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Insightful Audit of Physician Billing Practices and The Mistakes Often Made in Billing

Updated on December 2, 2013

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A Common Audit and the Results!


EXAMPLE of Audit

Subject: Compliance Performance Review (CPR) Documentation Audit

In summary, the audit findings are as follows:

General Findings

· 258 services were evaluated as part of this audit

Under current guidelines

· 90 (35%) of the services reviewed were properly billed and documented.

· 18 (7%) of the services reviewed contained billing and/or documentation errors which

Resulted in potentialoverpayments(under documented).

· 150 (58%) of the services reviewed contained billing and/or documentation errors

Which resulted in actual underpayments (under billed).

Under new/proposed guidelines

· 109 (42%) of the services reviewed were properly billed and documented.

· 30 (12%) of the services reviewed contained billing and/or documentation errors

Which resulted in potentialoverpayments (under documented)?
·119 (46%) of the services reviewed contained billing and/or documentation errors
resulted in actual underpayments (under billed).

Evaluation and Management Services

117 Evaluation and Management (E&M) services were evaluated as part of this audit.

Under current guidelines

· 36 (31%) of the services reviewed were properly billed and documented.

· 14 (12%) of the services reviewed contained billing and/or documentation errors

Which resulted in potentialoverpayments (under documented)?

· 67 (57%) of the services reviewed contained billing and/or documentation errors

Which resulted in actual underpayments (under billed)?

Under new/proposed guidelines

· 55 (47%) of the services reviewed were properly billed and documented.

· 26 (22%) of the services reviewed contained billing and/or documentation errors

Which resulted in potentialoverpayments (under documented)?
· 36 (31%) of the services reviewed contained billing and/or documentation errors
which resulted in actual underpayments (under billed).

Specific Documentation/Billing Errors

·the chief complaint is not always clearly stated.

·Exams are a little to brief to support the codes appropriate for this practice. ·Billing of established patient visits is too conservative.

·Injections are not properly documented.

·Injections are not properly billed.

Documentation Problems Noted & Recommended Solutions

Problem: The chief complaint is not always shown. On several, it is just implied. For instance, on one visit dated 2/23/05, the note states “Female doing well. In for lab results.” This leaves the medical need for the visit in question. Since the chief complaint justifies the need for the visit and any testing that may be ordered, it should be clearly and specifically stated at the beginning of the note to avoid confusion.

Recommendation: Make it a habit to specifically state the medical problem or symptom to be addressed. While the problem may be a continuation of one addressed at the previous visit (as in this case), every note should be documented to stand alone on its own merit. Thus, should an audit occur, it is not necessary to provide notes other than the ones in question, minimizing an auditor’s access to other notes with potential errors. We also suggest that you make it a habit to include one fact about the chief complaint and a review of one system on every patient with an acute problem. This will help support the level of visit most appropriate to that situation. For instance, the history for a patient with a simple infection might read “Sore throat x 3 days. No fever.” This translates into an expanded history (99202 on new patients and 99213 on established).

Problem: Using the proposed guidelines, the exam is occasionally too brief to support the codes appropriate for your care. Judging from your notes, it is obvious that the care is provided. However, some of the details of that exam are missing. For example, one child was seen on 2/2/06 for pulling at her ears. She had an ear infection, which warrants a level III (99213). To properly document that code, you need 6 exam findings. You gave

4. “ENT: TMs red. Pharynx unable to visualize. Lungs CTA. Heart RRR.”

Recommendation: Be careful how you state your exam. Did you check the nasal mucosa? Did you check the lymph nodes in the neck? The addition of those two facts would have brought your documentation up to appropriate levels. Strive for 6 exam findings on all patients with simple, acute problems.

Note: Your medical assistant doesn’t always get three vital signs. Usually, just 2 were listed. If she were to make it a habit to get 3 vitals on every patient, rather than 2, that would count as one exam finding for you.

Problem: You are too conservative in your billing. The majority of services are billed as
level II follow-up visits (99212). However, the majority of these visits qualify for level
III (99213). This is a loss of approximately $10-$15 for each of these visits. In fact, there
were several visits documenting your involvement in the exam and decision-making that
were billed as level I follow-up visits (99211). This is the lowest level visit code and is
intended to be used when you provide a minimal service (without an exam or counseling)
or direct incidental services provided by a nurse or medical assistant. All of these visits
warranted a level II (99212) or level III (99213). The improper use of 99211could
amount to a considerable loss of revenue over a period - perhaps as much as $30-
$40,000 a year.

