Boost Your Coding Confidence

March 1, 2003

Medical coding poses as rational exercise. Every service has a code. You document the service you provide. You get paid. On the surface, it seems pretty straightforward.

Medical coding poses as rational exercise. Every service has a code. You document the service you provide. You get paid. On the surface, it seems pretty straightforward.

But add the alchemic CPT rules and the intricacy of treating an actual patient to the mix, and you get a system that tends toward confusion, if not chaos.

The proof? Physicians Practice conducted a simple experiment. We asked four certified coders to identify the best diagnosis and CPT codes from six actual patient charts. In many cases, they gave quite different answers. (See their chart assessments, pages 29-31.)

Read on to find out how dramatic coding variations affect practices' incomes  - and discover some doable solutions for better documentation.

As physicians have long known, coding is as much mercurial art as rational science. It's more like filing a tax return than measuring blood pressure. Or, as professional coder Annette Grady, director of reimbursement at The Bone and Joint Center, in Bismarck, N.D., puts it, the process of coding "is more creative than black and white."

And the impact on reimbursement is significant. Physicians Practice asked four certified coders to identify the best diagnosis and CPT codes from six actual patient charts. In many cases, they gave quite different answers. In the most dramatic terms, if a coder selected all the highest codes, reimbursement for the six visits totals $2,062. If a coder selected all the lowest codes, total reimbursement drops to $1,438. That's a $624 difference just on six visits. Imagine that multiplied over every visit for a year.

Of course, no physician wants to be accused of fraudulent billing, but a changing coding system makes it seem impossible not to code incorrectly from time to time. 

"If the [professional coders] can't [pick the right code], how in the world can [CMS] possibly expect physicians to do any better?" asks Timothy Bopp, an orthopedic surgeon at The Bone and Joint Center who nonetheless codes his own E&M visits, relying on staff only for procedural coding.

"You need to bill for what you do and only for what you do," says Bopp. "And if you've got it documented, you shouldn't bill for less than what you did for fear you might be audited." Logical enough.
At the same time, as our experiment illustrates, simply billing for what you do isn't as easy as it seems - bad news for physicians like Bopp who keep hearing about colleagues being prosecuted for fraud. It's a classic Catch-22.

"Recently, CMS has come out with these fraud guidelines, and we've heard from our public officials about how much fraud is going on in medicine," Bopp says. "There are all these bulletins going around ... about how more and more doctors are getting sued for fraudulent practices. ... It's being publicized a lot more. They've hired a lot more people to actually go out and look for fraud, and if you notice, there are even commercials on TV trying to convince elderly folks to report doctors that they think might be overcharging."

The atmosphere is such that physicians are afraid, even doing their best, that they might still make a mistake - and be punished.
Indeed, undercoding by underconfident physicians is rampant, says Barbara Cobuzzi, who, as president of Cash Flow Solutions, Inc., in Lakewood, N.J., regularly audits practices. "Physicians are so scared of being accused of upcoding that they tend to run 99213s all the time. I call them 'three-spikers.' They run [level] 3s all the time because they want to be safe. Not only are they ripping themselves off now, they are ripping themselves off for the future. They will be measured against what they were billing last year and the year before as an expected pattern. So if they only put 3s, they will always be expected to only put 3s."

In other words, lack of coding confidence is hurting physicians in multiple ways.

Do the documentation

But how can physicians' coding confidence improve when even our coders disagreed so consistently? (See their chart assessments on the following three pages.) Is the coding system really that chaotic? In many cases, we discovered, the problem lay not so much with the CPT codes themselves as with the way different physicians document what they did to arrive at a CPT code. "Physicians have their own language, and it doesn't always match CPT language," observes Grady.

When our panel of coders disagreed with each other, it mostly was because they interpreted the physician notes differently or didn't have enough information to make a definitive choice. Forced to guess what really happened, some coders made aggressive assumptions about what probably occurred. Others played it very conservatively, assuming nothing and coding lower.

In short, the key to the most consistent - and confident - coding is thorough documentation.

For example, in Case 1 (an office visit from a patient with a history of breast cancer) our coders could not tell from the documentation whether the office visit was thorough enough to warrant a level 2, 3, or even a level 4 office visit code.

"There is so much confusion with E&Ms," notes Cobuzzi. "HCFA and CPT just can't get their acts together on how E&M should be. That's half the problem."

For Emily Hill, a certified coder and president of Hill & Associates in Wilmington, N.C., the case involved a judgment call. The history component of the exam meets the requirements for a comprehensive history under the 1997 E&M guidelines. Physicians have an option of using the 1995 or 1997 guidelines, whichever benefits them the most. However, the exam component was more confusing.

The 1997 guidelines require a physician to review all four extremities during a review of the musculoskeletal system to be able to code for a comprehensive exam. In this case, the physician simply noted elements such as strength, range of motion, tone, and tenderness "throughout."

