Coding Matters

March 15, 2001

A conversation about coding and fraud and abuse issues with legal expert Alice Gosfield

Alice G. Gosfield, owner of a healthcare law firm in Philadelphia, has been providing her mainly-physician clientele with straight-talk advice for nearly 25 years. Not surprisingly, she doesn’t pull any punches when it comes to matters of coding. “Physicians need to listen up about the importance of proper coding,” she told Physicians Practice recently. “I understand that our coding system is not the easiest thing to learn. But look, [physicians] got A’s in organic chemistry, they can handle this.”

And, as they learned in medical school, physicians need more than good grades to succeed. With the threat of a crackdown by the Office of the Inspector General for fraud and abuse violations, and the continuing decline in reimbursement rates, Gosfield says doctors must put their shoulders to the wheel and learn to code properly. In the following interview, she explains why physicians are ignoring an issue that could cost them a lot of money (and possibly land them in jail) and provides simple tips on how practices can avoid audits and increase cash flow.

Q: There’s a lot of talk within the healthcare community these days on the importance of proper coding, yet doctors just don’t seem to be listening. Why is the spotlight now on proper coding and why don’t doctors seem to care?

A: Many physicians don’t have a good perspective on coding. The Office of the Inspector General (OIG) isn’t interested in clerical errors; however, the OIG doesn’t like small practices that fail to recognize the standards they should be following. In the last five years, I believe the [healthcare] environment has gotten more intense in terms of fraud and abuse and coding violations.

One element that’s changed the landscape a lot is the “whistleblower” provision: The Department of Health and Human services (HHS) has an 800 number that people use to report fraud and abuse violations with complete anonymity. HHS has to investigate all of those calls. So, if you have someone peeved at you personally or your practice, and the government gets a call, they have to respond. Even if you’ve done nothing purposely wrong, once they get auditing and find errors, then there’s a big problem, whether you’ve intentionally overcoded, undercoded, or whatever.

Q: In your experience, are many physicians intentionally undercoding, or downcoding, just so they don’t get spotted on the OIG’s radar screen?

A: Most physicians don’t downcode because they don’t want to pay that much attention to the coding system - you’d have to figure out what the appropriate code is and then find one that reimburses higher, and that is well beyond the part they want to take in coding.

When it comes to coding, physicians seem to respond with the stages of grief. For instance, there’s denial - “They don’t really expect me to do this”; anger - “Who are they to tell me how to run my practice?”; and bargaining - “Well, fine, I’ll just code everything at the same level.” Unfortunately, just coding at one level is a very good reason for an audit.

Q: What are some other common coding mistakes physicians are making that could lead to an audit?

A: You’re more likely to get audited if you show a pattern; just coding everything the same way isn’t going to save you from an audit. If you’re undercoding, overcoding, using the same code for everything - it’s all incorrect and does have negative ramifications. The OIG can charge $10,000 per claim that’s incorrect.

What really bothers the OIG, though, is reckless disregard when it comes to coding. There are a lot of doctors out there who say, “I didn’t go to medical school to be doing this paperwork,” or, “I hire people to take care of this.” Doctors need to change that attitude and realize they’re still liable, even if they’re outsourcing this or having a nurse do it. It’s still their responsibility. For the OIG to take action you don’t have to have a huge scam going on, just a pattern of inappropriate behavior is enough.

Q: Are there some areas that physicians should check out - even if they think they are coding correctly - in order to safeguard against an audit?

A: One area that physicians run into trouble with is how the carriers are identifying them. Carriers are supposed to be profiling physicians by specialty. The first thing a doctor has to look at is if indeed they are being matched with the right specialty by the carrier - or they could be in danger of being audited even if they’re doing the coding correctly.

Q: What are the chances of that happening, of being misidentified by your carrier and then having to go through an audit?

A: It does happen. I recently worked with a family practitioner who was listed by the carrier as an allergist. Now the problem with that is, the procedures and things that he was coding for his family practice were much different from the codes that are common for allergists, so he got audited. And let me explain that, even if OIG is looking into your coding practices because your carrier made a mistake, once they investigate and find errors, you can’t say, “No, no, stop! This was all because my carrier screwed up.”

Q: Many physicians work for several insurance companies. How can they find out how their carriers list them?

A: To ensure you’re listed properly by your carrier, start by looking at what you’ve filled out when contracting with them. One particular area that can be tricky is a multi-specialty group with a large range of specialties: They have to be careful that each physician is listed by their proper specialty.

We recently had a client, a cardiology practice that hired a part-time family physician, which therefore needed to change its listing to multi-specialty. That one family physician’s codes would have been very different from her cardiology colleagues, and the whole practice could have been audited over a simple logistical error.

Q: OK, let’s say a physician suddenly realizes that, if he doesn’t get his coding matters in order, he will be audited. What can he do to educate himself about coding?

A: Most physicians belong to and are paying dues to some specialty society and these societies usually offer classes or information on proper coding. You can find out from them how to document. It’s also good to go to your specialty society because they will talk specifically about documenting in your particular field of medicine.

A lot of practices will have what’s called a high volume diagnosis, a diagnosis they make frequently because of their particular specialty or patient population. For such things, get the clinical practice guidelines and if you’re doing this same diagnosis a lot, get to know the CPT codes and monitor your own behavior next to the clinical guidelines. This will solve a lot of problems.

Q: Thus far we’ve only discussed how to keep doctors out of hot water with coding. But isn’t it true that proper coding can also help practices bring in more money?

A: That’s right. Physicians should be using ancillary professionals - physician extenders like physician assistants, nurse practitioners, and clinical nurse specialists. If you have one of these extenders see a patient while you tend to another, you can get paid at 85 percent of the physician pay schedule for the ancillary’s work. Most doctors think about it in the wrong way - they’re thinking, “I’m going to lose 15 percent,” when they should be looking at it as gaining 85 percent while they also get 100 percent of their pay schedule at the same time.

Also, if doctors used a more standardized coding system, they could find out if they’re underbilling and could recoup some serious money if they’ve been neglecting their coding. The majority of physicians just aren’t getting it right, but the principle is simple: Do what you bill, bill what you do.

I’m tired of hearing physicians say, “I just want to practice medicine, I don’t want to deal with all of this.” But this is the way medicine is practiced now and it’s not going away. What doctors need to know is coding is manageable, and they can do it.

Joanne Tetrault, director of editorial services for Physicians Practice, can be reached at

This article originally appeared in the March/April 2001 issue of Physicians Practice.