Recommendation: No follow-up visit should be billed lower than level II if you examine or counsel a patient. Bill level I only if you or your nurse or medical assistant provides a minimal service such as checking blood pressure, monitoring a patient’s weight, or changing a dressing. Level II should be used for those patients who present for minor problems (cold, insect bite, skin rash, etc.) that you treat with over-the-counter meds, ice packs, or bandages. It would also be appropriate for patients who are returning for rechecks after completing a
course of treatment. Such patients seldom require more than a focused exam of one

The majority of your acute-care follow-up visits should be coded as level III (99213).

This represents those patients seen for acute, uncomplicated problems or a stable chronic illness in which prescription drugs are ordered or changed. (Note: Medicare representatives have said that simply continuing current meds is not management.) Included in this level would be those patients with sprains, acute infections, stable diabetics, etc. These patients usually require an exam of 2 systems with 6 exam findings. Level IV (99214) should be used for those patients who have multiple medical problems to be considered, who have a chronic problem which is worsening or who have an acute problem with complications. Complicated injuries also fall into this category. Treatment may involve drug management or major surgery and may include extensive testing.

Such conditions usually require an in-depth evaluation of twelve elements from two systems. Level V (99215) should be used with great care for patients in crisis. This would include patients with multiple medical problems that are worsening or people in life-threatening circumstances. Usual treatment at this level includes drug management with monitoring or consideration of high-risk surgery. In these circumstances, a comprehensive exam must be included.

Problem: No entries were made about the amount of time spent in counseling. There
were several patients for whom no exam or history was noted but who obviously received a lot of counseling. Failure to record counseling could result in significant

Recommendation: Recognize situations in which counseling is likely to play a major role. This could be patients with Alzheimer’s or depression, patients in for test results, or those who are non-compliant with therapy. When more than 50% of the time you spend face-to-face with the patient is for counseling, you can bill based on time - in spite of any other documentation which may or may not be recorded. You must document the total time spent with the patient, the amount of time spent in counseling and a brief description of the conversation. Thus, a “25-minute visit more than half of which was spent
discussing the importance of diet, exercise and weight control in the management of diabetes” becomes a level IV (99214) visit - even if you did not record a history or exam.

Problem: Injections were not always documented correctly. The chart entries did not always note the type of drug given, the dosage administered, how given, or the site of administration. Not only will an auditor consider these services undocumented without all of this information, but also such omissions often lead to improper or omitted billing.

Recommendation: The physician is responsible for documenting the order for the
injection. However, whoever administers the injection should record the exact name of the drug used, dosage, method, and site of administration. The name of the drug, dose, and method of administration should also be noted on the charge ticket since that information is necessary to properly bill for the service.

Note: Several of the injections were noted as “Deca /Depo”. This is inappropriate
documentation. Deca what? Depo what? What doses? It is never appropriate to use this
type of shortcut in documentation. It can lead to inappropriate treatment and be used
against you in a malpractice suit, not to mention the problems it can cause in an audit

Problem: Injections were inappropriately billed throughout this audit. Many were blatantly misbilled by circling the wrong drugs on the charge ticket. Others were not billed at all. Many were billed in dosages smaller than those administered were. Administration was often either not billed (when it may have been appropriate) or billed with incorrect codes. The error ratio on injections is near 100%. This not only represents actual losses to the practice, but also could lead to problems should an audit arise.

Recommendation: (all of the following changes must be made to correct this problem)

1. The charge ticket should be revised to include the dosage represented by the codes
shown. For instance, your charge ticket shows that Rocephin is to be coded as J0696.
It fails to show, however, that this code represents only 250 mg. Many practices

Administer much more than this to their adult patients.

2. You cannot substitute one drug for another in billing. If Lincocin is billed, that must
be what is given and documented. If you give a drug not listed on the charge ticket,
you must list the exact name of the drug given and the dose.

3. Always be sure to indicate the dose administered on the charge ticket. If you do not,
the code is billed “times one”. Failure to do so resulted in a 75% loss on 14 injections
we reviewed. The biggest loss came on Toradol. Code J1885 represents only 15mg,

But you gave 60mg. Additional losses came on Lincocin, which is indicated on the charge ticket to represent 300mg, but you gave 600mg.

