Prepare for Increased Audit Scrutiny

Part 2: Know where auditors are focusing and build a solid defense.

By Elin Baklid-Kunz, MBA, CHC, CPC, CCS
Evaluation and management (E/M) services are a continuous target for the Office of Inspector General (OIG), private payers, and Centers for Medicare & Medicaid Services (CMS) auditors. To keep your E/M services compliant and under the radar of auditors, correct potential errors in your practice using 16 stepped-out tips.
In February, we discussed the first eight steps to help you review your E/M utilization and documentation. This month, we conclude with eight more tips you can use to prepare for greater audit scrutiny, including how to develop a practice-specific audit plan, how to compare your utilization to national averages, and other ways to ensure compliance with government and payer standards.
1. Develop a Practice Audit Plan Using Specific Targets
If you’ve read and followed steps one through eight in Part 1, you already know the areas of weakness that payers and investigators are likely to target. Your next step is to customize this information to identify your practice’s high-risk areas.
For example, a surgical practice that sees patients both in the office and hospital should include hospital E/M services (e.g., 99231-99233, subsequent hospital services and 99221-99223, initial hospital services) in its audit plan, in addition to office E/M services and surgical services. Be mindful that hospital E/M services are especially error-prone.
Office managers usually have a better handle on their office visits than they do the hospital documentation because the progress notes are often hard to access. Special considerations should be given if:

  • The hospital implemented a new electronic health record (EHR) system with a team of information technology staff or nurses who may not have knowledge of E/M documentation guidelines.
  • Audit templates are used. Templates can be helpful if used carefully. They can be risky, however, when a physician documents all the necessary items to support the level of service billed, but does not indicate that services rendered for the presenting problem during the visit were medically necessary.

Other potential problems include:

  • Evidence of cloning. For example, the documentation for a beneficiary is worded exactly like, or similar to, the previous entries (i.e., the whole history of present illness (HPI) is pasted into the note from a previous visit).
  • Documentation shows conflicts between the review of systems (ROS) and patient history and/or presenting problem.
  • Patients with the same presenting problems have identical documentation.
  • HPI documented by nurses or auxiliary staff. Only HPI documented by the physician may be counted when determining the E/M service.
  • Physician involvement is inadequate. Shared/split visits depend on the combined documentation of a physician and a non-physician practitioner (NPP) to determine the level of service. Often, however, the complete documentation is done by the NPP and the physician only signs the medical record. This is not enough for the visit to be billed under the physician’s provider number.
  • You are unable to determine the documentation’s author. Sometimes a progress note will state, “dictated by NPP,” but the signature is the physician’s. This makes it difficult to determine if the physician or NPP performed the service.

Additional, common documentation problems for hospital visits include:

  • Chief complaint is not clearly stated, or is missing, which makes it hard to establish medical necessity.
  • Time is not documented for critical care, prolonged care, and extended discharged visits.
  • Time is not documented appropriately for “long discussions with patient” (counseling visits).
  • Progress notes and test reports are not signed and/or dated.

2. Run Utilization Reports for All Providers
The following data should be gathered for all providers in practice, and should be available from practice software in daily, monthly, and annual format:

  • Utilization (frequency) per CPT® code
  • Utilization (frequency) for modifiers
  • Total work relative value units (wRVUs)
  • Total patients seen, per day (new, established, and post operative)
  • Top 10 surgeries (or procedures)

Produce these reports for the specialty or practice as a whole, as well. Consider making a dashboard or scorecard for a snapshot that can easily be compared.
3. Compare Modifier Utilization Patterns
For instance, to identify outliers, you might compare use of modifier 25 Significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service for all the physicians in the practice, Having this data available provides an opportunity for the practice to discuss the correct use of modifier 25 and to ensure all physicians understand when the modifier is appropriate.
4. Compare Your Results Against National Benchmarks
Compare the CMS national E/M data, by physician specialty, to yours. For example, what if an  internal medicine physician uses CPT® 99233 Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: A detailed interval history; A detailed examination; Medical decision making of high complexity (the highest level of subsequent hospital visits) 100 percent of the time? CMS average national data for internal medicine shows this code being used 30 percent of the time. At the very least, this physician would have to explain how and why his patient population differs so dramatically from other physicians’ in the same specialty.
Billing all of your E/M services using a single CPT® code in a category is referred to as “clustering.” Often, providers will use only the mid-level codes (such as 99232 Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: An expanded problem focused interval history; An expanded problem focused examination; Medical decision making of moderate complexity) with the justification that some services are “higher” and some are “lower,” but in the long run, they average out. This is not an acceptable practice. Codes should be assigned based on services performed and documented.
Comparisons might also reveal revenue opportunities. Under-coding often occurs because providers are uncomfortable billing higher-level services, for fear of becoming an outlier (although, consistently under-billing can also make you an outlier). E/M audits help to identify opportunities for increased revenue, as well as ways to reduce compliance risk.
Don’t jump to conclusions: Distribution variances may have a logical explanation, and should be investigated. Knowing where to focus is important, especially if the practice has limited audit and coding resources.
5. Select a Sample and Perform Chart Review
Chart review is required to determine if documentation supports coded and billed services. Reviews are part of a practice’s compliance program, and may be performed by outside consultants or internal staff. If the practice employs NPPs, the audit scope should include their services, as well (e.g., audit incident-to services, split/shared visits, and supervision requirements). Include also auditing for cloning in the EHR: The OIG and Medicare administrative contractors have identified an increase of cloned health records.
If the practice does not have a compliance plan, review the OIG Compliance Program for Individual and Small Group Physician Practices, available on the OIG website (
6. Provide Feedback and Education
Analyze audit findings and provide feedback and education to providers and coders. A group discussion on medical necessity may be helpful to ensure everyone is “on the same page” (especially regarding high-level E/M services). Also provide proactive, routine education to providers and coders. Document all training performed. If you discover any overpayments during your audit, return them.
7. Monitor and Follow Up
Identify opportunities for improvement and continue to monitor progress. This step is often overlooked: You should designate an individual to be responsible for follow up. Some providers may require a follow-up review in three months, while others may need to be on a prepayment review until the compliance rates are brought to appropriate levels.
8. Have a Plan to Deal with Outside Audits
Failure to respond to a documentation request will result in an automatic overpayment. Incomplete and inaccurate documentation can result in claims denials and revenue losses. Make sure your practice has a plan in place to manage audits, as well as appeals.

Elin Baklid-Kunz, MBA, CHC, CPC, CCS, is director of physician services for Halifax Health in Florida. Her 20 years of healthcare experience includes seven years in finance and four years in compliance. Baklid-Kunz is a national speaker and published author on topics related to medical practice compliance, coding and reimbursement, chart audits, and federal regulations. She presents at workshops for AAPC and delivers keynote presentations for Eli Research Coding Institute and Audio Educator. Baklid-Kunz is a member of the Daytona Beach, Fla., local chapter.
John Verhovshek
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John Verhovshek, MA, CPC, is a contributing editor at AAPC. He has been covering medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University.

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