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Why Your Practice Should Care About E/M Outliers

Benchmarking provider services shows variations in practice patterns, and helps to define a practice as an outlier.

By Mary LeGrand, RN, MA, CPC, CCS-P
Imagine an auditor looking at the distribution of evaluation and management (E/M) services for your physicians and non-physician practitioners (NPPs). What would he or she find when comparing your office’s usage pattern to other practices of the same specialty in your state? If you don’t know, you need to read on.

Benchmarking Shows How Your Practice Stacks Up

To paraphrase Wikipedia, “benchmarking is comparing one’s performance metrics to industry bests, and involves management comparing the results and processes in the targets to one’s own results.” Operating under the theory of “no surprises,” sharpening your benchmarking skills should be at the top of your priority list.
When benchmarking performance (whether it be for collection metrics or coding), you may discover that you are an “outlier” in some categories. Wikipedia defines an outlier as “an observation that is numerically distant from the rest of the data.”
If a physician is an outlier on an E/M benchmark comparison—for instance, because he or she uses more consultation codes or more upper level codes—it’s not necessarily a bad thing. In many cases, the variation can be explained because a specialist, such as a neuro-otologist, is compared to general ear, nose, and throat (ENT) specialists due to Medicare’s specialty classifications; or, a spine surgeon who only sees patients on referral is compared to general orthopaedic surgeons. Nevertheless, being an outlier will prompt inquiring minds to ask questions. Hopefully, you will have good answers to explain the deviation, supported by excellent documentation.

Keep an Eye on Your Curves

From any payer’s perspective, graphing code usage produces a distribution curve to use as a basis for comparison. This is especially true for Medicare, which paid $25 billion for E/M services (totaling 19 percent of all Medicare Part B payments) in 2009, according to the 2011 Office of Inspector General (OIG) Work Plan. Comprehensive Error Rate Testing (CERT) audits also revealed a national Medicare fee-for-service error rate for the November 2009 reporting period of 8 percent (up from 6 percent in 2008), which equates to $24.1 billion in erroneous payments. Medicare’s recovery audit contractors (RACs), CERT contractors, and zone program integrity contractors (ZPICs) are out to recoup money paid to those outliers, and they have been successful in collecting.


Knowing how you compare to other practices on a physician-to-physician basis is critical. Ignore those who tell you that your coding pattern should look like the proverbial “bell shaped curve.” Your coding should instead represent the level of care and documentation in your records. Your subspecialty or other unique aspects of your practice, your patient population, and your level of automation will influence your coding, E/M distribution, and variations from the “norm.”

Implement Benchmarking in Your Practice

You can use various tools to benchmark your code use. For example, Karen Zupko & Associates’ (KZA) E&M Profile Analyzer™ uses Medicare paid claims data to compare doctors in the same specialty and state with one another using a graphic format.
The chart on the preceding page is an example of a benchmarking graph (with specialty and state concealed). What you see here is a physician’s distribution pattern for new patient visits that is significantly different than other members of his group. His volume and intensity of services differs from his colleagues in the state and nationally, as well.
To find out why the physician’s distribution pattern deviates from others, you would:

  • Audit a sample of 99203 Office or other outpatient visit for the evaluation and management of a new patient, which requires these 3 key components: A detailed history; A detailed examination; medical decision making of low complexity. Verify that the medical necessity and documentation support the volume of level-III visits. If you identify any issues, address them through internal education.
  • Look at the other levels of service. Both the physician and practice are outliers in undercoding. Undercoding equals lost revenue to the practice, and might even raise concern that Medicare beneficiaries aren’t receiving appropriate care.

The next steps include:

  1. Running a frequency report for new, established, consultation, and inpatient codes by the physician.
  2. Reviewing reports from the E&M Profile Analyzer, or a comparable product. The E&M Profile Analyzer, for example, allows you to access monthly or quarterly reports.
  3. Using the above results to audit E/M records that represent outlier status (over- or under-utilization).
  4. Making sure someone with solid qualifications performs the audit, such as a certified coder with relevant experience in your specialty. The auditor must be able to command the physicians’ attention and respect.
  5. Developing an internal compliance plan (if you don’t have one), identifying both coding and billing process risks.

Tip: Use the E&M Profile Analyzer, or a similar tool, as part of your internal compliance plan to pinpoint documentation reviews. Rather than pulling random numbers or types of charts, you can focus on outliers who are likely to attract an auditor’s interest.

Evaluation and Management – CEMC

Double Check E/M in EHRs

Using an electronic health record (EHR) doesn’t mean that everything is OK with your E/M utilization. In fact, the OIG 2011 Work Plan has a special callout for EHR generated notes. Medicare contractors have noted an increased frequency of medical records with identical documentation across services. It’s advisable to review multiple E/M services for the same providers and beneficiaries to identify EHR documentation practices associated with potentially improper payments.
Never assume EHR logic is perfect—few, if any, systems can accurately calculate medical necessity; and cloning is often a significant problem. For instance, it’s a good idea to review all EHR generated 99214 Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: A detailed history; A detailed examination; Medical decision making of moderate complexity visits after about six weeks of use.
Mary LeGrand, RN, MA, CPC, CCS-P, is a senior practice management consultant with Chicago-based KarenZupko & Associates. Ms. LeGrand specializes in E/M and surgical coding education, reimbursement analysis, and compliance/auditing. She is a coding and reimbursement expert in specialties such as orthopaedics, spine surgery, otolaryngology, and general surgery.

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