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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  • buzzkillersmith

    The government is freaking out about the cost of medical care. When a system is complex, it’s just a lot easier to find someone to blame instead of finding fault with the system. If the system is messed up, it needs to be fixed, and that’s just too hard. Better to find someone to blame. This is America, after all, and America needs scapegoats, always has. My advice: Keep your head down until there’s another war or terrorist attack or financial meltdown or something. The spotlight will then point some other direction. Someone else will have to take a turn of being the bad guy.
    As regards the purpose of the medical record being the efficient sharing of medically useful information: I just reviewed the records of a new pt. The previous doc has an EHR. The notes for a uti and for a sore throat were each 4 pages long. Comical, really.

    • http://onhealthtech.blogspot.com Margalit Gur-Arie

      I have to disagree with your advice. The longer you keep your head down, the less likely it becomes that you will ever be able to raise your head again.
      If this was an isolated incident, I might have agreed, but unfortunately this seems to be part of a much larger effort to discredit the integrity of the medical profession in order to transition the ability to make decisions to other “interested” parties.

  • http://www.facebook.com/people/Ardella-Eagle/100003689610855 Ardella Eagle

    With the advent of EHR/EMR, you have the ease of documentation that is supposed to be done at every visit, least there is a change, hopefully freeing up the physician to spend better quality time for the new complaint or a more thorough exam. With the higher quality exam, should there be an upcoding? No, unless more time is spent with the patient. If I recall correctly, a level 4 was up to 30 minutes face time with the patient and a level 5 was a 60 minute face time limit, complexity not withstanding. More than that was not considered. It was my experience that the physician did not bill for telephone consultations (an easy level 1) even though it was always documented and the volume of such calls took up considerable time.

    Most physicians would downcode or not bill for the telephone consults for fear of red-flagging themselves. Too many high level codes and too many simple codes could generate an investigation, creating crushing paperwork in supporting documentation, something practices today do not have the time for. Instead, they bill for routine procedures that would normally get overlooked (venipuncture, prep for minor surgery of ear wax removal) that wouldn’t necessarily alert the insurance company, but when the patient gets the EOB/EOMB, they’re shocked to see what they are being billed for and how much.

    Upcoding is not the only area of fraud. A more fertile field of fraud is to be found in extraneous/expensive scans, name brand prescription drugs, and repetitive monthly visits just for a drug refill. To simply say ‘fraud’ or ‘simplify its billing system’ is a blanket that doesn’t cover the issue. The ENTIRE system needs to be reviewed diligently. It is my opinion that it isn’t the small practice that is taking advantage of the loopholes in the billing system. In my opinion, it’s the larger, free-standing facilities that commit the most expensive frauds through their billing practices.

    • http://www.facebook.com/people/Michael-Rack/100001703895437 Michael Rack

      1. Return patient visits (I am not sure about new) can be billed either based on face time (with greater than 50% of that time spent on counseling) OR on history/exam/medical decision making/complexity- no time requirement if done the 2nd way.
      2. A level one visit is basically the patient seeing a nurse and the doctor signing the nurse’s note without seeing the patient- an example of this is a blood pressure check. Phone calls have their own (usually not reimbursed) code

      • Monica S

        I am a compliance auditor. Even with all the experience I have, I have a hard time picking an E/M code “cold”. I use a software program to help select the code…The current system is absolutely ridiculously complicated. Instead of mandating use of the EHR, the gov’t should have first fixed the coding system/documentation requirements for each level. It has been debated since it first came out in 1995. They were supposed to fix it (remember the doomed “vignette” proposal?) I always wonder how it is that physicians ended up agreeing to a payment system based on this flawed coding system, when lawyers and other professionals get paid for their expertise, based on an hourly rate. Even electricians and plumbers get paid based on labor rates. But I digress. My point is, the gov’t imposed this ridiculous coding scheme, then imposed (or incentivized, call it what you will) EHRs that helped providers document compliantly for billing, and now accuse physicians of overcoding? The payment system for E/Ms needs to be totally revamped. Its ridiculous!!