Linda Wilson

Coding and billing audits are time-consuming, costly, and common. 

“It is most likely that at some point in time every provider will be audited at some level,” says Terry Fletcher, a healthcare coding and billing consultant, educator, and auditor. 

Many audits are conducted by the Centers for Medicare and Medicaid Services and its contractors. Private payers, such as Anthem and United Healthcare also audit claims, but they also rely on pre-certifying tests and procedures before they occur to manage costs and avoid denials. 

CMS implemented a new audit program, Targeted Probe and Educate, in August 2017. 

Conducted by Medicare Administrative Contractors (MACs), these audits typically involve up to three rounds of review, with between 20-40 claims per provider, per item or service, per round. The MACs focus on providers who “have the highest claim error rates or billing practices that vary significantly from their peers,” CMS said when it announced the program. 

CMS says the program is designed to educate physicians on proper coding and documentation, reducing denials and incorrect payments. However, if providers fail three rounds, they are referred to CMS for further action, such as ongoing prepayment or post-payment review of claims. They also may be referred to a Recovery Audit Contractor(RAC), which reviews past claims to determine if CMS overpaid or underpaid them. 

CMS also uses random sampling to select claims-including approved and denied claims-for auditing under its Comprehensive Error Rate Testing Program.  

In some cases, the Department of Justice will step in to investigate the possibility of fraud or false claims. For example, in the fiscal year ending September 2018, the Justice Department collected $2.5 billion in settlements and judgements against the healthcare industry, according to a department news release.

When it comes to physicians’ outpatient practices, a lot of auditing and compliance efforts revolve around Evaluation and Management CPT codes-which cover outpatient office visits. 

While it’s not possible avoid being audited completely because payers flag claims based on many variables, there are steps you can take to be prepared if you are subjected to an audit. These steps also may reduce your risk of being targeted for an audit, experts say. 

“We recommend that practices do internal audits, and not just when you open your practice or you close, but that you are consistently doing spot checks on billing,” explains 

, a lawyer specializing in compliance at the Chapman Law Group. 

When you find a pattern of irregularities in coding and billing, you should revise your policies and procedures to prevent those issues from reoccurring in the future. “The number one thing would be to be really, really regimented in your billing policy,” Terpsma says. 

Regular auditing not only helps you correct irregularities, but it also shows CMS that you take compliance seriously. “If you have mistakes that have been happening habitually for the last seven years, and no one has ever looked at why, I, as an auditor, am going to say, ‘You know this is happening. You are just turning a blind eye to it.’ There is no excuse for blind-eye behavior,” Terpsma points out.

-a multi-specialty practice with 397 physicians and 199 advanced practice providers-conducts audits quarterly by randomly selecting 10 electronic notes per provider, according to 

, administrator of coding and education at St. Elizabeth Physicians, which serves the Greater Cincinnati region in Ohio, Indiana and Kentucky. 

“We go in and look at the documentation. We look at the code and make sure it all matches,” Pryor says. 

If providers score 90% or better on audits for two quarters, they drop off the audit list for one year. Providers scoring 80% or less meet one-on-one with an auditor who teaches them how to document and code properly to avoid the mistakes uncovered during the audit. 

St. Elizabeth Physicians uses software to help automate the process of analyzing providers’ documentation. The software also produces reports for each provider detailing the results of the audit, which Pryor says are useful teaching tools. 

“Treat your medical record as a legal document, and make sure you are not complacent in your documentation effort,” Fletcher says. 

Terpsma says the documentation should demonstrate medical necessity, showing payers why physicians developed a given treatment plan. 

This happens when physicians accurately document the three components of an office visit-history, exam, and medical decision making-by strictly following the rules CMS has developed. 

Use auto-coding functionality cautiously 

Many electronic health-records systems include functionality that suggests E/M codes. However, if users do not take time to thoroughly understand the rules and programming behind an EHR’s code selections, the auto-coding functionality can lead to inaccurate coding, Fletcher cautions in an article she wrote in the ICD10 Monitor in May 2018. 

Fletcher recommends that medical practices allow physicians to override an EHR’s coding recommendations, with either a higher or lower code. 

