Ophthalmology and Optometry Coding Alert

One recent case shows why utilization trends are important.

If you’ve heard that insurance auditors look at coding trends and bell curves to find “outliers,” you may be wondering how these trends might impact eye care practices. One recent situation shows just how important these coding trends might be.

On March 3, a New York-based ophthalmologist was sentenced to eight years in prison for his role in a healthcare fraud scheme that netted him at least $3.6 million in payments for services he didn’t perform. Over a period of seven years, the physician upcoded low-paying surgeries and exams and fraudulently billed Medicare, private payers, and patients directly.

The fraudulent claim submissions led the ophthalmologist to become the highest-billing physician in the entire tri-state area for multiple codes. In fact, the ophthalmologist reported one particular code seven times more often than all of the other physicians in the tri-state area combined, according to a report from the Department of Justice.

Understanding how such benchmarking statistics are used by auditors is important, but it’s also important to know how you can use benchmarking in your own practice.

Check out five tips that can help you institute a strategy that can allow you to discover trends.

1. Understand What Benchmarking Involves

Benchmarking creates a standard against which you can compare other data. When your ophthalmologists take blood pressure readings or look at patients’ blood levels, those readings are compared against benchmarks for clinical reasons. For instance, your eye care providers know that a pulse of 200 is probably not healthy, and a blood pressure of 190 over 120 is not healthy. The same goes for your practice’s own well-being — once you know whether or not your coding patterns are healthy, you can keep an eye on them to see whether they go up or down.

This means you should not only compare your coding trends against other ophthalmologists’ nationwide, but also that you benchmark against yourself. For instance, if you change your billing or coding processes, you have no way of knowing whether the new program is more efficient if you don’t benchmark your current information against your old data.

2. First, Compare Against Yourself

Although there are a lot of variables that you can use for comparison, if you’re just starting out with a benchmarking, you should use data that is easily accessible to you.

For instance, profit and loss statements can track a number of key metrics. One would be the operating expense ratio or overhead ratio, which are the total expenses before provider compensation divided by revenue. It’s a great indication of overall practice efficiency — the management of your expenses.

3. Determine Your E/M Distribution

Your evaluation and management (E/M) distribution is also important to calculate so you know exactly which codes you’re reporting the most frequently in each category. Of course, if you see that your E/M usage changes from one month to the next, don’t panic. Maybe you saw a lot of patients with retinopathy at a certain time of year and reported more high-level codes for their management, and then the next month you saw more patients for pinkeye rechecks, which were coded using a lower-level code. The key is to look for and identify trends over time (for instance, in three-month intervals) rather than taking a snapshot of one month and focusing on that.

Here’s why: “If using a shorter date range, the smallest things can have a big impact,” says Mary Pat Johnson, COMT, CPC, COE CPMA, senior consultant with Corcoran Consulting Group. “For example, a surgeon on vacation for a week or a visual field machine down for a week has a bigger impact if you are looking at claims data for one month than if you are looking at data for three or more months.”

If you know the coding trends for eye care practices nationally, you can compare your code usage to them (See “Check This Breakdown of Which Codes Ophthalmologists, Optometrists Are Reporting Nationwide” in this issue for information about national coding trends).

You should also not read too deeply into differences between your coding curves and other eye care physicians’. Many factors come in to play. A practice with an older, sicker population may bill more high-level E/M codes. Subspecialists who see patients primarily by referral may tend to see more patients with serious, uncontrolled conditions. The key is to ensure that you’re coding accurately at all times.

4. Look at Ratio of Each Code to All E/M Services

Besides comparing intra-category codes (like comparing the distribution of E/M levels for new patients), you should also look at other comparisons.

For instance, your practice should look at the ratio of a category code to all E/M services, such as evaluating the ratio of new patient visits to all E/M codes, established patient office visits to all E/M codes, initial hospital visits to all E/M codes, and so on.

Multiple reference points are helpful to have when analyzing E/M performance. Bell curves, inter-service, intra-service, and comparison to all E/M services gives the practice four points of reference to fully understand how the practice is doing with E/M coding.

5. Analyze and Educate

If you see trends that indicate that one doctor in your practice reports primarily high-level E/M codes, look for an explanation. It’s possible that one eye care physician specializes in a more complex subspecialty and those codes are justified. However, it’s also possible that multiple physicians are coding inaccurately, and it should be a springboard to examine both doctors’ records more accurately and launch a training session for them if warranted.