CMS Identifies E/M Codes With High Error Rates

CMS Identifies E/M Codes With High Error Rates

Coding initial hospital care became more challenging after Medicare stopped paying for inpatient consult codes several years ago — but that can’t be the only factor driving the startling error rates for evaluation and management (E/M) codes 99223 and 99214.
In the report “2019 Medicare Fee-for-Service Supplemental Improper Payment Data,” the Centers for Medicare & Medicaid Services (CMS) outlines the most significant errors among Medicare claims, and covers the causes of the improperly paid charges. Overall, the government found an 8.6 percent improper payment rate among Part B claims submitted from July 1, 2017, through June 30, 2018.

Initial Hospital Care Code 99223 Tops the Charts

Topping the list of improperly paid E/M claims was CPT® 99223 Initial hospital care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of high complexity. This code reports the highest level of initial hospital care. Far exceeding the national average for improperly paid claims, 99223 saw an error rate of 24.1 percent, amounting to about $433 million in improper payments in just one year.
According to the report:

  • 80 percent of the improper payments were due to incorrect coding, and
  • 5 percent of the improper payments were due to insufficient documentation.

Tips for Coding 99223

Based on these high improper payment rates, now is a good time to refresh your knowledge of the 99223. Here are some best practices to ensure your claims don’t add to the statistical error rate next year:

  • One physician should bill for inpatient encounter: Do not assume you can bill for initial inpatient care (99221-99223) just because the doctor performed a face-to-face visit with the patient in the hospital on the day of admission. If an inpatient claim has already been submitted by another provider, select a subsequent hospital care code (99231-99233).
  • Admitting/attending physician should append modifier AI: Only the admitting/attending physician can bill an initial inpatient hospital care E/M code. That healthcare professional should append modifier AI Physician of record to the initial inpatient code when billing Medicare. Other payers have adopted this rule as well.
  • Know the status: Make sure the patient your physician visits in the hospital has been admitted as an inpatient. Not all facility settings qualify as “inpatient” status. The emergency department, for instance, is an outpatient setting, and the inpatient codes don’t apply there.
  • Meet three of three: Initial hospital care visits must meet all three code requirements (history, exam, and medical decision making). Subsequent hospital visit codes (99231-99233) only require two of the three elements.

Outpatient E/M Code 99214 also at Risk

CPT® 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 hit the top of the error list for outpatient E/M codes. This code amounted to about $423 million in improper charges.
According to the report:

  • 67 percent of the improper payments were due to incorrect coding, and
  • 28 percent of the improper payments were due to insufficient documentation.

CMS also examined which specialties generated the most Part B errors. Internal medicine ranked the highest, racking up over $1 billion in projected improper payments. Not far behind were clinical laboratories and family practices.

More on Claims Payment Errors and Causes

As part of its Comprehensive Error Rate Testing (CERT) program, CMS reports the most significant errors among Medicare claims annually. To review the rest of the errors CMS found among 2019 Medicare claims, visit the CERT website and download the 2019 report.

Evaluation and Management – CEMC

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Torrey Kim has been writing about medical coding, billing and compliance for over 15 years. She has covered in-depth topics for such publications as Emergency Department Coding Alert, AAPC's Coding Edge, and Advance.

9 Responses to “CMS Identifies E/M Codes With High Error Rates”

  1. Teresa Kelley says:

    Incorrect guidance in the article: more than one provider may bill initial IP Codes: per CMS Chptr 12:
    G. Initial Hospital Care Visits by Two Different M.D.s or D.O.s When They Are
    Involved in Same Admission
    In the inpatient hospital setting all physicians (and qualified nonphysician practitioners
    where permitted) who perform an initial evaluation may bill the initial hospital care codes
    (99221 – 99223) or nursing facility care codes (99304 – 99306). A/B MACs (B) consider
    only one M.D. or D.O. to be the principal physician of record (sometimes referred to as
    the admitting physician.) The principal physician of record is identified in Medicare as
    the physician who oversees the patient’s care from other physicians who may be
    furnishing specialty care. Only the principal physician of record shall append modifier “-
    AI” (Principal Physician of Record) in addition to the E/M code. Follow-up visits in the
    facility setting shall be billed as subsequent hospital care visits and subsequent nursing
    facility care visits.

  2. Teresa says:

    G. Initial Hospital Care Visits by Two Different M.D.s or D.O.s When They Are
    Involved in Same Admission
    In the inpatient hospital setting all physicians (and qualified nonphysician practitioners
    where permitted) who perform an initial evaluation may bill the initial hospital care codes
    (99221 – 99223) or nursing facility care codes (99304 – 99306). A/B MACs (B) consider
    only one M.D. or D.O. to be the principal physician of record (sometimes referred to as
    the admitting physician.) The principal physician of record is identified in Medicare as
    the physician who oversees the patient’s care from other physicians who may be
    furnishing specialty care. Only the principal physician of record shall append modifier “-
    AI” (Principal Physician of Record) in addition to the E/M code. Follow-up visits in the
    facility setting shall be billed as subsequent hospital care visits and subsequent nursing
    facility care visits.

  3. Delaine says:

    Great to reconfirm what you know already. Never hurts one bit. Thank you.

  4. Rosezella says:

    Please verify that according to CMS only one provider can report the initial inpatient E/M. From my understanding, the reason why the AI modifier is to be assigned for the admitting physician is due to other physicians are able to report the initial IP E/M due to the discontinue acceptance of the consult codes.

  5. Kristine Roloson says:

    This article seems inaccurate. The Initial hospital visits paragraph is not accurate or not clearly stated. It has always been my understanding that the Initial hospital visits can be billed by more than one provider of different specialties. The admitting provider is required to add the AI modifier but if another provider of another specialty is called in to see the patient and its their initial visit, they can certainly bill a 99221-99223 unless a consult code is warranted.

  6. Renee Dustman says:

    Thanks so much for your comments! You are correct — the admitting/attending physician should report initial hospital care with modifier AI appended to note that they are the principal physician of record. Additional specialists who see the patient during the hospital stay can report initial hospital care but should NOT use modifier AI. Modifier AI will tell the insurer who the principal physician of record is. — Torrey Kim

  7. Linda Duckworth says:

    Corrections to this article are needed, as discussed by people above. The guidance in this article suggests coding in a manner that is opposite of CMS’ direction, other than the use of modifier AI.

  8. Shari Shafer RN, CHA, CCS says:

    Hello, I am trying to find a written E/M error rate that is acceptable by Medicare/Medicaid. I read somewhere it is 95% but I can’t find anything. If someone has that citation I would greatly appreciate it if you could share it. Thank you.

  9. Charlene Keitt says:

    I needed a routine pre employment chest X-Ray and visited a family practice clinic to obtain same. I received a bill with charges in excess of $300.00 and although Medicare paid a portion of the charges I owe $170.00. I feel the charges are excessive for an encounter that did not require medical attention or decision making. Please assist me in finding an agency that can
    help me understand the codes and charges on my
    bill. Thank you

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