November 21, 2013

Medicare Administrative Contractors Target New and Established Patient E/M Codes

By Cononiah M. McCarthy

On May 31, 2013 a change request (CR) was made by the Centers for Medicare & Medicaid Services (CMS) to address the issue of patients being billed as new patients when in fact they were established patients.

According to CMS, the effective date for Medicare contractors to begin identifying the aforementioned errors was Oct. 1, 2013, with the implementation date six days later.

The Medicare Administrative Contractor (MAC) for Region C, First Coast Service Options Inc., already has notified healthcare providers in its jurisdiction of the forthcoming recoupments. These providers were notified on Oct. 22, 2013 of the overpayment letters that could be expected. These letters will detail the errors and overpayment amounts.

Providers in Region C and across the nation should note that the system edits from the MACs are intended to identify two errors based on CR8165. CMS has mandated the MACs to identify the following errors:

  • More than one new patient visit being billed within a three-year time frame by the same physician (or different physicians in the same group with the same specialty).
  • An established patient visit being billed prior to an initial visit within a three-year time frame by the same rendering provider.

Once the MACs have identified that a provider’s claims feature the aforementioned errors, the MACs will initiate recoupment of the payments made on the claims. The next action by the MACs will be to reject the second claims once the error is identified prior to payment for them.

The edits are intended to verify that the new patient CPT codes are not applied after payment was made for a claim that contained an established patient CPT code. In case providers are unaware, MACs have listed the new and established patient evaluation and management services that will be checked.

The MACs will be checking for the following new and established patient evaluation and management codes:

New patient CPT codes:

  • 99201-99205, 99324-99328, 99341-99345, 99381-99387, 92002, 92004.

Established patient CPT codes:

  • 99211-99215, 99334-99337, 99347-99350, 99391-99397, 92012, 92014.

To reduce the risk of exposure to recoupment, providers have to be extremely vigilant and cognizant of the value and differences between new patients and established patients. New patients are defined as “one who has not received any professional services from the physician, or another physician of the same specialty who belongs to the same group practice, within the past three years,” per the relevant bylaws.

Conversely, an established patient “has received professional services from the physician or another physician in the same group and the same specialty within the prior three years.” In case these definitions seem incomprehensible, the following examples may help. If Patient A received an annual physical exam at the office of internist Physician A one year ago, then that patient subsequently visited the office of internist Physician A the next year, Patient A will be considered an established patient. However, if internist Physician A and cardiologist Physician B operate from the same facility and Patient A receives services from cardiologist Physician B the next year, Patient A will be categorized as a new patient.

The differences between new and established patients are important to understand in part because providers must comprehend why CMS is placing such great focus on the issue. The greatest difference between a new patient and an established patient, from a regulatory perspective, is the RVUs. The RVUs for new patient evaluation and management codes are higher than those for the established patient evaluation and management codes within the same evaluation level.

Table 1. Difference in RVUs for New and Established Patients

New Patient

 

Established Patient

 

 

E/M Codes

RVU ($)

 

E/M Codes

RVU ($)

 

RVU Difference ($)

99201

25.89

 

99211

8.85

 

17.04

99202

49.05

 

99212

24.52

 

24.53

99203

75.28

 

99213

49.73

 

25.55

99204

128.42

 

99214

76.63

 

51.79

99205

164.86

 

99215

107.96

 

56.9

92002

48.37

 

92012

53.14

 

-4.77

92004

100.14

 

92014

80.39

 

19.75

The RVU used  is based on an example of services rendered in Medicare Region C. 

By recognizing the different RVUs, providers will come to realize that when a new patient evaluation and management code service is billed when it should be an established patient evaluation and management code, that means CMS overpaid on the claim. To be compliant with the new and established patient guidelines set forth in 100-04 Chapter 12, Section 30.6.7A, it is important for providers to understand that they should utilize adequate evaluation tools. These various decision and education tools will assist healthcare providers in deciding how to select the appropriate patient evaluation and management category. Helpful tools may include flowcharts or decision trees.

More information about the new and established patient change request can be found in MLN Matters 81865. Additionally, providers should also take the action to contact their MAC about identifying billing errors connected to new and established patient evaluation and management codes.

About the Author

Cononiah M. McCarthy’s academic background entails immense training in finance and business management. However, he also has a great interest in public governance and the study of effectiveness and efficiency of public healthcare programs. McCarthy believes that a working healthcare system is a key part of the equation to economic sustainability for healthcare providers. McCarthy presently serves as the reimbursement/RAC analyst for the Schneider Regional Medical Center. His contributions to that facility range from chargemaster efficiency and flow to OIG audit management and resolutions.

Contact the Author

cmccarthy@srmedicalcenter.org

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