Discover The Power Of Positive Coding

March 15, 2002

Five coding mistakes and how to avoid them

Coding has become the part of medical practice that physicians love to hate. It's aggravatingly complex and ever changing -- and worse, it carries stiff penalties for physicians who consistently code wrong. All good reasons, on the surface, to steer clear of coding whenever possible. Peter Basch, MD, echoes the sentiments of thousands of physician when he wonders, "Why do we code, anyway?"

The obvious answer is that accurate coding is one antidote to the declining health of physician reimbursement rates. "I've worked with practices that are losing 15 percent, easily, to undercoding," says Todd Welter, president of R.T. Welter & Associates, a Denver-based consulting firm.

But is 15 percent worth the trouble of coding conscientiously? Yes, when you consider that the median total medical revenue per FTE physician is $492,648 -- that means nearly $74,000 is potentially lost to undercoding.

On the flip side, practices that overcode on an estimated 10 to 17 percent of claims put themselves at risk for stiff fines, reimbursement of overpayments, possible jail time -- and accompanying attorneys' fees. Physicians feel they are "getting slapped on both sides," says Charlie Koo, CEO and chairman of iMedica, a developer of electronic charting and coding products, based in Mountain View, Calif.

It doesn't have to be that way. The physicians who belong to a consortium of 25 Virginia-based OB/GYN practices may earn an additional $10,000 to $15,000 each next year by coding right. The group, represented by Curt Udell of Health Care Advisers in Annandale, Va., is fighting against one major payer's refusal to recognize their use of a common procedural terminology (CPT) code modifier.

"Insurers don't recognize the modifier at all," complains Udell. "They just trash it." But by continuing to code right, despite the payer's policy, Udell and the physicians he works with may win in the long run.

You can, too. When it comes to coding, let awareness be your ally. If you know what mistakes you're likely to make -- and how to avoid them -- it is possible for coding to work to your advantage, rather than dog you at every turn.

The five areas that follow, which range from complex to common sense, are good places to start:

  • using modifiers correctly;
  • choosing the correct patient category;
  • understanding -- and applying -- appropriate levels of evaluation and management (E&M) service;
  • properly linking ICD-9 and CPT codes; and
  • knowing where to get good help.

Control modifier mayhem

Why bother with modifiers? Quite simply, they improve compensation levels. While there are thousands of CPT codes, it's the 30 modifiers that add that important (and often lucrative) extra level of detail. Modifiers can be attached to a CPT code, further defining the service and, therefore, increasing the likelihood that physicians get paid accurately.

Every coding book clearly explains when and how to use modifiers, but many practices fail to focus on them. "Medical offices are so busy that they probably don't stay up-to-date like they should. It's like CPT coding itself. You get your favorites, and you kind of stick with them," says Welter.

It's not necessary to become an expert in all 30 modifiers. Luckily, understanding how to apply even a few can go a long way to boosting revenue. Here are the key modifiers for most practices:

Modifier -24 applies to an unrelated E&M service provided during the postoperative (or global) period by a single physician.

When would you use it? If a patient presents with strep throat a week after having hernia surgery, and you perform an exam and run a lab test -- services completely unrelated to the hernia -- you can be paid for treatment of the strep throat using -24 as a modifier.

Every surgical procedure, even a simple excision, is connected to a "global period" of zero, 10, or 90 days, as defined in Medicare's relative value unit (RVU) price sheet. If a patient needs care related to surgery within that global or postoperative period, the physician can't bill for it; it is considered part of the patient's postoperative care and would be covered by the original payment for the surgery.

Modifier -79 is similar, but it applies to an unrelated procedure performed during the global period, rather than an unrelated E&M service. To alert the payer that you are billing for a service or procedure unrelated to the global period, you must attach the -24 or -79 modifier. Otherwise, the payer likely will deny the claim.

Modifier -25 applies when a significant, separately identifiable E&M service is performed by a single physician on the same day of another procedure or other service.


"The -25 is what helps you to get paid for an office visit and a minor surgical procedure at the same time," Welter translates.

When would you use it? If, for example, a patient comes in for an annual physical and, during the exam, you notice an odd-shaped mole and remove it, you can bill for the appropriate E&M service and for the procedure by attaching the -25 modifier. Without it, most payers will simply bundle the two services, assuming the procedure was part of the exam. The result? Lower reimbursement.

