How to Ensure Accurate Medical Coding

April 2, 2013

How to avoid the most common coding mistakes that lead to lost revenue at your medical practice.

For small to midsized medical offices struggling to get by, educating staff about proper coding is often low on the list of spending priorities. But failing to do so may be contributing to their downfall, experts say, as coding mistakes are a major source of lost revenue.

"Most small offices don't do audits and have no idea that they're doing anything wrong and losing potential revenue," says Lynn M. Anderanin, senior director of coding, compliance, and education for consulting firm Healthcare Information Services in Park Ridge, Ill.

Anderanin says she routinely finds the same errors repeated when auditing her clients' charts and reviewing their procedures. Many stem from a lack of education about the latest coding additions and changes, leading to misuse of modifiers and coding at the wrong service level. Another big problem is lack of staff dedicated to following up on denials.

"Practices miss revenue when the billing staff doesn't correct and resubmit denied claims," says Nancy M. Enos, coding consultant for the Medical Group Management Association and a coding instructor for the American Association of Professional Coders (AAPC). "And if the back office doesn't tell the front office what mistakes they're making, they won't be able to correct them and learn from them."

Anderanin, Enos, and other experts weighed in on some of the most common coding mistakes they see everyday leading to lost revenue. Most can be avoided, they say, through educating staff and devoting resources to fixing the problems that cause claims to be denied.

Front-desk problems

The potential for error begins as soon as a patient walks through the door, with registration and insurance verification. Inaccurate personal or insurance information recorded at the front desk leads to a significant number of denied claims, says Enos.

In busy small practices, front office staff may simply copy the patient's insurance card without taking the time to verify that she is still covered under that plan, Enos says. Other common errors include recording incorrect policy numbers, failing to authorize services, and entering the wrong name, address, guarantor, and even gender.

"If you write down the patient's name as 'Skip Brown' because that's what they told you - but the insurer only knows 'Walter Brown' - then they're not going to pay that claim," she says.

Patients sometimes unknowingly submit the wrong insurance information, says Anderanin. For example, Medicare patients who enrolled in the Medicare Advantage Program might submit their old Medicare card and assume it's the same program, but Medicare Advantage operates independently from traditional Medicare.

If staff fails to verify the Medicare card, the claim gets sent to the wrong place and the office doesn't get paid until it is sent back, corrected, and resubmitted, she says.

"You can document the right procedure and code the right way, but if you send it to the wrong insurer it won't get paid," says Raemarie Jimenez, who manages the clinical development of AAPC's exam program and oversees development of content for its coding certification exam. She recommends always asking the patient a direct question ("What is your insurance?") as opposed to whether anything has changed since their last visit (they'll usually say "no"). Then verify the information online.

Misusing modifiers

Another common coding error is misusing modifiers, especially modifier 25 indicating that the physician performed a separate evaluation and management (E&M) service for the patient on the same day as a minor surgical procedure, says Anderanin. Claims are denied when practices use modifier 25 to bill for the decision-making portion of the visit, which is supposed to be included in Medicare's payment for the procedure.

Consider the following example offered in the January 2013 update to the National Correct Coding Initiative (NCCI) Policy Manual for Medicare Services:

"If a physician determines that a new patient with head trauma requires sutures, confirms the allergy and immunization status, obtains informed consent, and performs the repair, an E&M service is not separately reportable. However, if the physician also performs a medically reasonable and necessary full neurological examination, an E&M service may be separately reportable."

 Most minor procedures also have a global surgical period of 10 days, meaning that any follow-up services related to the procedure within that timeframe do not qualify as separate services.

In the case of major surgeries, similar rules apply for a 90-day global period, but the decision to perform the procedure can be billed separately using modifier 57. Mistakes often occur in the post-operative period, says Anderanin, often due to miscommunication between the clinical and billing staff.

"What happens is the physician marks a visit for an encounter but the staff is unaware that a surgery has been performed," says Anderanin. "So they bill for that visit and the claim gets denied. The denial is appropriate but it wastes staff time figuring out what happened."

Other common mistakes include mixing up modifier 51 (used for multiple procedures) with modifier 59 (used for distinct procedures), says Enos. Modifier 59 would be used if the same procedure were performed on multiple sites, such as removing lesions on different parts of the body requiring separate incisions, or to indicate that two distinct procedures were performed on the same day.

Modifier 51 is for reporting multiple procedures that are commonly performed together, such as colonoscopy and upper endoscopy, and do not quality for any NCCI edit exceptions as described by modifier 59.

Using modifier 51 when the situation warrants using modifier 59 could result in lost revenue. In the first case, the insurer pays the full amount for the first procedure (the major procedure with the highest relative value unit) and half of the full amount for lesser procedures performed during the same session after the patient has already been prepped for surgery. However, two distinct procedures (indicated by modifier 59) would result in both reimbursed at the full amount.

"Mixing up the two modifiers stems from poor documentation or lack of coding training for the billing team," says Enos, "and it happens in a lot of small offices."

Lack of denials follow-up

Many offices miss out on potential revenue by failing to follow up on denied claims and fixing the related coding mistakes, says Jimenez.