Based on her experience auditing documentation and coding for clients, Fletcher wrote that she’s seen situations where an EMR’s suggested codes did not follow Medicare’s E/M rules. She’s also seen instances where the EHR did not pick up on conflicts in the documentation, as well as cases where the EHR added unnecessary information into the documentation. 

These issues help explain why St. Elizabeth Physicians, which has used Epic’s electronic health record since 2011, does not use the vendor’s auto-coding functionality. “We have that turned off. The doctors are responsible for selecting their code-not the software,” Pryor explains. 

“Train and instruct your physicians that populating a field by click-and-paste method in the EHR, when they truly did not perform the service, is the easiest way to trigger an audit,” Fletcher says.

If providers do copy a note from one location and paste it into another note, they need to then revise the note to reflect the current patient encounter-even if they believe both visits were identical, Pryor explains.  

In E/M codes, upcoding involves billing for a more intensive office visit than what happened. There are two common examples:

Coding a visit with an established patient as a new-patient visit, which gets reimbursed a higher rate because new-patient visits are more time consuming.

Coding a visit as more intensive or complicated than it was. 

If you are going to assign a code to describe an office visit with a higher level of intensity, the documentation needs to support that choice, Terpsma says. 

It is also important not to bill an office visit at the physician rate when a nurse practitioner or physician assistant saw the patient. 

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Terpsma says this usually happens accidentally in fast-paced medical offices, such as when a provider doesn’t sign off on a chart and the coding and billing staffs assume a patient was seen by a physician. 

These situations come to auditors’ attention when a series of claims portray an impossible scenario. For example, Terpsma says she represented a practice that prepared three claims, showing that a single doctor had seen three patients at three separate locations in a half an hour. “That was just a miscode by billing. It wasn’t intentional but again-the red flag,” Terpsma says. 

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Preparing for a coding and billing audit

Edward D. Williams, III, MD, is finally going home.

He’s wanted to practice medicine in a rural community near his hometown since he began medical school in the British Virgin Islands, which followed his undergraduate years at the University of Alabama. 

“I was born in Mobile and grew up in the woods and on the water around South Alabama and never was a city-type person,” Williams explains.

A big step toward that, which he will complete in June, is a three-year rural residency program with Cahaba Family Medicine Residency in Centreville, AL, located in the central part of the state.

After graduation, he will join a primary-care clinic in Lillian, Ala., located across the Perdido Bay from Florida’s panhandle. 

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South Baldwin Regional Medical Center in nearby Foley, AL, owns the clinic. A solo physician owned the clinic for years and recently sold it to the medical center, according to Williams. The plan is for Williams to take over the practice when the veteran physician retires. 

“Rural Alabama is filled with farmers and people I grew up with, and I wanted to get back and help them. I just felt like that was my place,” Williams says.

Williams plans to live in Foley-a 20-minute commute to Lillian-with his wife and young son because Foley is closer to the Mobile area, making it easier for his wife, a teacher, to find a job. 

Williams is unusual among young physicians. There aren’t enough of them willing to practice in a rural area to meet the demand for their services. In its 2019 survey of third-year residents, Merritt Hawkins, a recruiting firm, found that only 2% of respondents wanted to practice medicine in an area of 25,000 or less. According to the survey, the four top factors respondents considered in a job were geography, compensation, adequate personal time, and lifestyle, 

Their resistance to rural practice helps explain why the Health Resources and Services Administration has designated 4,145 rural geographic areas, population groups, and facilities as health professional shortage areas in primary care, impacting nearly 23 million people.

The dearth of medical personnel in rural areas is likely to be exacerbated in the future by these trends:

A looming nationwide shortage as high as 122,000 physicians by 2032, according to the Association of American Medical Colleges. That total includes shortages of between 21,100 and 55,200 in primary medicine and between 24,800 and 65,800 in medical specialties. 

Increasing education levels for physicians’ spouses. In 1960, only 9 per cent of physicians were married to highly educated spouses, compared with 54 per cent in 2010, according to a March 2016 research letter in JAMA. “This is becoming a bigger issue-this spouse needs a career that can only be filled in an urban setting,” explains Travis Singleton, executive vice president at Merritt Hawkins. 