"If you just assume [the service and procedure are] going to be bundled, you are going to lose money," warns Susan Stradley, a S.C.-based independent consultant with 20 years of experience in reimbursement issues.

Modifier -51 applies when multiple procedures are performed during a single visit.

When would you use it? "Say you are doing a gall bladder and a hernia at the same time -- that's multiple procedures," Welter explains. "You would attach -51 to the procedure of lesser value -- the one with the lower RVUs. The payer is going to discount the secondary procedure. Typically, payers reimburse at 100 percent of fee schedule for the first procedure, 50 percent for the second through fifth, and then 25 percent after that."

Medicare's logic is that they avoid paying the full rate for individual, separate procedures; and they promote greater efficiency that results from performing multiple procedures at once, when possible. There is only one day in the OR, only one preoperative and postoperative period.

Be aware that an increasing number of CPT codes are pre-discounted and exempt from the -51 modifier; CPT coding books will indicate this. Largely, these are procedures that are only performed as part of another procedure.

"An iliac crest graft -- a lot of grafts, actually -- is a great example," says Welter. "You are only taking it to fix something else. So you do not give it a multiple procedure discount, and, therefore, you do not add the -51 modifier. The reason is the relative value has already been written to make it secondary. So to give it a -51 would be a discount on a discount. Offices need to look out for that," Welter explains.

Finally, be aware that you can choose to bill the second procedure at the full rate, or bill it at the reduced rate. The former choice may create chaos in your accounts receivable management system, which will "expect" a higher amount than will be received. The latter option raises the risk that the payer will automatically reduce that rate even further. There is no perfect solution, says Welter, other than to keep a close eye on payments.

Winning the modifier game

Coding expert Emily Hill, president of consulting company Hill & Associates in Wilmington, N.C., advises all physician offices to include commonly used modifiers on charge tickets to ensure that they are billed.

Follow up, too. Routinely check the actual claims for modifiers. "You might have them on the charge ticket, but the billing staff may or may not be applying them appropriately," Hill points out.

Unfortunately, using modifiers on claim forms does not mean payers will recognize or accept them. "Use your modifiers consistently with all payers, whether or not they recognize them. Because you are following the CPT rules, you are reporting accurately. And you don't know which payers are using which modifiers, so just use everything consistently," Hill advises. Monitor explanation of benefits reports so you know what is working and what's not.

Patty Royer, billing manager at Harbour Health in Portsmouth, N.H., wins the modifier game with careful documentation. Wary that payers were ignoring the practice's use of the -25 modifier, she persisted in using it, but added a preventive step to the process: A physician at her practice reviews every claim with a -25 modifier before it goes out, making sure the service and procedure each have complete documentation. Billers then send all the documentation right along with the claim. "There is no sense waiting for it to be denied and then come back to the office. I'd rather take the time on the front end than on the back end," Royer says.

Your other option when payers don't cooperate? Raise hell, like Udell and his group of OB/GYNs are doing. Backed by the power of collective bargaining, the physicians complained to Trigon Blue Cross/Blue Shield about lost revenue and the negative impact on patient care and satisfaction that stem from the payer ignoring documentation containing the -25 modifier.


After all, the physicians argue, if the payer won't reimburse for an exam and procedure performed on the same day, aren't physicians being forced to tell patients who need a minor surgical procedure to come back another day? And isn't the payer unfairly and negatively impacting the physicians' bottom line? Absolutely, says Udell. "We represent 25 practices that all have this problem. Here's what we bill. Here's what the rules tell us. Here's what they pay us ... we get paid less, and it costs us."

"[Use modifiers] correctly," urges Welter, "and then fight them on the managed-care side. Go to the medical director and make a big stink." For Udell and company, the tactic seems to have helped them make progress. For now, Blue Cross/Blue Shield has agreed to review claims for services with modifier -25 for the previous six months.

Patient categories: pick carefully

"Understanding the difference between a new patient and an established patient makes a difference for reimbursement," says Hill. Many practices fall into the bad habit of counting every patient with a chart as an established patient. Those practices lose money. "New patients pay better than established patients," she adds.

