Physiatry Practice Management Resources

Errors in coding can result in denied or delayed claims, costing your practice valuable time and money. Inappropriate coding or billing can also open your practice up to a regulatory review and possible civil or criminal penalties. Regular, well-documented audits are an important part of a billing compliance plan and will help demonstrate that your practice takes significant action to ensure that it's billing and coding is done properly.

Key Steps

Conducting an audit may sound like a daunting task, but need not be an overwhelming process. Use these simple steps as a road map to develop your own audit:

Define Audit Scope

An audit will be overwhelming if you try to look at too many charts, but will not be representative if you look at too few. Here are some tips for defining the type, frequency and size of your audit:

• Standard Audit. These audits should be conducted once a quarter and more frequently if you are having difficulty with your billing and coding processes. At a minimum, review 20 visits for each provider and try for five percent of visits for a given time period. The easiest way to get a random sample is to pick every fourth or fifth patient off your schedule.
• Targeted Audit. If you have a specific area of concern based on a general audit, denials received or updates from Medicare, try doing a targeted audit. For instance, you can concentrate on a certain CPT code, claims from a particular payor or a specific aspect of coding such as E&M. If there are enough claims in the area, try to review at least 20 visits for each provider.

• Compare the chart to the bill. Review the patient's chart for that encounter and check to see if the bill correctly reflects all services performed. If there are discrepancies between the chart and the bill, make a note of the dollar amount.
• Compare the bill to the chart. Check to make sure that all the items noted on the bill have substantiating documentation in the chart. If there are discrepancies between the chart and the bill, make a note of the dollar amount.
• Check ICD-9 and CPT coding. HCFA uses the following standards when auditing bills, so try looking at your own claims on this basis.
  • Correct CPT and ICD-9 codes.
  • Ask yourself if the CPT code correctly reflects the level of service provided.
  • Check to see if CPT and ICD-9 codes are related. For example, the ICD-9 Code should explain why the level of CPT was necessary.
  • Make sure the ICD-9 Code has been recorded to the highest level of specificity - five digits if possible.
  • Distribution of E&M Codes. HCFA and the OIG view both under and over-coding as fraud. You should expect to see a distribution of claims among the five E&M Coding levels. Refer to the attached tables for a sample of what a distribution of E&M Codes might look like. See related topics for more information on E&M coding.
  • Medical necessity. Find out if the service performed is related to the diagnosis. Also make sure that the type of care you are providing falls within your specialty standards. A payor may refuse to pay claims if the treatment falls outside your practice area.
  • Unbundling. If separately billed services can also be billed under a global fee, your practice may be at risk for fraud. Scrutinize your services and determine if they need to be billed under one CPT code.
• Confirm that the claim was submitted to the payor. Note the number of elapsed days between the appointment and the time the claim was submitted.
• Review the Explanation of Benefits (EOB). To ensure the MCO has considered all aspects of your claim, review the EOB to see how it matches up. Note any claims that were denied or returned for correction.
• Review payments received. Make sure copayments were collected for each visit and third party payments were received. If self-pay, make sure the appropriate billing cycle has been initiated.

• Add up dollar amount of discrepancies. This dollar figure may help both clinical and administrative staff understand the scope of the problem and the need to make changes. For example, if a random sample of 50 visits with a physician has $250 of lost charges, the total loss can be estimated at $2000 dollars a month (assuming the physician sees 400 patients a month).
• Look for systematic errors at each step and also by provider. There may be one stage in the process where the most errors occur, signaling an opportunity to use training or adjust the process to yield improvement. For example, if the wrong CPT code is being attached to a procedure, you may need to update the practice's CPT reference sheet. Or a physician may not be noting all the procedures performed because a procedure is not included on the superbill.
• Calculate the average number of days to submit a claim. Check to see if staff are meeting goals for the submission of claims. If not, look for the reason behind the time lag, for example, not enough staff, not enough information to complete the claim, etc.
• Track the number of claims denied or needing correction. Resubmitting claims is expensive - in many cases as much as $25 per claim. Look to see if your staff needs better training on how to complete claim forms. Also check to see if the appropriate pre-certifications are being obtained for each payor.

• Reporting. Report the audit findings to your compliance committee or Compliance Officer. Also let other physicians and the billing staff know about the outcome of the audit. Make sure to note positive outcomes and good performance as well as areas targeted for improvement.
• Correction. Work with your practice's Compliance Officer to address significant errors like overpayments or incorrect billing. You can use the following as a guideline to assess how well your practice is doing:
  
• If less than 10 percent of your claims have errors, your practice is in reasonably good shape. By addressing any of the specific issues noted above, your practice should be able to improve its process.
  If more than 10 percent of claims have errors, you should consider devoting significant time and resources to improving the billing process.
• Monitoring. After you've addressed any issues found in the audit, set up a process to monitor problem areas, as good solutions can quickly slip out of place.

• Check with your attorney before starting an audit. You may be able to conduct an audit using attorney client privilege, thereby protecting your practice from liability for errors found.
• Think about employing an outside coding reviewer if you notice a significant problem with code selection. An outside reviewer can help your practice increase compliance and reduce lost revenue.
• Make sure that your appointments and your charges match up at the end of each day. Using numbered charge tickets will make it easier to close out claims at end of day. Note walk-ins or no-shows on the schedule or in the practice management system.
• Consider purchasing a claims editing system that can catch both administrative and clinical errors. These systems can reduce denials by flagging incomplete or incorrect claims before they leave the office.
• Bulletins from Medicare, Medicare carrier manuals and Special Alerts from the OIG are good places to look for high-risk areas.
• There is some shareware on the HCFA Website called RAT-STATS that you can download to help select claims.

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