The HHS Office of Inspector General released a report finding Medicare inappropriately paid $6.7 billion for evaluation and management services claims in 2010. Here are 10 key things to know about E/M services, their coding and documentation requirements, and the improper Medicare payments.
1. E/M services are covered under Medicare Part B and are performed by physicians and nonphysician practitioners to assess and maintain beneficiaries’ health. These services are divided into broad categories (known as visit types) reflecting the type of service, the place of service and the patient’s status.
2. The E/M visit types are divided into three to five levels according to the complexity of the visit and corresponding to Current Procedural Terminology codes for billing. Higher level codes within visit types correspond to more complexity and higher payment rates.
3. Physicians are responsible for ensuring their Medicare claims accurately reflect the E/M services provided. The level of E/M service depends on seven components: patient history, physical examination, medical decision-making, counseling, coordination of care, the nature of the patient’s presenting problems, and time.
4. Physicians must also provide clear and concise medical record documentation supporting the medical necessity, appropriateness and level of the E/M service. Correct documentation should include the care a patient received and relevant facts, findings and observations about the patient’s health, according to the OIG. The record should also be complete, legible and include the date and identity of the physician who administered the services. The author of the medical record must also authenticate it with a handwritten or electronic signature.
5. Physicians increased their billing of higher level codes for E/M services in all visit types from 2001 to 2010, according to the OIG. During that time period, Medicare payments for E/M services increased by 48 percent to $33.5 billion, and the average Medicare payment amount per E/M service went up by 31 percent to $85. Furthermore, the OIG has pinpointed 1,669 physicians who consistently billed for the two highest-level codes in 2010. Critics and whistleblowers have alleged physicians are abusing the system, while many physicians and hospitals have said they were actually “undercoding” previously and that the rise of electronic health records has allowed them to more accurately document care services, according to a report from The New York Times.
6. According to a 2011 CMS Comprehensive Error Rate Testing program report, E/M services are 50 percent more likely to be paid for inappropriately than other Part B services, and most of the erroneous payments stem from incorrect coding and insufficient documentation.
7. Medicare paid a total of $32.2 billion for E/M services in 2010, almost 30 percent of Part B payments that year.
8. The OIG conducted a medical record review of a random sample of Part B claims for E/M services from 2010 and found 42 percent of the claims were incorrectly coded, meaning they billed at levels either higher or lower than warranted. Additionally, 19 percent of the claims lacked documentation.
9. There’s a significant link between consistent high coding and incorrect coding and insufficient documentation. The OIG found claims from high-coding physicians — those who consistently billed higher-level codes — were more likely to be incorrectly coded or lack documentation, compared with claims from other physicians. Fifty-six percent of claims for E/M services from high-coding physicians in 2010 were incorrectly coded, compared with 42 percent of other physicians’ E/M claims.
10. However, it doesn’t seem like CMS plans on cracking down on high-coding physicians via medical review contractors. Although the OIG has recommended encouraging contractors to review E/M claims from high-coding physicians and follow up on inappropriate payments, CMS responded that it has already directed a medical review contractor to review claims billed by high-coding physicians and the first phase of these reviews led to a negative return on investment. Still, the agency is considering alternatives, such as comparative billing reports.