Why upcoding isn’t necessarily fraud

Over the past several decades medical costs in the United States have escalated rapidly, exceeding the pace of inflation and threatening bankrupt to Medicare.   As we heard in last week’s presidential debate, different solutions have been proposed on how to slow Medicare’s growth and reduce cost.  President Obama highlighted his administration’s success in tackling fraud and waste within the system. This strategy appears to be supported across party lines.  On face value it seems like a good idea, but what is not entirely clear to those of us within the medical community is how waste and fraud will be defined.

I have discussed this in a previous blog: “When is Unneeded Care Criminal?” As reported by the New York Times,  recently attention has been focused on going after doctors and hospitals who some believe may be “upcoding” the complexity of their patient encounters to CMS and other insurers for the purpose of receiving better reiumbursement.  Apparently since the advent of electronic health records there has been a trend toward physicians’ reporting higher complexity office visits.

AMA Wire reports:

“The Centers for Medicare & Medicaid Services (CMS) notified the AMA that Connolly, a recovery auditor for what is commonly known as the Medicare RAC program, will begin auditing how physicians report CPT® code 99215, used to report evaluation and management (E/M) services. CMS appears to have also granted Connolly authority to extrapolate its review of sample claims to potentially recoup funds on 99215 claims it did not evaluate individually.”

The AMA strongly objects to these audits and has written a letter to CMS pointing out that:

“Audits of such complex services would result in erroneous payment recoupment and undue expense for physicians and CMS. According to the agency’s own report to Congress, 46 percent of appealed Medicare RAC determinations are decided in favor of the physician or other health care professional.”

What does upcoding mean? Medicare and other payers require that doctors use a convoluted coding system for billing medical visits based on their documented complexity. The system is so complex that for years it has outsmarted doctors who have been tasked with remembering the numerous elements required to justify the level of the visit (1 through 5), and then document the details required to support the billing level.

The selection of an appropriate billing code, as outlined in an 89-page guide prepared by CMS, if done correctly would without a doubt take the same amount of time (or perhaps more) as seeing the patient.  The end result:  most physicians, with limited time and partial recall of the complicated rules, pick the code that they feel best encompasses the visit level based on perceived complexity.

In the past when doctors dictated or hand wrote patient notes it was more difficult to include all of the historical factors required to support a higher level billing code. The use of electronic health records, however, has made the process easier by automating the incorporation of past medical history, medications, allergies, social history and family history into clinic notes, thereby allowing physicians to justify a higher level code. Until recently, based on personal experience, the tendency may have been to “undercode” complex visits, with fear that documentation would be inadequate to justify a more complicated billing code. In reality, it is very time consuming to fully document the complex information that is exchanged in the context of a 15-30 minute office visit.

The purpose of medical documentation is to convey information.   Ideally doctors would be able to document the salient portions of each patient encounter that would help other providers care for the patient in the future.  In many ways electronic health records have helped facilitate medical documentation.  However, at the same time they have also led to the inclusions of extraneous information (for the purpose of supporting billing codes) that one is required to sift through while getting to the meat of the visit.

What is particularly enraging about these allegations of “upcoding” and fraud is that finally physicians have a tool to help ease the burden of Medicare’s inane billing code system—electronic health records; but now, after going through all the work and tremendous expense of transforming our practices and adopting these systems, we are threatened by the specter of accusations of fraud for “upcoding” the same visits that we’ve been “downcoding” for years.

If politicians would like to eliminate waste from Medicare why not simplify its billing system so that medical practices would not have to employ full time coding experts to ensure that their practices remain fiscally solvent? Of course, this would also eliminate a bunch of jobs.

Juliet K. Mavromatis is an internal medicine physician who blogs at Dr Dialogue.

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