4. There should be a charge for every injection given and for every service provided.
There were 25 services in this audit for which no fee was made - 18 of those
injections. This is not only a loss of revenue; it creates an expense and liability to the

5. Administration may be billed separately to some private carriers. While Medicare and
other Government plans consider the administration of injections to be ‘bundled’ into
the allowable for the office visit, some private carriers do not. Check with those

Carriers to see when they allow you to bill separately.

6. Administration of injections and infusion therapy should never be coded as 99211.
This is a misrepresentation of the service provided and has been identified by HCFA
as one of the most abusive situations existing in Medicare today. For that reason, they

Will look at claims billed with 99211 and drugs to determine who is abusing the
system. Don’t let this mistake make you a victim. Utilize the correct code for IM
administration (90782). As for infusion, using 99211 represents a loss, since the
correct code for infusion therapy (90780) actually pays more than 99211. Note: The notes for 03/12/06 do not show what agent is being infused. That is an absolute necessity to properly document this service. Please pull this chart and make this

Your documentation is excellent, but it is important your billing technique change since it is obvious, as stated above, you are under-billing visits the majority of the time. We understand that many practitioners tend to bill at lower levels because they feel that:

1) Billing low codes safeguards them from an audit or

2) They practice in a rural community and want to save the patients money.

These are based upon misconceptions, however. First, any billing practice (high or low) that is aberrant can target you for an audit. Billing the lower code (99212) just guarantees you a loss to your practice.

In addition, you are not really saving your patients a great deal of money when you bill a lower code. Most of your patients have insurance that either a) pays 80% of the bill or b) has set co-pay for each visit - regardless of the code billed. If you reduce your code from 99213 to 99212 to save the patient money, you failed. If their plan has fixed copay, the patient pays the same amount, but you saved the insurance company $10.

If their Plan pays 80% (as in Medicare), you save the patient $2 (20% of $10) and the insurance carrier $8. You, however, lost the whole $10. That’s why the most significant problem for you to address is your coding. Your documentation needs only minor adjustments.

A third point to make is that HMO & PPO plans often make judgments about the level of care provided their patients based upon the codes submitted. If you only bill the lower level codes, they may assume that their patients are not receiving adequate care and either a) suspend your contract or b) reduce future capitated payments to you.

I hope the information provided because of this audit is helpful to you. Should you have questions about the audit or results, please feel free to contact me at (323) 603-8333.


Troy Lair

The Compliance Doctor, LLC

Patient: 216597-5

Coded as 99212 and under-documented Documentation to support 99212 could be:

History: (need CC & HPI) History: (need CC & HPI)

CC: General üup - f/u difference in home BP CC: HBP f/u - difference in home BP

Machine Machine

HPI: 2 point difference, some fatigue HPI: 2 point difference, some fatigue

Exam: (Need 1 finding) Exam: Wt, BP, & pulse rate/regularity

Only Wt & BP shown (inadequate

Need 3 vitals)

Dx: None Given DX: HBP stable

Plan: None Given (just shows needs annual) Plan: Continue meds which are ---

By simply including the highlighted information, the code billed (which was appropriate

For the condition treated) would be supported by the documentation. Failure to include

That information created an overpayment of approximately $12-$15.

Patient: 336789-5

Coded as 99213, but under-documented Documentation to support 99213 could be:

History: (need CC, HPI & ROS) History: (need CC, HPI & ROS)

CC: F/U HBP, GERD & anxiety CC: F/U HBP, GERD & anxiety

HPI: On Xanax (modifying factor) HPI: On Xanax (modifying factor)


Exam: (Need 6 findings) Exam:

Wt & BP shown (inadequate - need 3) 1. Wt, BP, & pulse rate/regularity

1.Chest clears 2. Good color

2.No edema 3. Relaxed, no anxiety

4.Lungs CTA


6.No edema

Dx: None Given DX: HBP, GERD, anxiety stable

Plan: Refill Xanax & get flu/pneumonia shots Plan: Refill Xanax & get flu/pneumonia shots

By simply including the highlighted information, the code billed (which was appropriate for the condition treated) would be supported by the documentation. Failure to include that information created an overpayment of approximately $12-$15.


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