Improper medical billing practices, especially those involving improper selection of evaluation and management (E/M) services, presents costly problems for healthcare providers, says Practice Management Institute. New Certified Medical Chart Auditor-E/M training helps provider offices follow correct evaluation and management guidelines.

It is standard practice for Medicare to track physician claims to monitor for both over- and under-coding.  In 2014, the agency reported over $45 billion in improper payments to physician practices around the country. Since the agency began monitoring these issues, insurance companies have followed suit, often auditing claims after submission. 

When improperly submitted medical claims are paid, it can be very costly if problems discovered later in a government or private carrier audit require repayments with fines and penalties, and possibly exclusion from Medicare.

 “A good faith effort to follow coding and billing rules is not enough to protect provider’s livelihood,” says David T. Womack, President and CEO of Practice Management Institute.  “Many practices don’t realize that if you are billing Medicare, you are required to have a working compliance plan that includes regular auditing and monitoring of claims.”

Regardless of the type, all medical claims must account for certain factors. These include documentation of each patient encounter with relevant, accurate information, identification of health risk factors, and the patient’s response to treatment, among other general principles. However, many healthcare organizations rely on electronic health record (EHR) systems, which make it easy for providers to use features like auto-fill and copy/paste. If these types of features aren’t monitored carefully, incorrect payment is possible as a result of inaccurate charting.

“Auditors will take a group of what they deem to be random claims, usually 15-30 patients. They will analyze the percentage of those claims which they believe were overpaid and the amount of overpayment,” says Hinshaw and Culbertson Attorney Thomas L. O’Carroll. “The percentage or error rate of the sample is used to extrapolate to the total claims over a given period that may last usually several years.”

O’Carroll advises providers to be diligent in proper documentation, particularly documenting the essential elements support for a given E/M code because extrapolation can get very expensive.

 “If the auditors believe that in 12 of the 15 cases were overpaid, they will assume that 80 percent of all similar claims were likewise overpaid. The auditor will then calculate the total amount of overpayment based on that assumption.”

He says that CMS will usually seek to recoup payments for several years based on that assumed error rate and private providers are dependent on state law in terms of how far they can go back, adding that providers served with an audit letter should call an attorney immediately.

“When you calculate the total amount of billing for those years, it is not uncommon to see a demand for reimbursement as much as $500,000 to $1 million for single provider.”

Laying the groundwork means provider and reimbursement staff training from organizations like PMI to reduce the risk of improper payments and audits.

“A clean claim should be paid in about 15 days,” says Libby Purser, a health information management supervisor for a north Texas multi-specialty provider network. “If a claim is denied, it could take anywhere from 30 to 120 days to get paid. That in itself is incentive to have proper training for staff.”

Purser says it takes a team to code properly and routine audits are an essential part of a healthy revenue cycle.

He says that employing certified professionals helps protect healthcare organizations and avoid potential problems. PMI’s new Certified Medical Chart Audit–E/M will be taught in select markets and online beginning this spring. PMI also offers coding and auditing classes and certifications that address E/M coding and auditing.                

“Our training and certification programs help medical offices improve claim accuracy and stay current on coding and compliance guidelines.”

 For online coding and compliance training at affordable rates, visit www.pmimd.com/onlinetraining.