For billing purposes, Medicare defines a new patient as any patient who hasn't seen a physician -- or another physician of the same specialty in the same practice -- in the past three years. "Seeing" a patient means a face-to-face encounter identified by a CPT code.

For example, Hill illustrates, if a patient is new in town, calls a physician to get a refill on a birth-control prescription, then comes in for a visit with that physician three weeks later, that patient is a new patient. The first contact -- the phone call -- does not count as a visit since it was not a face-to-face encounter.

The definition of a new patient also means that "in a multispecialty practice, if a patient had been seen by family medicine for a period of time, then goes to pediatrics or OB/GYN or orthopedics, she'd be a new patient again because they are different specialties," Hill says.

Practices that are not careful about the new patient/established patient distinction may be committing a common mistake that is considered fraudulent, warns Hill. Consider the physician who sees a patient for the first time in the emergency room and instructs him to visit the office for a follow-up. When the patient shows up (often, in this scenario, without having made an appointment), the staff does not have a chart for him, nor do they see his name on the schedule -- so they bill the visit as a new patient visit.

"It feels new," Hill acknowledges, even though, by definition, the patient is an established patient.

If new patient visits pay better than established patient visits, consults pay the best of all. Nevertheless, few practices code for consults, thinking it's just plain simpler to code everybody they haven't seen before as a new patient. It might be simpler, but the lost revenue adds up.

Udell, for example, knows of one urologist who lost between $20,000 and $30,000 a year because he coded all of his consults as new patients.

According to the Centers for Medicare and Medicaid Services (CMS), physicians should use a consultation code if "someone is asking for your opinion or advice regarding a specific problem and you are going to give written information back," Hill explains.

Welter offers an easier reminder: "Think of a consult with three 'R's -- a request, rendering an opinion, and a report back to the attending physician" (see "The Three Rs," above).

In primary care, says Hill, "if you are asked to do a preoperative clearance on a patient, even if it's an existing patient, it's appropriate to use a consult code" as long as you provide a written report back.

"Physicians may believe that if they see the patient in consultation and treat them at that encounter, that negates that visit from being a consult. That's not the case. You could order diagnostic tests or provide a therapeutic service, and that visit is still a consultation."


Hill advises practices to review how often each category is billed, at least quarterly. "If you look at a cardiology practice and there's no consultations, something's not right," she cautions.

Get to know E&M levels

Choosing the correct level of service goes hand-in-hand with picking the proper patient type. But there's no need to be infallible when selecting a visit level. Just resist the temptation to "always be loving that one in the middle," says Hill.

Udell suggests that physicians get to know their own E&M utilization curve. Compare your coding levels, from level one to level five, to a national benchmark -- or at least against the coding practices of your partners.

To try your hand at tracking your curve, click on the Tools btton above and go to the E&M Coding Calculator. Or, with paper and pencil, create a bar graph denoting the codes every physician in the practice has coded during a given month. Most coding patterns create a bell curve -- mostly level threes, lots of level twos and fours, and a few ones and fives. If any physician is coding twice as many level fours as anyone else, it's a signal to review his documentation and coding.

Don't expect to map your utilization curve exactly. Codes will vary based on your specialty, location, and patient type. Still, pay attention to levels that lie outside your norm; they are a signal to double-check that the documentation supports the variation. "Maybe you can prove that everyone referred to you is as sick as hell," says Udell. Or maybe you are overcoding.

According to consultant Susan Stradley, one common mistake physicians make is undervaluing their services. After years of practice, physicians can diagnose and treat common conditions so quickly that they think they've done very little. Actually, they've done something rather complicated. "In my experience auditing charts for practices all across the country, easily 80 percent or more of doctors are actually undercoding their services," Stradley says.

For example, Stradley advises, don't automatically make a diagnosis of the common cold a level two. If there is a fever and an upper respiratory infection, it could be a level four. But you must know what makes one level different from another -- and apply it with consistency.

"Know what key statements you need to document for each level," agrees Udell. Using documentation "cheat sheets" can help; just check with several references, whether coding books or industry experts, to make sure the forms prompt you for the right information and are up-to-date.

