Although Recovery Audit Contractors (RACs) are not currently evaluating facility evaluation and management (E&M) services, it may not be long before they do.

In the 2010 final rule for the hospital outpatient prospective payment system (OPPS), CMS stated, "While we also would encourage RACs to review a hospital's internal guidelines when an audit occurs, we note that currently there are no RAC activities involving visit services."

This message to RACs also provides hospitals with a heads-up about their obligations in regard to "internal guidelines." Hospitals should, if they haven't already, establish internal guidelines for definitions related to facility E&M visit codes. As a proactive measure, now-while RACs aren't focused on the topic-is a good time to review Medicare's guidelines on the topic.

Medicare Guidelines

According to CMS, facilities should do the following:

• Follow the intent of the CPT code descriptors, and design the guidelines so that they reasonably relate the intensity of hospital resources to the different levels of effort represented by the code.

• Base the coding guidelines on hospital facility resources and not on physician resources.

• Ensure that guidelines are clear enough to facilitate accurate payments and to ensure compliance with audits.

• Meet the requirements outlined in the Health Insurance Portability and Accountability Act (HIPAA).

• Provide the basis for selection of a specific code (written or recorded and well-documented).

• Require documentation that is clinically necessary for patient care.

• Apply consistently across patients in the clinic or emergency department.

• Make available for reviews by Medicare fiscal intermediaries or administrative contractors (MACs).

• Result in coding decisions that other hospital staff, as well as outside sources, could verify.

Focus on Upcoding

However, in spite of all of the above, there are two things that the coding guidelines should not do. They should not facilitate upcoding or gaming and they should not change with great frequency. During recent reviews, MedLearn's consultants have found significant issue with upcoding or gaming.

In the 2008 OPPS final rule, CMS stated that it was "concerned about counting separately paid services (for example, intravenous infusion, x-rays, electrocardiograms, and laboratory tests) as interventions, or including staff and their associated staff time in determining the level of service." CMS believes that "the level of service should be determined by resource consumption that is not otherwise captured in payments for other separately payable services."

In addition, review your E&M definitions to determine whether they are written or automatically generated via a computerized assisted coding (CAC) system.  If you have interventions, services, or items that are included in other separately coded, reported, and reimbursed services, you may need to revise your criteria and remove them.

Audit Insight

It is difficult to predict where the RACs will focus in the future, but I think we can all agree that any aspect of the coding and billing system that is left up to "self-interpretation" is fair game. Establishing your own definitions for E&M visit codes is one such animal, and it's likely they will come under the RAC microscope sometime in the future.

The bottom line: Be proactive and get your house in order now!

Barbara Vandergrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

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