"The coder must decide if this adequately documents an exam of all four extremities, or if more detail is needed," Hill says. "If the coder takes a very narrow view of the musculoskeletal examination, then this encounter can't be coded higher than a 99203."

In other words, the physician probably did enough work to warrant billing a level 4 visit, but because the work is not really documented - "throughout" does not really mean "all four extremities" - a coder who plays it safe would only bill for a level 3 visit. The practice loses $41.02 every time that happens.

Also note that one coder on our panel actually thought the documentation so vague as to warrant only a level 2 visit - a loss of $72.54 for the visit compared to a possible level 4. Clearly, better notes equal better payment - assuming, of course, that the notes reflect what was actually done.

Coders also had a hard time identifying the correct diagnosis code for Case 1. The more specific the diagnosis code, the more likely the claim will be paid without appeal. However, our coders were forced to use unspecific codes because an exact diagnosis was not included in the notes. It would be better, for example, to code the cause and type of neuropathy rather than use ICD-9 code 356.9 for unspecified neuropathy. Similarly, 174.9 for unspecified breast cancer is not as strong an option as a more detailed code.

Documentation was similarly unclear in Case 2 (page 29). Coders could not find evidence of whether it involved a new or established patient. Some assumed the patient was established to play it safe - established patients are reimbursed at a lower level than new patients - but others simply couldn't decide. Information to clarify this point may have been included had coders had access to a full chart, rather than notes from a single visit.

Case 2 also called for some guessing when it came to choosing a level for the visit. For example, Hill notes that, "the associated signs and symptoms [noted in the History of Present Illness (HPI) portion of the exam] might be viewed differently by different coders and providers. Although a single comment can be used in only one area, it is possible to assign one notation to the HPI component and one to the Review of Systems thereby maximizing the type of history."

What is considered history and what is part of the review of systems? Even these seemingly minor issues can add up, making the difference between a 99213 and 99214. Hill suggests that physicians actually label one section of their notes as Review of Systems to make it crystal-clear.

In a real practice setting, a coder would likely become used to a physician's cryptic documentation and code based on her understanding of what the physician really meant. Or, if the physician is doing his own coding, he knows what he did and builds that knowledge into his code, regardless of whether the documentation fully reflects that or not. Unfortunately, this won't help in an audit where documentation has to match the code. Better documentation is key.

Templates help

The reality is, "doctors don't have time for clearer documentation. All of this coding stuff is killing doctors," Cobuzzi says. "[They] are under more and more pressure to see more patients in less time because they are paid so little by managed care. But doctors need to spend as much time as they can with patients ... they need to talk to the patients and spend time ... face-to-face. They don't need to spend time writing it down. But it probably takes five to 10 minutes to document a really good 99214 chart. How can a doctor afford to stay in business if it's going to take him 10 minutes to document a chart?"

Fortunately, there are some tools that can help. For example, templates can help physicians complete all necessary aspects of documentation as quickly as possible. (Visit the Tools area of for sample documentation templates.) But it's important to use them correctly, Cobuzzi emphasizes. "That means every time you have a non-negative finding, you have to write what that finding is about; write what you found," she says; don't just check off a box.

Also make sure any forms or templates are up-to-date and accurate. "I went into a surgical pediatric practice that was using cheat sheets they wrote up five years ago. They never updated them, and the cheat sheets weren't right the first time, either. They were coding wrong over and over again," Cobuzzi warns.
But if you hate how templates bulk up charts, consider investing in a scanning system. You can store older materials on an easy-to-search CD, leaving just current notes in the chart.

Physicians also can solicit help from staff. "Have your clinical staff do the histories. You just review the history and sign off on [it]," Cobuzzi advises. Or hire someone to play the role of scribe, following physicians from room to room and writing down what happens during the visit. That frees up the physician to focus on the patient.

EMRs another solution

Finally, a number of practices have had great success improving documentation - and physician confidence and reimbursement - using electronic medical records (EMRs) as a sort of high-tech template.

Urology San Antonio knew from audits that it was routinely losing money to undercoding. COO Mike Dermer tried everything to get the 18 urologists in his group to improve coding and documentation. The practice even presented a coding compliance program - complete with a physician coding officer - who educated himself about coding and tried to pass that knowledge onto his peers.

The learning sessions "reminded me of study hall in 'The Breakfast Club'," Dermer says. "He'd be teaching them how to code, but unless you're a real coding freak, it's pretty dry stuff. Getting them to implement changes ... into their daily practice was very, very difficult."

Things didn't turn around until Urology San Antonio brought in an EMR - in their case, a product from Physician Micro Systems. The product does not even have a coding component; it does not tell the user what CPT to select. But Dermer says the improved documentation alone boosted physicians' assurance about their coding. "It forces people into documenting appropriately. The old days of a hand-drawn picture of a prostate with a couple of arrows here and there are gone."

The immediacy of the documentation has also enabled the practice to use a full-time billing person to audit about 75 percent of the charts and claims before they are submitted.