"The way you find out about major problems is by looking at your denials," she says. "Many practices don't have anyone doing it because no one ever has time. But without someone dedicated to looking at denials, it will be a large source of loss for the practice."

Trends, such as a lot of denials at the same time, can reveal specific problems, such as a new employee that needs more training about procedures, she says. If you discover mistakes in a timely manner you may be able to resubmit a denied claim and have it approved.

"You should have a conversation about what's causing the denials and the different things that affect reimbursement," says Jimenez. Practice managers should make a list of the most common reasons for denials and meet with clinical staff to let them know what they could be doing to help ensure that claims get submitted correctly, she says.

In addition to looking at denied claims, practices should perform periodic audits of their files, says Debra Seyfried, coding and compliance specialist for the American Academy of Family Physicians.

"Very few offices perform audits to look at documentation and use it as a training tool for physicians," she says. "You should have at least two scheduled meetings a year to go over the audited results and discuss what the coders need to make an appeal. It will help you see where the gaps are and how can you can close them."

Incomplete documentation

Poor or incomplete documentation by the clinical staff can cause offices to miss out on potential payments for services or goods provided. It can also result in undercoding for visits that might qualify for a higher level of reimbursement.

"Physicians often lack understanding of what is important to a coder," says Anderanin, who works primarily with orthopedic practices. For example, orthopedists often do not note that they examined the patient's skin because it's second nature to them but whether or not the skin is normal affects how a visit is coded.

Similarly, orthopedists often do not distinguish in their notes whether they looked at a paper report of a radiological exam, such as an X-ray, or the actual film, she says. However, looking at the actual film is coded differently because it is considered a higher level of medical decision making.

Primary-care physicians often fail to note that they ordered additional services performed by a nurse, such as pneumonia vaccinations or stitches, says Cynthia Stewart, coding education coordinator with Stormont-Vail Healthcare in Topeka, Kan., and current president of AAPC's National Advisory Board. "If the physician doesn't place that order in the medical record, the coder can't link that request to her. The doctor has to document it herself."

Similarly, a physician might ask an assistant to give a patient a wrist splint but fail to record the request in the record, says Seyfried. "So you've given away a product and made no profit. Make sure you mark everything that you dispense and get appropriate signatures that the patient has received it."

Problems arise for coders when physicians fail to document the steps they went through to arrive at a diagnosis, says Stewart. "The coder needs to understand the depth or extent of medical decision making. That's important if they have to explain to an auditor why a certain code was used."

Coders rely on complete documentation to make a "medical necessity linkage" between the procedure performed and the diagnosis code, says Enos. For example, a claim for a chest X-ray might be denied if the only diagnosis listed is diabetes, because that diagnosis does not indicate a reason for the X-ray.

Another kind of documentation problem has surfaced recently with the increasing use of EHRs that allow physicians to use computer-assisted coding, says Enos. She's noted a rash of overcoding because physicians are filling out a standard template and allowing the system to autofill the data fields.

"It looks like they are doing the identical exam on every patient regardless of the reason for the visit," she says. "It's become an epidemic and is triggering audits."

Ignoring coding changes

Practices often forego potential revenue simply because the physician does not have access to a complete list of codes, says Stewart. That's often because no one in the office is keeping up to date with new code choices relevant to the practice.

For example, a physician performing an arthrocentesis can choose among three codes pertaining to small, intermediate, or major joints, she says. Often, they select the intermediate code even though they are injecting a major joint, such as the knee or hip, because they don't have all three choices readily available.

"That's revenue lost," says Stewart. "You have to make sure you review your charge tickets and charge capture mechanism every year for what may be missing based on what services the providers are performing, and check for possible new code choices."

Over the past year, CMS has introduced several new code choices, such as transitional care codes under E&M services, Stewart says. "If you don't check for those, it may be six months of lost revenue before you realize what you've done. Review all the new and deleted codes and update your system before the first of the year so you don't lose one day of revenue."

Keeping current on coding is becoming increasingly important as offices prepare for CMS' transition to ICD-10 code sets. The new system not only has a completely different structure than ICD-9 but also will require significantly more detailed documentation, experts say.

"The ICD-10 transition will be especially hard in orthopedics because 60 percent of the new codes are musculoskeletal," says Anderanin. For example, unlike the current code set, the new codes will be specific to the left or right side of the body, something that physicians often fail to document, she says.

"Documentation will be a major issue with ICD-10," she says. "And it's the small practices that will have problems because they often won't spend the money to keep their coders up to date."

In Summary

Our experts say the following tips can boost correct coding, and in turn, medical practice revenue lost to denials:

• Stay on top of coding changes;

• Invest in education for coders;

• Encourage communication between coders and physicians;

• Follow up on denied claims; and

• Verify patients' insurance.

Janet Colwell is a Miami-based freelance writer specializing in healthcare. With more than 20 years experience as a journalist, she writes frequently about clinical and practice management issues for several national health industry publications. She can be reached via editor@physicianspractice.com.

This article originally appeared in the April 2013 issue of Physicians Practice.