Udell recalls one form offered as a handout by pharmaceutical representatives, for example, that asks physicians to take a past history by marking off diagnoses. "It looks great," Udell says. The problem is that E&M past histories require a review of symptoms, not a review of diagnoses. Good reason to be discriminating when it comes to coding resources.

One last word on E&M levels: Be careful of the 99211 -- the lowest code of all. Physicians who are unsure might select it, thinking they are playing it safe: "I don't know what level E&M to pick, so I'll just pick the lowest. I can't get in trouble for that." But physician services are almost always legally worth more than a 99211 pays because it doesn't require medical history or decision-making. According to Hill, while registered nurses and licensed practical nurses might find plenty of use for the 99211, physicians will lose out.

Always link diagnosis and service

One common coding slip-up -- failure to link ICD-9 and CPT codes -- may be remedied by improved staff education, or at least enhanced communication.

Typically, physicians check off a CPT code on an encounter form, indicating what service they provided, then simply list the related diagnoses -- the reason for the service -- on the bottom of the form. That means it's up to staff (often people with no medical training) to figure out which service was provided for what diagnostic reason, says Hill.

"Say a physician marks 10 or 12 things wrong on a router slip ... the staff has to make a leap of faith. Often, they don't even know the primary reason for the visit. They probably just grab the first one on the list," Stradley agrees.


If the relationship between the diagnosis code and the service or procedure is not clear, claims are more likely to be denied for lack of medical necessity, resulting in a time-consuming appeal that requires copies of relevant chart notes.

Staff who are well educated in clinical matters can help, but such staff are hard to find and keep. At a minimum, consider educating your team about the procedures and diagnoses you see most often in your practice.

Of course, if physicians code themselves, they don't need to find a way to communicate to staff. They can simply designate an ICD-9 and CPT code as they move along. Otherwise, there is an easy, low-tech solution. Experts suggest labeling the primary diagnosis with a circled "1." Put the same mark next to the related service, then continue this numbering system with the other diagnoses.

Choose your sources wisely

Finally, no matter how carefully practices follow the rules, it's all for nothing if the coding guidelines they are following are out-of-date -- or just plain wrong. Given the frequency with which codes and related regulations change -- and with a plethora of people just waiting to help -- it's not difficult to make the mistake of going to the wrong source.

"Be careful about who you get your advice from," advises Sara Larch, chief operating officer of University Physicians at the University of Maryland in Baltimore. The physician down the street probably doesn't know much more about coding than you do. Instead, seek advice from credentialed and experienced coding experts.

"Don't assume that because you got paid, you [coded] right," adds Julie Williamson, an Ohio-based certified professional coder. "Go to a lot of sources, then pull it all together and decide what to do."

One additional piece of advice the experts recommend is that practices regularly update their encounter forms. Remember that there are more codes than are listed on the encounter form. It's crucial to review them every year to make sure they meet current standards. "Practices try to get as much information on the encounter form or router slip as possible. But there is limited space, and they can't list all the options. Over time, you forget there are other choices," says Stradley.

"It's a pain," Larch admits, but "it's like breathing. You have to do it."

Don't skimp on in-office resources. The Correct Coding Initiative (CCI), published by the Centers for Medicare and Medicaid Services (CMS), provides quarterly updates. Most practices have a subscription to CCI, but few keep them long enough, says Udell. "The date of service dictates which CCI version is in play," he says, urging practices to keep two years' worth of updates on file before purging them. Practices with digital subscriptions will have to be more diligent, since each new issue usually just replaces the old one instead of appending it.

Another key to coding success is education. Physicians should attend at least one coding seminar a year, Welter advises, and staff who are assisting with coding should get as much training as possible. "Most practices are one heartbeat deep on coding," Udell observes. "Instead of putting one person on a pedestal or on the hot seat as 'The Coder,' make coding everybody's business."

So although physicians and coding share a bittersweet relationship, "Look at your coding again, because you are probably losing money," Stradley encourages. With up-to-date resources and careful attention to these five specific areas, you can make more money and avoid risk. By becoming even a bit more accurate, most practices should notice a boost in income. And that can help sweeten the way you deal with coding.

Pamela L. Moore, senior editor, practice management, for Physicians Practice, can be reached at pmoore@physicianspractice.com.

This article originally appeared in the March/April 2002 issue of Physicians Practice.