November 3, 2010

Docs Doing Work of RACs, Study Seems to Indicate Featured

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pspencer100In anticipation of the RACs' inevitable investigational expansion of complex reviews into physician services, experts in the industry, as well as CMS itself, have turned our attention to the Comprehensive Error Rate Testing (CERT) reports.

These reports are a good indicator of what services require additional scrutiny, but there are a few items that fall between a CERT and a RAC that further narrow the focus of eventual investigations. In my eternal quest for additional information, I came across one such type of study recently, the results of which illuminate the world of physician RAC audits like an H-bomb test on Bikini Atoll.

WPS, the current MAC for Jurisdiction 5 (covering Iowa, Kansas, Missouri and Nebraska) and the legacy MAC for Illinois, Michigan, Minnesota and Wisconsin, jointly released the results of a Service Specific Probe of CPT code 99214 for the specialty of family practice.

Overall, 100 such services randomly were selected for prepayment review. Of these, 52 were allowed as billed following documentation review. Based on the utilization rate of this code for family practices nationwide being somewhere between 37 and 38 percent of all established patient E/M services, that number appears off. Keeping in mind the internalized belief that we learn from our mistakes, I now present the results of the remaining 48 claims.

The Basics

Eleven claims were down-coded based on the documentation provided. To briefly review, a level-4 established patient visit requires that two of the following three elements be present in the documentation:

  • Detailed history
  • Detailed examination
  • Moderate medical decision-making

While not specifically stated in the CMS E/M guidelines, with established visits it is always a good idea to have medical decision-making be one of the two elements selected. I recommend this based on medical necessity most often being defined by treatment options selected for the condition being treated. Even for a patient with a list of co-morbidities written on a three-foot scroll, if he or she has a bit of a rash, the greatest history ever taken and an examination and auscultation of every square inch of the body, the patient still is receiving treatment for a bit of a rash, and the E/M code selection needs to reflect this.

Two of the claims in the study were determined not to support the billing of an E/M service based on the documentation forwarded by the providers for review. If I had to venture a guess, I would say that these were related to encounters in which a minor procedure was planned via scheduling, the patient presented for the procedure and the physicians in question billed both a procedure and an E/M service.

Poor Physician Response

The remaining 35 claims represent a different kind of hurdle for physician practices. These claims were denied outright because the providers did not submit requested documentation of services within the allotted 45-day period. This study included only 100 claims. If we expand that number out by a few zeroes and then extrapolate that 35 percent of physician complex review requests either will be mishandled or ignored, the obvious conclusion is that by virtue of their faulty internal practices, physicians are doing the RACs' work for them. Who knew doctors had this level of time and altruism on their hands?

Previous Studies

It is important to note that this news comes on the heels of two other service-specific WPS probes of CPT code 99233 (level 3 subsequent hospital visit) for the specialties of cardiology and internal medicine. In the cardiology probe, a stunning 97.24 percent of services were billed incorrectly based on the documentation for the service. Of the incorrect claims, 25.5 percent were denied for insufficient or incomplete information in received documentation, 16.3 percent were re-coded to a lower level of service and a whopping 54.6 percent were denied for lack of response to the documentation request. The remaining 3.6 percent of claim errors in the cardiology study were deemed not to be subsequent hospital visits but a completely different category of E/M service.

The internal medicine probe revealed 75.7 percent of services reviewed being billed in error. Of the incorrect claims, 29.3 percent were denied for insufficient or incomplete information in received documentation and 5.5 percent were re-coded to a lower level of service. The percentage of services denied for lack of response to the documentation request topped out at 65.2 percent.

Part A providers knew the RACs were coming, and any facility worth its salt set up processes long ago to respond to requests. It is my personal belief that a connection can be made between provider readiness for RAC audit requests and the as-yet high success rate of appeals of RAC decisions by Part A providers. A physician practice, in most cases, lacks the organizational infrastructure to prepare to respond in the same way, however. A solution to response readiness is not - and in many ways, cannot - be a one-size-fits-all proposition. A good start would be educating administrative staff to be able to recognize a RAC request upon receipt.


With a 48 percent error rate in this limited probe, it is safe to say that high-level established patient visits now officially are warming up in the RAC bullpen. A surprise occurs when you never see it coming. Like the relief pitcher who replaces the obviously tired starter, we saw them warming up.

The RACs, in the same manner as the next pitcher jogging in from the outfield, are easy to see.

About the Author

Paul Spencer is the Compliance Officer for Fi-Med Management, Inc., a national physician practice financial management company based in Wauwatosa, WI. Paul has over 20 years of experience across all facets of healthcare billing, including 6 years spent with insurance carriers. In his current role with Fi-Med, he acts as a physician educator on issues related to E/M level of service and documentation audits by CMS and other outside entities. Paul has carried the CPC and CPC-H credentials from the American Academy of Professional Coders since 1998.

Contact the Author

pspencer@fimed.com

Read 48 times Last modified on January 29, 2013
J. Paul Spencer, CPC, COC

J. Paul Spencer is a senior healthcare consultant for DoctorsManagement. Is the national correspondent for Monitor Mondays, the live Internet radio broadcast produced by RACmonitor.