ASSH Business of Hand Surgery Newsletter, July 2008, Vol. 3
The Value of Analyzing E&M Usage
View the article PDF in order to see all graphs and figures.
Prepared by Abigail Igarta, MBA, a consultant with KarenZupko & Associates, a Chicago-based medical practice management consulting firm
As a surgeon, you play a vital role in the performance of the reimbursement process. You must submit visit and diagnosis codes daily for posting and ensure that the documentation supports the Current Procedure Terminology (CPT) codes assigned for the services. Typically, as much as 30% of a hand surgeon’s reimbursement is generated by E&M codes.
Selecting the appropriate CPT code is a compliance issue with the Office of the Inspector General (OIG) as well as private payors. You can protect yourself by determining if you or your partners’ E&M utilization patterns differ significantly from that of your peers. Why is this important? The Centers for Medicare and Medicaid Services (CMS) want to ensure that it has not overpaid for services. Auditors will not hesitate to seek repayment for a service found not properly documented according to the level of service billed. In fact, in some cases, insufficient documentation can be construed as fraud and abuse, possibly leading to civil and criminal penalties.
If the OIG suspects that you have billed Medicare for services you did not provide or manipulated payment code to increase reimbursement amounts, you will be flagged for an audit as outlined in its 2008 Work Plan. The OIG’s investigations include but are not limited to reviewing your medical records documentation, examining computer software used for coding your services, and checking for overcoding or unbundling of CPT services.
From the codes you submit on claim forms, payors assess coding risk by comparing your E&M utilization patterns for new patient visits, established patient visits, and consultations to state and national patterns for hand surgeons. If your coding pattern is significantly different than that of the group average or peer group, you and your practice are at risk for review. Typically, CMS will audit all the physicians in your group -- even if the coding trends of only one or a few triggered the audit.
The following seven steps can give you a sense of how well you and your practice compare to national and state norms.
1. Run a CPT frequency report
Generate a CPT frequency report to provide insight into your practice’s E&M utilization (see Figure 1). This report, sometimes known by another name depending on your practice management software, computes the number of times each CPT code is billed by each physician during a specified period of time. Run the report quarterly once the practice has ascertained a basis for comparison for the practice as a whole and for each physician or provider.
2. Compare practice data to CMS national and state data
Like using an MRI to diagnose and assess diseases of the hand, a specially developed tool can help you compare your practice data to CMS national and state date. One such tool is the E&M Profile Analyzer from KarenZupko and Associates, Inc. (KZA). The Analyzer will help you identify and analyze issues about your E&M utilization.
First, the program graphically compares the group to national and state hand surgeon data published by CMS for each type of E&M service: new patient visits, established patient visits, and consultations. In the example (see Figure 2), the Hand Surgery Practice’s utilization of new patient visits is skewed toward level four services; code 99204 represents 60% of the practice’s new outpatient visits. Other hand surgeons in Illinois and nationally report the highest percentage of services at level three (10-11%). The group’s pattern of level four versus level three utilization is also consistent for outpatient consultation services. Code 99244 represents 51% of their outpatient consults in contrast to their peers reporting 12-14% of services at this level. For established patient visits, the practice uses a slighter higher volume of level three visits (64% versus 46-55%) and slightly lower volume of level two visits than their peers (17% versus 30-41%).
3. Compare provider data to CMS national and state data
You will also want to compare the data for each provider against CMS national and state data. Again, the E&M Profile Analyzer from KarenZupko and Associates, Inc. (KZA) is one tool that can help you do this. The Analyzer graphs each individual surgeon’s code for each category of E&M service against the national and state data. Specifically, in the example scenario (see Figure 3 on the next page), Dr. A’s utilization of new outpatient codes is biased toward level four services (46% versus 10-11%). For consultations, Dr. A reports the highest number of services at level one (31% versus 1-2%) and two (32% versus 30-41%). For established outpatient visits, Dr. A’s utilization is more consistent with his peers, reporting the highest number of services at level three.
Dr. B’s E&M profile is also dissimilar from national and state peers but in a different pattern than Dr. A (see Figure 4 at the end of this article). Dr. B uses a majority of level four new outpatient visits (70% versus 2%) and consultations (86% versus 12-14%). For established outpatient visits, Dr. B uses mostly level three codes than his peers (98% versus 46-55%). Over reliance on a single code is dangerous and could make the group vulnerable to an audit.
4. Calculate the dollars gained or lost due to over- and under-coding
The 2008 updated version of the KZA E&M Profile Analyzer calculates the difference in dollars between the coding profiles of your practice and your locality. For instance, in the example (see Figure 5), the group has reported higher levels of service than that of its peers for new patient visits, established patient visits, and consultations. Imagine if your practice’s data looked like this. If CMS decided to audit your group, your practice would be at risk to write a check for nearly $32,000 for just these 15 E&M codes.
5. Determine your outpatient consultation to new patient visit ratio
Another feature of the KZA E&M Profile Analyzer is the outpatient consultation to new patient visit ratio. Since reimbursement for consultations are higher than that of new patient visits, overuse of consultation codes could potentially trigger a CMS audit. At the same time, underuse may represent dollars left on the table. In the example (see Figure 6), Dr. A’s consult to new patient visit ratio (1.03) is higher than the national (0.88) and state (0.87) ratios, which may flag the group for an audit. However, Dr. B’s consult to new patient visit ratio is closer to his peers at 0.80.
6. Conduct your own internal review
If your E&M profile varies significantly from your peers, you and your group need to assess the risk of an audit. Conduct your own review of the actual documentation. In the example, Dr. B’s overuse of level four codes for new outpatient visits and consultations may flag the Hand Surgery Practice for a payor audit. If the E&M utilization of a physician from your group deviates greatly from the norm, review at least five charts at each level and determine whether the criteria for the category of service as well as the code level has been met. To see if the code criteria are met, consult the 1997 musculoskeletal documentation guidelines for E&M services, available online: http://www.cms.hhs.gov/MLNProducts/Downloads/MASTER1.pdf.
7. Learn from the experience
Use the internal audit results as an opportunity to improve documentation of services and to recognize positive findings. Plan for ongoing monitoring of E&M documentation and implementation of any changes.