Medicare auditor targets E&M services for review

The American Medical Association urges officials to abandon the plan for expanding the recovery audit contractor's authority to monitor complex evaluation and management office visits.

By Charles Fiegl amednews staff — Posted Oct. 1, 2012

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A Medicare auditor tasked with reviewing past claims for physician and hospital services in 15 states will start scrutinizing the billing of office visits, claims that previously had been off-limits to recovery audit contractors.

The RAC revealed its plans to conduct limited reviews in southeast and mid-Atlantic states using a statistical sampling to project how many physician claims that used the high-level, established patient evaluation and management code 99215 were paid incorrectly. The contractor, Atlanta-based Connolly Inc., will scour claims filed by doctors and hospitals with dates of service as far back as Oct. 1, 2007.

The Centers for Medicare & Medicaid Services approves the types of services that can be targeted by RACs, which were implemented nationwide beginning in 2009 and which receive a portion of any payments determined to be improper after an audit. The latest decision was publicized in mid-September.

The AMA has opposed the review of E&M codes by RACs. The Association sent CMS a Sept. 11 letter urging the Medicare agency to rescind its approval and reject any other requests to audit office visits by the three other contractors that cover the rest of the nation.

E&M services are complex and based on several components, including a patient's medical history, medication reconciliation and a medical decision by the physician, wrote AMA Executive Vice President and CEO James L. Madara, MD, in the letter.

“Because of the complexity of this type of care, it does not lend itself easily to medical review,” Dr. Madara said. “In particular, based on our historical experience with the RACs, and in light of the fact that the RACs are not required to have same-specialty physicians review RAC determinations, we have no confidence that the RACs will be up to the task of understanding these variables or their clinical relevance.”

Jack Resneck Jr., MD, has had a variety of experiences with RAC audits in his role as the director of Dermatology Faculty Practice Clinics and vice chair at the Dept. of Dermatology at the University of California, San Francisco. Dr. Resneck was elected chair of the AMA Council on Legislation in June.

Physicians have encountered problems with the RAC process, such as inaccurate claims documentation demand letters and large amounts of Medicare payments being withheld as doctors appeal wrongful overpayment determinations. Dr. Resneck's colleagues, for example, have received letters from RACs requesting records for patients that his group had not treated, he said.

“If there is somebody out there who is committing fraud, that's not good for any of us, but in order for the system to work the best, this whole fraud and abuse process needs physicians to be invested,” Dr. Resneck said. “To the extent that RACs unnecessarily harass honest people in the process of looking for fraud, they are not going to have the broader physician community enrolled, which is really what's needed to weed out rare problems.”

Focus on upcoding and cloned documentation

The wide use of office visit codes by doctors and hospitals has been flagged as a program integrity problem by the Obama administration. Physicians bill Medicare for hundreds of millions of evaluation and management codes each year, and $33.5 billion was paid for these services in 2010. A claim for a low-level, established patient office visit received about $20 that year. A high-level, new patient visit paid about $190.

In May, the Dept. of Health and Human Services Office of Inspector General reported that nearly 442,000 physicians billed E&M services in 2010. Of those physicians, 1,669 were found consistently to bill higher-level E&M codes, such as the 99215 code that Connolly will review.

A broader view of coding trends shows increasing proportions of higher-level services being billed during the past decade. The trend has federal officials suspecting that physicians and other health professionals intentionally are inflating code levels on claims.

The new RAC review appears to be part of a concerted effort by the federal government to eliminate improper Medicare billing. In a Sept. 24 letter to organizations representing hospitals, HHS and the Dept. of Justice said there were indications that some health professionals were using electronic health record systems to clone medical record documentation on Medicare claims to boost payments. Upcoding the intensity of care provided or the patient condition also was a listed concern.

“A patient's care information must be verified individually to ensure accuracy: It cannot be cut and pasted from a different record of the patient, which risks medical errors as well as overpayments,” stated the letter, signed by HHS Secretary Kathleen Sebelius and Attorney General Eric Holder.

CMS will continue reviewing records through audits to identify wrongdoers and prevent improper billing, and health care fraud will not be tolerated, Sebelius and Holder said, noting that “CMS is initiating more extensive medical reviews to ensure that providers are coding evaluation and management services accurately.”

Some physicians have seen problems with EHR system defaults auto-filling medical documentation information, said John Holcomb, MD, chair of the Texas Medical Assn. select committee on Medicaid, CHIP and the uninsured. However, those systems are programmed so physicians comply with long-established coding guidelines that all health professionals are supposed to follow.

At the same time, no certified coder reviewing claims and medical records for a RAC is in a good position to determine the complexity of a physician's medical decision-making, a key component of an office visit, Dr. Holcomb said. A coder lacks the training to decide the severity of a past patient visit.

“I'm suspecting this issue is a stalking horse to see how easy it is to find upcoding,” he said. “But most [physicians] are not using the 99215s, because they don't want to be audited.”

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Wide scope for E&M auditor

Physicians and other health professionals in 15 states and two U.S. territories may face audits of their claims for evaluation and management services dating back to 2007. The recovery audit contractor, Connolly Inc., says it will conduct limited reviews of the high level, established patient office visit code 99215. The states and territories in Connolly's jurisdiction are:

  • Alabama
  • Arkansas
  • Colorado
  • Florida
  • Georgia
  • Louisiana
  • Mississippi
  • New Mexico
  • North Carolina
  • Oklahoma
  • South Carolina
  • Tennessee
  • Texas
  • Virginia
  • West Virginia
  • Puerto Rico
  • U.S. Virgin Islands

Source: “Recovery Auditors Contact Information,” Centers for Medicare & Medicaid Services (link)

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Doctors, hospitals win almost half of RAC appeals

Medicare recovery audit contractors receive a contingency fee of 9% to 12.5% of any overpayment they find but must return that money when a determination is overturned on appeal. Physicians and hospitals have a record of success when appealing RAC overpayment decisions, according to an analysis by the Centers for Medicare & Medicaid Services for fiscal 2010. The Medicare agency reported that:

  • 8,449 determinations, or 5% of all cases, were appealed by physicians and other health professionals in 2010.
  • 3,902 cases were overturned in the doctor's or other health professional's favor, which represented a 46% success rate.
  • $2.6 million in recoveries was returned to physicians or other health professionals as a result of appeals.

Source: “Implementation of Recovery Auditing at the Centers for Medicare & Medicaid Services,” CMS (link)

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External links

“Recovery Auditors Contact Information,” Centers for Disease Control and Prevention (link)

“Implementation of Recovery Auditing at the Centers for Medicare & Medicaid Services,” CDC (link)

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