apr 27, 2009

Another urban myth about coding

Recently, I received a call from a physician who had heard from a consultant that he should code his levels of evaluation and management (E/M) services based solely on the medical decision making involved.  He asked me if this was true. 

As I have done with other callers asking the same question, I assured him that this was incorrect information.  Current Procedural Terminology (CPT) clearly states that all of the key components (i.e., history, examination, and medical decision making) play a role in selecting a level of E/M service (unless you’re coding on the basis of time because counseling and/or coordination of care dominated the encounter).  For some codes (e.g., new patient office visits), all three key components must meet or exceed the stated requirements to qualify for a particular level of E/M service.  For other codes (e.g., established patient office visits), two of the three key components must meet or exceed the stated requirements to qualify for a particular level of E/M service.  In no case does CPT state that medical decision making, by itself, determines the level of E/M service. 

Medicare policy supports this interpretation.  Section 30.6.1, “Selection of Level of Evaluation and Management Service,” of Chapter 12 of the Medicare Claims Processing Manual states, in part, “Instruct physicians to select the code for the service based upon the content of the service.”  That content includes the history and examination. 

This particular urban coding myth grows out of confusion between medical decision making and medical necessity.  As the same section of the Medicare Claims Processing Manual says, “Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT code.”  Using an extreme example, you can perform and document the history, examination and medical decision making necessary for a level-five office visit for a patient with a common cold, but there are not many people who would say that level of service was medically necessary in that circumstance.  In any case, medical necessity is not the same as medical decision making, and medical necessity governs payment, while medical decision making plays but one part in selecting the level of E/M service. 

So the next time someone tells you to code E/M services only on the basis of medical decision making, you might warn them about all the alligators living in the sewer system.

Friday Apr 03, 2009

Pay for performance: It's not just for doctors anymore

It's a different interpretation of pay for performance, but the concept does apply to Medicare's Recovery Audit Contractors (RAC) program. Physicians in California and other states involved in the demonstration program may already understand the ramifications of this effort to recover improper Medicare payments. Now that the permanent program for RACs is gearing up across the country, it's important for all physicians to understand how it works.

The RAC program is different from Medicare safeguard audits like Comprehensive Error Rate Testing (CERT) that focus on identifying error rates for the Medicare payment contractors or postpayment review audits performed by individual carriers. RACs contract with the Centers for Medicare & Medicaid Services to perform post-payment reviews of Medicare claims to find overpayments and underpayments in return for a percentage (from 9 percent to 12.5 percent) of the amounts recovered. Put simply, they eat only what they kill. According to an evaluation of the three-year demonstration program, RACs returned $693.6 million to the Medicare trust funds, after subtracting the dollars in refunded underpayments, overpayments overturned on appeal, and operating costs for the program.

The RAC has two methods of uncovering improper payments - using computer software to analyze claims and auditing medical records. Hospital claims will likely continue to be a focus of their efforts, as was the case in the RAC demonstration program. However, hospitals have mobilized to defend themselves against RAC recoveries. At this time, physicians should not be overly concerned about being targeted but must not expect to be exempt from the program.

You should be aware of your rights in relation to records requests and refunds and how you might avoid some problems. If your practice does not have policies and processes in place to be sure that records sent in response to a payer/auditor request are appropriately screened for accurate dates of service and completeness and returned within the required time frame, I hope you'll schedule a few minutes to discuss the importance of this and establish a standard for your practice. It could save you money and headaches.

The AAFP has joined others in asking CMS to make changes to the program to lessen the burden and the risk to physicians. The AAFP has also put together an online guide to answer questions about the RACs and provide some tips that may help lessen the burden if an RAC does contact you.

It's a shame that honest physicians need to concern themselves with programs like this one, but here's hoping that the contractors do a good job of finding and stopping those few who create most of the concerns about fraud and abuse. They are out there, and now there are bounty hunters looking for them.

Have you had any experience with an RAC? Has the RAC contractor for your area provided any education to physicians? If you have tips that may help your fellow physicians, I hope you will share them.

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