"It was impossible to do with paper charts," Dermer says. "With the EMR, the superbill comes back to the centralized billing office where this person is stationed, and she is able to compare the superbill immediately to the chart on the same day. She never has to leave her desk to find a chart." A simple message to a physician clarifies any confusion. According to Dermer, "It has narrowed that window of 'Am I right on this or not?'" The biller, who has years of experience in urology coding, even grades physicians on their accuracy.

What's the bottom-line impact of electronic coding tools? By comparing Medicare allowables for visits in the first half of 2001 (pre-EMR) with Medicare allowables on approximately the same volume of visits in the first half of 2002 (post-EMR) Dermer's practice saw a $175,000 increase - just on visit codes and just on Medicare rates. That's an additional $350,000 over the course of a full year. In the third quarter of 2002, with the EMR running smoothly, Dermer calculated once more, and he now estimates Urology San Antonio is earning about $700,000 more a year - again, in Medicare alone - simply as a result of more accurate coding.

Chris Smeltzer, a pediatrician with Old Harding Pediatric Associates in Nashville, Tenn., uses an EMR by Noteworthy that "has a coding calculator built into it. You plug in the level of complexity of the exam, such as how many body systems you've examined and what history you've reviewed. It suggests a level of coding based on the criteria you met - but the physician is still responsible for choosing the final code," says Smeltzer.
Ashok Kadambi, MD, of Fort Wayne Endocrinology in Indiana, also uses his EMR as a coding tool, and says visits that may have been undercoded as a result of the physician's fear of an audit "can now be properly coded confidently with documentation to support the appropriate level of care. Conservatively, this can increase the top line by at least 10 percent. For example, a clinic with 12 physicians with annual revenues of $6 million can expect an increase of $600,000 in the first year simply based on proper coding. Add to that the ability to service more patients with increased staff efficiency and low turnover, and the benefits do add up."

Keep in mind that not all EMRs are created equal. Coder Marsha Diamond, senior consultant with Medical Audit Resource Services in Winter Springs, Fla., has seen notes from EMRs that make her uneasy. Some systems allow documentation to be just as sketchy as in paper charts. "Only when EMRs are monitored and documentation is still reviewed before signature, is the EMR system satisfactory from my viewpoint," says Diamond.

In short, "there are ways [to improve documentation]," says Cobuzzi. "Unfortunately, these ways cost money. ... But the cost of getting an audit and having to pay that money back is higher, and the cost of underbilling is [even] more costly. In fact, if you start coding right, you're going to see more money coming in the door."
You may call that attitude pie-in-the-sky, but the only other option is waiting for the entire coding system to be thrown out. Bopp, for one, would love to see that happen. "I think that we need to go back to a system where the physician is actually working directly for the patient," he says. "That is, I think we need to be paid for our services by our patients and not by an insurance company, and certainly not by the federal government. ... This would put some personal responsibility back on our patients."

That scenario - a dream come true to many physicians - certainly would solve scores of problems, though there is no reason to expect anything like it anytime soon. In the meantime, simply recognize coding as another of those activities - like filing a tax return or practicing medicine - that at once demands accuracy and guesswork.

Pamela L. Moore, PhD, senior editor, practice management, for Physicians Practice, last wrote about surviving Medicare fee cuts in the January/February issue. She can be reached at

How We Calculated the Medicare Allowable
(You Can, Too)

Get a copy of the Medicare Physician Fee Schedule to be examined. You can get a copy of the 2003 Fee Schedule by visiting the Tools area of

Scroll down to find the CPT code you wish to evaluate, then look to the right and identify the

  • work RVUs;
  • nonfacility practice expense RVUs; and
  • malpractice RVUs for that code.

Download the 2003 Geographic Practice Cost Indices (GPCIs) from the Tools area of Identify your geographic region and note your work, practice expense, and malpractice modifiers. For this story, we assumed all practices studied were located in metropolitan Boston - not too large an urban center, not too rural.

Calculate. To derive the reimbursement amount from the RVUs and GPCIs you've gathered, follow this calculation:
((Work RVU x GPCI Work) +
(Practice Expense RVU x GPCI Practice Expense) +
(Malpractice RVU x GPCI Malpractice)) x
$34.5920 (the conversion rate for 2003).

Visit the 2003 Medicare Reimbursement Calculator in the Tools area of for an Excel spreadsheet that will do the math for you and guide you through the process.

Meet Our Coders 

Marsha Diamond, CPC
Senior Consultant, Medical Audit Resource Services, Winter Springs, Fla. National Advisory Board Member, American Academy of Professional Coders

Annette Grady, CPC, CPC-H
Director of Reimbursement,
The Bone and Joint Center, Bismarck, N.D. National Advisory Board Member, American Academy of Professional Coders

Emily Hill, PA-C
President, Hill & Associates, a consulting firm specializing in coding and reimbursement, Wilmington, N.C.

Todd Welter, MSM
President, R.T. Welter & Associates, a consulting firm specializing in coding and reimbursement, Denver, Colo.