CMS: E/M Codes Linked to Over $1 Billion in Improper Payments

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CMS: E/M Codes Linked to Over $1 Billion in Improper Payments

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E/M codes

Every coder knows that although most providers perform evaluation and management (E/M) services nearly every day, coding these visits aren’t necessarily straightforward. That fact is backed up by data in the latest CMS report, which notes that E/M codes 99202-99215 were responsible for more than $1 billion in improper payments during the most recent 12-month evaluation period.

The facts: CMS published its 2022 Medicare Fee-for-Service Supplemental Improper Payment Data report on December 8, 2022, which shared the agency’s insights after reviewing 52,701 claims that had dates of service between July 1, 2020 and June 30, 2021. The overall Medicare error rate of 7.5 percent was more than a full percentage point higher than last year’s rate of 6.3 percent, demonstrating the need for practices to pay closer attention to claims accuracy.

To ensure that your claims don’t fall into the coding traps that these E/M services did, check out the common errors that CMS identified.

E/M Codes Responsible for Over $1B in Errors

When it came to Part B claims, CMS ranked the services in order of which categories were responsible for the highest dollar amount in improper payments. Coming in first were lab tests, logging a startling $1.1 billion in errors, followed by established patient E/M visits (99211-99215), which represented $755.7 million in improper payments. Office visits for new patients (99202-99205) weren’t far behind, as they were responsible for $269.4 million in improper payments. When combined, the new and established patient E/M codes accounted for more than $1 billion in errors.

Typically, when CMS uncovers improper payments in high dollar amounts like these, Medicare contractors will start taking a closer look at the coding patterns of individual practices. If reviewers see claims that fall outside of the averages, they could ask for documentation to back up the services billed and scrutinize that office’s coding to find line-item errors. Once found, these types of errors can cause a chain reaction, sparking requests for reimbursement back, accusations of fraud, and even serious fines.

CMS classified each incorrectly coded E/M service based on the types of error observed, with the most common drivers below.

Incorrect Coding

This category made up most of the errors for both established patient visits (59%) and new patient office visits (63.1%), the CMS report indicated. This means the provider submitted the wrong code for the E/M visit, either because they upcoded, downcoded or reported a code from the wrong category.

For instance, suppose the physician saw an established patient for a level-three visit and reported 99203. This code represents a level-three visit for a new patient. This would be an instance of incorrect coding.

Avoid this error: To ensure you don’t make coding mistakes on your claims, always review the descriptors, local coverage determinations and CPT guidelines to understand exactly which services are described by each code. If you’re ever confused about which code applies to the service your provider performed, consult the provider rather than trying to pick a code that appears to be “close enough.”

Insufficient Documentation

Coming in second on the list of most common E/M errors was insufficient documentation, which accounted for 27.3% of established patient office visit errors and 19% of the errors for new patients. This error category means the medical records did not support the medical necessity of the service billed.

For example, suppose the documentation states, “Saw this established patient for follow-up to Jan. 3 visit,” with no further information. This note fails to address the patient’s chief complaint, an explanation of what was performed, or how long the doctor met with the patient. That means the payer will ask for the reimbursement back for what they paid the practice for this service.

Avoid this error: Never submit a claim if the documentation doesn’t support the codes that the doctor selected in the electronic health record or on the superbill. Instead, query the provider and ask them to create an addendum to the documentation if possible, so it’s thorough enough to stand up to an audit.

No Documentation

Ranking third in terms of reasons for E/M errors, claims with no documentation made up 10% of established patient E/M errors and 2.8% of new patient office visits. This means the provider either didn’t submit any documentation when reviewers requested it, they couldn’t find it, or they never had documentation supporting the service in the first place.

Avoid this error: Don’t forget the fact that if you don’t have documentation, insurers can’t pay you a penny. To avoid these types of errors, you must maintain documentation, keep electronic backups or paper files in an easily accessible location, and make sure they are secure and well protected.

Unsure of the basics surrounding correct coding? Get the facts from expert Kim Huey, MJ, CHC, CPC, CCS-P, PCS, CPCO, during her 90-minute online training event, “Master New 2023 E/M Coding Changes.” Sign up today!

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