For modern medical practices, financial health is often challenged due to shrinking reimbursements and increased scrutiny over coding practices. Although medical billing and coding errors are usually from minor mistakes, these common errors can add up to a lot of lost revenue over the years and, for smaller practices, failing to address this trend could lead to financial ruin as regulations shine a brighter light over coding compliance.
However, figuring out if your practice is making common errors in billing and coding can serve as an excellent opportunity to increase practice revenue for services you are already providing. Practice owners who are proactive in assessing their claims process can identify and address fixable, recurrent errors before increasing denials under value-based care become too much to overcome.
Providers overwhelmed by confusing documentation guidelines and cumbersome EHR templates find selecting and documenting appropriate levels of E/M services to be challenging. Because of this, providers have an ever-looming fear of being audited or having their claims denied, so they frequently undercode. Often, middle of the road codes, such as a 99213, become the default as providers feel it is safe and that coding anything higher would require extensive documentation or put them at risk.
However, this trend of always billing a no-risk code such as a 99213 can cost the practice thousands in reimbursement it should have received. Practices should gather data from your billing system at regular intervals to determine your coding patterns. Organize the data by provider to determine the number of times each provider has billed a 99201 through a 99215, during the selected time period to determine whether you're losing revenue opportunities by undercoding. Once you have your data, you can compare it with national benchmarking standards in your specialty to calculate your potential for lost revenue. Practices should seek out coding education and regularly review coding guidelines to determine how to appropriately select a level of service.
Busy practices can easily miss capturing charges for many of the services they provide. Simple mistakes, such as not setting an EHR up correctly or failing to update old codes, can quickly lead to a spike in claims denials from payers and a loss of revenue. Coding educators and auditors often see minor procedures, injections, and in-office labs missed or coded incorrectly. Providers often say they couldn’t find the code, or they just used the template and they don’t know what happens after that. Work with your EHR vendor to make sure every possible service is set up as a billable code and that the providers and staff are able to find and use the codes. Templates that fire off codes automatically should be checked periodically to make sure the code is correct and billing as it should. For example, make sure the codes for injectable medications are set up with the correct number of units for the dose given. Typically, a common error is when the code description states one thing, but the code actually being billed is completely different. If you don’t bill an injection correctly or miss billing the administration fee, you are not only losing revenue, but you are essentially paying for the patient to have the injection.
Since medical procedures and services are often complex, additional information may be needed when coding to capture the patient visit accurately. Modifiers, found in the CPT and HCPCS code books, provide additional context and information about the procedure. Providers and staff report they rarely use modifiers or they simply do not know much about them or how to use them. Many modifiers have a direct impact on reimbursement, and if not used or not used correctly, can lead missed revenue opportunities. Also, payers have specific guidelines for reporting modifier and their use. It is very important to familiarize and understand payer specific guidelines to maximize reimbursement.
When a claim is submitted, the diagnosis code informs the payer of the reason for the service and also demonstrates the medical necessity of the visit. The change from ICD-9 to ICD-10 has drastically increased the level of detail that can be reported using a diagnosis code. It is more important than ever to be as clear and specific as possible in the documentation and when selecting the diagnosis code. Always defaulting to unspecified codes is a practice that will lead to an increase in denials. CMS provides many resources for coding, including reimbursement mappings to help providers find the right diagnosis codes.
The trend of supporting a provider’s medical decision making within the coding and billing process is expanding as payers become increasingly concerned with shrinking margins, shifting the burden of proving medical necessity from prior-authorization to documenting it within the claim. While substantiating medical necessity involves a practice’s coding and billing staff, the process must begin with the provider. The provider’s clinical documentation is critical in this area, as the provider’s complete notes prove the medical necessity of each service and the diagnosis code is the method of communicating the acuity to the payer.
Medically necessary services are broadly defined by Medicare as “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” Third-party and private payers have their own variations of the definition but, in short, it’s about providing the right service to the right patient at the right time in the right place. Claims without documented medical necessity are often denied outright, or if paid mistakenly your payer may reclaim that reimbursement down the road. Just because a service was paid, doesn’t mean it was paid correctly.
If your practice serves Medicare patients, then your providers should be well aware of the complex rules associated with Medicare both nationally and locally. Not being familiar with the latest coding nuances and rules specific to Medicare can cost your practice a great deal in lost reimbursement. Additionally, if your practice is participating in the Merit-Based Incentive Payment System (MIPS), coding errors can affect your provider score and lead to a reimbursement penalty as a low-value provider.
One major nuance or difference relates to preventative medicine services. Medicare doesn’t always reimburse in the same way that most commercial payers will. For example, Medicare will cover an Annual Wellness Visit; however the requirements and codes are unique to that particular service. Providers are still missing the mark, and performing the same traditional preventative exams on this patient population because they don’t understand the guidelines. Providers that do not understand the differences could end up providing services to patients, free of charge. Further, understand your patient populations, and be familiar with all of the services patients should receive and how you can code and bill for them.
Medical practices are understandably cautious about budgets, but failing to provide necessary education and resources to keep up to date on new coding and regulations is an expensive mistake that results in lost revenue and potential compliance risks for practices. Providers and their staff can reduce coding errors by educating themselves on proper coding, conducting an ongoing internal audit to identify common errors and reduce them, assessing coding procedures to ensure continued compliance and hiring a well-trained billing staff.
To make sure you're on the right track to ensure the independent and financial health of your practice, conduct an internal audit of your practice and hold a staff meeting to review the findings. You might be surprised how simple awareness can help focus your educational efforts and positively impact your practice's bottom line.
Jessica Short is a previous Coding and Education Manager at Intermedix.