Medical practices are leaving money on the table by under-coding


Medical practices are leaving money on the table by under-coding.

Are one or more of your physicians under-coding? Missing revenue? Or relying too much on COVID-related funding?

These are valid questions, as medical practices are getting back to pre-pandemic levels of care and encounters. Under-coding in particular has been a topic of concern lately.

As an auditor, I am typically hired to review medical records for over-coding and noncompliance. It is my goal to make sure that medical practices, both general and specialty, are supporting their medical services appropriately with their payors, without over-coding and while remaining in compliance with Medicare and commercial payor policies. However, in the past year, during what has been a very long public health emergency (PHE) due to the COVID-19 pandemic, my audit findings are reflecting more under-coding and lost revenue than over-coding.

This bad habit can lead to lower revenues, not getting paid for what you actually did, and eventually, threats to the solvency of your practice. Multiply those issues by 25 to 30 patient encounters daily, and it’s little wonder that physicians are missing a ton of money – important and well-earned revenue.

During the pandemic, many physicians just tried to stay afloat with various programs from the U.S. Department of Health and Human Services (HHS): survival programs such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) funding, and the Provider Relief Fund (PRF). But now, the focus is on recovery and getting back to basics by taking a hard look at missed revenue and under-coding.

There are a variety of reasons under-coding occurs. Among them are:

Doctors are hurried by seeing numerous patients in a short period, leading them to slack off on their charting notes, which can lead to services not being captured.

Physicians can tend to chart notes without regard to the new 2021 Evaluation and Management (E&M) guidelines, leaving coding staff with minimal options except to under-code their office visits.

Physicians and other clinicians may not be aware that a single procedure, such as excising a skin lesion, may also include a layered closure, or that putting a cast on a patient’s fractured wrist can include multiple CPT codes for services and modifiers – or even that what is thought of as a single stress test could require multiple CPT codes to represent the entire service.

Many physicians have concerns that overly aggressive coding may trigger an audit by an insurer or Recovery Audit Contractors (RACs), prompting them to be too conservative in their coding practices.

Contributing to the issue of under-coding is the fact that there have also been significant changes in specific CPT office visit codes for 2021. These changes became effective January 2021, when the American Medical Association (AMA) substantially revised the guidelines of the E&M codes for outpatient visits, covering CPT codes 99202-99215, and practices have been trying to get their providers trained on the new documentation rules ever since.

The changes clarify what constitutes a discussion between physicians, other healthcare professionals, and patients, as well as how test results are analyzed, among other things. The changes stressed the importance that physicians and clinicians should place on recognizing and addressing all patient problems, whether acute or chronic, and how each may link to the overall risk and management of a patient. Even though the history and exam portions of the encounter were relaxed in the new documentation rules, the medical decision-making efforts now must include more specific detail to capture the correct level of service of each patient encounter.

The importance of the coding changes aside, they came at a particularly difficult time for providers, as they were and are still trying to figure out managing telehealth services and the different associated governing rules each payor, including Medicare, has published. Medical practices were already struggling with the fallout from the COVID-19 pandemic, with canceled and delayed surgeries and elective procedures, and the financial risk of having coding rejected by payors increased – as did lack of access by payors to work claims.

Many of my clients were hit hard by these changes and saw their revenue drop over 60 percent at the start of the pandemic, with forced shutdowns, having to cut business hours, and entering survival mode, while also sending staff “home” to work without notice. Although some practices were able to recover somewhat by administering COVID-19 tests and evaluations, and proceeding with the telehealth option, the focus on keeping doors open safely made it difficult for many practices to adjust to the new coding guidelines when they took effect.

When I noticed that practices stopped performing AWVs (annual wellness visits) for Medicare patients, behavioral health services, and certain care management and therapy services during the pandemic, it was time to have a sit-down and let practices know that these services simply cannot stop during a PHE (and shouldn’t). It was time to take an extremely close look at coding and billing practices.

Luckily, many medical practices quickly realized the depth of their missed revenue opportunities. In this discussion, I also mentioned the PHE telehealth list, where many of these missed services are available to be performed during the pandemic (and have been added to a permanent list, post-PHE).

In one client example of lost revenue, I reviewed 100 patient office visit encounters for a family practice office, June-December 2020, and found that almost 80 percent were under-coded, not over-coded. Missing cognitive assessments, smoking cessation discussions, split billing for preventative and problem-oriented visits on the same date – the list goes on. It was almost $90,000 in lost revenue.

Denials were also an issue for many practices – specifically, writing off denied services without first making sure the denials were accurate. In the 75-patient sample of EOBs (explanation of benefits)) I reviewed from an orthopedic practice from October 2020 through February 2021, I found around $27,000 of incorrectly denied services arbitrarily written off as “contract write-off” or “PPO write-off” when that was not the case at all – and many services were also related to patient responsibility. These numbers where staggering when you think that was only a sampling of billing practices, and it would be very hard to near impossible to go back and try and appeal or recapture funds if contract time limits were exceeded. (I was able to go back and appeal about $20,000 of those services and get them paid).

Missed revenue opportunities from under-coding and old or dated billing practices can cost physicians not only money, but time, and possibly, fear of losing their practice. It is time to have a serious look at your billing and coding practices and determine if changes need to be made to workflow processes, payment posting, and collection processes – but most importantly, physician and clinical provider processes must be reviewed so that services can be captured on the front end and billed appropriately.

Not only will the revenue boost be welcome, but as practices are still trying to recover from the pandemic, and the patient mix has yet to return to what it was, it has become increasingly clear that the financial future of medical practices will rely on a clearer focus on coding optimization and proper documentation.

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