January 8, 2020

We’ve been reviewing revenue cycle, coding, and documentation for 35 years. These six secrets are gleaned from common mistakes we see practices make. Following them can improve reimbursement and revenue cycle, and reduce your risk.

Secret #1: Ignore coding at your own peril.

Coding has to start from the top. It’s the physician’s name on the claim form, and he or she is ultimately responsible for accurate coding.

Coding accuracy impacts more than just the denial and rejection rate. Inaccurate coding can increase the risk of payer audits and payer take backs. Payor algorithms are scrubbing your claims and collecting data on your coding patterns. They are looking for higher-than-peers usage of level 4 and 5 E/M codes, as well as overuse of any particular code – even a low-level code.

Improper coding can also impact practice value in a potential acquisition or hospital employment transaction. When we identify coding issues during our due diligence reviews, it often takes a toll on the transaction price. And rarely in favor of the physicians.

Finally, diagnosis coding is essential under bundled payments and other risk-based contracts. If you don’t code to the highest level of specificity your risk adjustment will be impacted in a way that doesn’t allow you to fare well under risk.

Secret #2: The EHR chart is an audit risk.

There are two things to be concerned with: 1) Auto-population, which is when you pull forward a note forward from the previous visit and all of those same data elements remain. 2) Cloned notes, which is when physicians don’t create unique documentation for the patient visit.

Here are a few EHR do’s and don’ts.

• Don’t use the EHR to auto-populate information from the patient’s last visit unless it’s clinically relevant to the current visit. Make sure that all data elements are specific to the current visit. Use custom notes to document findings that are pertinent and specific to the current visit, so the note is unique.

• Do evaluate your template use. These should be highly customized by visit type, condition, and provider.

• Don’t choose E/M codes based on the volume of documentation that the EHR produces. Choose them based on the level of history, examination, and medication decision making.

Secret #3: Medical necessity is the basis for audits and denials.

Medical necessity is a term used to describe the policies that payers use to determine coverage and payment. To get paid, you must follow these policies, which include guidelines such as which conservative treatments to try first, what must be present on scans or X-rays, and which diagnosis codes satisfy the requirements.

Payer policies are very clear about how to achieve medical necessity, and payers put these policies on their websites. Ask staff to collect the medical policies from your top ten payers for your most common procedures. Have them distill the key points of the policies into cheat sheets for each procedure. Many practices put these in a binder or set of sheets in the clinic area. This makes it easy for physicians to review them quickly and use words from the policies – we call these the “magic words” – in their documentation.

Secret #4: Proactive patient collections are a must.

Over the last few years, many of our clients have watched their patient receivables climb to new heights. Those that have not switched from reactive, “we’ll bill you after insurance pays,” policies are writing off tens of thousands of dollars to bad debt or collections.

Given the number of high deductible health plans, patients are responsible for more of the bill than ever. Practices must collect these amounts up front, or risk not collecting them at all. If you are not collecting pre-surgical deposits, or collecting unmet deductible and coinsurance amounts for office visits, X-rays, injections, and other office services at the time of the visit, add these to your 2020 goals. Need help implementing these practices? Try our free, Ultimate Guide to Time of Service Collections.

In addition, offering multiple payment options will help patients pay the large amounts they owe. Most patients can’t afford to pay a $3,000 deductible all at once. But practices cannot afford to be the bank. Modern practices offer recurring, automated payments on a credit card and patient financing through a company such as CareCredit.

Secret #5: Overuse of one E/M service level will get you noticed.

Most physicians know that level four and level five visits are a risk area. If you bill more of those than your peers and your documentation supports it, that’s fine. Just know that if you are billing a lot of these codes you are going to stand out.

We have clients who do a good job substantiating those codes in their documentation because they know their patient population trends toward higher level codes. But they also are aware that it’s not a matter of if, but when, they will get a letter requesting records or potentially an audit because of their different coding pattern. They are prepared and they know the rules and they document properly.

Another risk pattern is the high use of a particular E/M code. If physicians overuse one code – even a level 1 – they will stick out from their peers and payors may want to take a deeper look. From the payer’s perspective, this looks like the physician doesn’t know how to code properly.

To mitigate your risk, conduct internal E/M audits at least annually. Generate an E/M code usage report by doctor, and for the practice in total, and compare the patterns to state and national peers. CMS offers this data for Medicare claims, for a small fee. (We offer an Excel-based tool that makes this process easier and already includes the Medicare data: E/M Profile Analyzer.) Look for codes where your patterns different from peers. Then, review ten notes for each provider and make sure that the support the actual codes billed. This is where you’ll probably identify training needs. Put all your findings in your compliance plan – including learnings and any training sessions held and who attended.

Secret #6: Review reports and metrics regularly.

Reviewing reports and metrics are like ordering an MRI for your business. Just as physicians look at an MRI to figure out what’s going on, our consultants look at reports like the ones below to understand where further investigation is needed. So should you.

Charges, Payments, Adjustments
  • By Provider
  • By Payor
  • By CPT Category
  • By Location
A/R Aging (Age by Service Date, not Posting Date) – separate insurance and patient receivables
Adjustments (Non-contractual) – periodically review the 100% adjustment report, by claim and by code
  • By Provider
Credit Balances
CPT Frequency/Usage
Denial Report
Rejection Report
Unapplied Payments
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