Less diversity among rural physicians. Between 1960 and 2010, the JAMA study also found that physicians who were female, black, Hispanic, young or single also were less likely to choose a rural area than other settings. 

The result of these trends is fierce competition among rural, suburban, and urban healthcare facilities. 

In the Merritt Hawkins survey, 66 per cent of respondents said they received more than 51 job solicitations, while 45 per cent received more than 100. That mirrors Williams’ experience, who says he gets an email a day about open positions. He learned about the job with South Baldwin Regional Medical Center when recruiters visited the Cahaba Family Medicine to talk to the medical residents working there. 

Singleton says the frenzied competition for scarce personnel has led all types of facilities to offer young physicians generous salaries and student loan forgiveness. For years, rural facilities relied on those perks to compete with urban and suburban organizations, he says. 

Nonetheless, Singleton sees a bright spot for rural communities. He senses a backlash among a small percentage of young physicians to “these huge, mega health systems that employ thousands of physicians. It is a worker bee type of mentality,” he explains. Physicians rejecting that work environment want more autonomy in clinical decision-making than is typically the case in larger institutions, Singleton adds. 

 hopes to find. She is the director of physician and provider recruitment at 115-bed Bothwell Regional Health Center in Sedalia, MO, which is about 86 miles from Kansas City.

Her sales pitch includes a discussion about the collaborative medical community in Sedalia, a city of about 21,000 and the economic hub of a two-county rural service area. She also seeks candidates with personal ties to Kansas City. 

Bothwell has a 65-member active medical staff, including numerous specialists. In addition to the main campus, the medical center operates primary-care clinics in Cole Camp (population 1,113) and Warsaw (population 2,115). 

“We are smaller city-chartered hospital. We are still independent,” she says. “In a smaller place, doctors come in and out of the doors and they know each other. They have each other’s cell phones numbers. In a bigger place, you may not even know that you just walked past the neurologist that you just referred [a patient] to,” she says. 

The professional collegiality is among the reasons Brandon Ferguson, MD, accepted a position at Hidalgo Medical Services, a federally qualified health center in Silver City, NM.

Ferguson, who completed the residency program at Hidalgo Medical Services in 2018, says, “Within the clinic there is always someone I can call and talk to up to the chief medical officer,” During his residency in Silver City, he also met a lot of the other physicians with admitting privileges at 68-bed Gila Regional Medical Center. 

Ferguson also enjoys the wide scope of practice-he treats everyone from newborns to the very elderly. And he recently qualified for a DATA waiver from the federal Drug Enforcement Administration, which allows him to treat patients with opioid use disorders in a clinic that is not registered as a narcotics treatment program.

In Illinois, that broad scope of practice is what attracted Matt and Beth Gullone to rural medicine. 

The couple met in medical school at the University of Illinois, married after graduation in 2006, and completed residencies at Memorial Family Medicine in South Bend, IN.

They both accepted positions at Midwest Health Clinic in Galena, IL- the primary-care operation of Midwest Medical Center, a critical-access hospital.

Both Matt and Beth Gullone treat all ages. They take call duty at the hospital one day per week Monday-Friday and about every fifth weekend. 

Beth Gullone, who is fluent in Spanish, treats the clinic’s Spanish-speaking patients-about 20% to 25% of her practice. She also serves as the medical director of the local nursing home. 

In Galena, however, the broad scope of practice is not only a positive characteristic but sometimes a negative characteristic as well, Beth Gullone adds.

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For example, the only local mental health provider is a private organization for victims of domestic violence and sexual assault. As a result, she treats complex cases, such as patients whose bipolar disorder, anxiety, or depression require several medications to control. 

When she treats patients with mental health issues that worsen frequently, she says she is “torn about what to do and where to go from there.” She also feels frustrated when she sees patients who would benefit from counseling, but “there is nowhere to go for counseling.” 

Medicine aside, the rural lifestyle suits the Gullones and their two children. 

“We are definitely happy here. I don’t think I would like a city or even a suburban area,” says Beth Gullone, who grew up on the very outer edge of the Chicago suburbs in McHenry, Ill. “Our kids can run around the neighborhood and you don’t have to worry as much. I definitely feel it is a good place to raise them.”

Physicians who have chosen rural residencies and practices report greater autonomy and a closer peer community.