HCFA evaluation and management audits take a toll on practices
How can you avoid being one of the 60% denied payment?
There's nothing like the threat of jail time or a potential impact on revenues to make practices sit up and take notice of a new regulation. The Health Care Financing Administration's (HCFA) March denial of 60% of claims submitted for evaluation and management (E&M) services should be a signal to practices that the agency means business in its crackdown on potential fraud and abuse. The March audit was a preview of what practices can expect once the new E&M criteria go into effect in July.
The expected end result for many practices, according to physician leaders interviewed by Practice Marketing and Management: undercoding in order to avoid attracting attention.
Tom Prose, MD, senior medical director for General Medicine in Plymouth, MI, was one of the physicians surprised by a claim denial. He has previous experience with the audit process and thought General Medicine was ready. "We take HCFA rules very seriously," he says. "There are no rules, though, for progress notes, so we took the regulations for history and physicals and applied them to our criteria for a progress note. We figured that would cover us."
Prose also personally reviewed the charts, and even highlighted various sections so that the auditors would be able to see them better, he says.
Despite those efforts, Prose's 135-physician practice was told that the claims were denied based on "medical necessity" - a catch-all category of denial. The real issue, discovered by Prose only after weeks of calling, was illegible physician signatures.
General Medicine doesn't believe in writing off bills. "I'm sure we spent more on it in [terms of] time [spent] than if we wrote it off," he says, noting that the claims denied were only worth about $500. "But we don't do that with bills. We bill fairly and document fairly, so no, we won't write something off."
Other practices could see a more serious financial impact from denied or delayed payments.
Jean Holt, MD, an ophthalmologist in practice in San Antonio, says she feels the impact of the new E&M guidelines daily. "This is making our lives miserable," she says. "I spend more time on paperwork and on deciding which box to check than I do seeing a patient. I'm a half hour late on every patient because of all these forms. I don't know if I want to do this any more."
Holt says she knows five nationally prominent ophthalmologists who have decided to close up shop rather than deal with it. "We want to do this right, but you end up spending so much time complying with these new rules. And it isn't just your neck on the line anymore. Your staff can also be liable."
Robert Westergan, MD, medical director for Jewett Orthopedic Clinic in Winter Park, FL, says the net effect of the new guidelines - which go into effect in July - is that practices will underbill.
"The goal is to make it harder and harder for a practice to bill for a higher level exam. In the end, people will look at the requirements and then look at the penalties, which now include a fine and even jail time, and decide it isn't worth it," he adds.
With 75% of her practice Medicare-related, Holt has no choice but to find a way to work within the new rules. She says that way will be to undercode. "I wouldn't do anything questionable, but people like me will just decide to code at a lower level so that we don't have to spend so much time on it. We'll lose money, but HCFA will win."
Prose's practice will probably also undercode. "Determining the complexity of a history and physical is objective. So is the complexity of the exam. It is the decision making that is subjective."
The new rules state that if two of the three are at a higher level, you can bill for that level. But Prose says that at General Medicine, if the history and physical and exam are a level three, and the decision making is a level two, his doctors will bill for a level two. "It is a conservative approach, but it is the way we are going to do things."
Holt says she is not so fatalistic about the future that she has abandoned all hope. She has sent her staff to seminars, and both Holt and her associate have also attended classes. "The key is to get the office staff to a point where they feel comfortable with coding." Holt and her associate also will do regular internal audits of the paperwork.
"We don't want to go to jail, so we have trained everyone," she says. "I think the classes were really valuable on many fronts. The staff appreciate your interest, and it makes them less nervous about their potential liability."
Westergan's practice has started a compliance program that includes instructions to groups and individual physicians on the new rules. Jewett will also conduct regular internal audits. Some hospitals have started whistle-blower hotlines, but Westergan says that may be going a little farther than most practices need.
He says that most specialty societies are a good resource for education on the E&M rules. A call to your local branch should provide information on classes and seminars.
If you do get denied a claim, Prose says you have to push for answers. "Provider inquiry is a morass of bureaucracy," he says. "You can't get a written report, only a verbal one, and that takes a couple of weeks."
But Westergan says it is important to get the answers - not only because you learn from your mistakes, but because you don't want HCFA to assume you are a pushover.
"If they see us give in, they will deny more and more of our claims," says Prose. The best piece of advice he says he has is for physicians to read the rules. "Most doctors are busy and rely on their office staff for this. But that's not good enough any more."
Things may yet change - many of the specialty societies are so upset with the new rules that they are lobbying for alterations. In the meantime, most physicians agree that if they stay and the rules remain as written, they will be spending more time filling out forms. The only question is, with how much ease?
"I'm fairly au fait with this area," Westergan says. "And yet I find the new rules almost beyond me."
· Jean Holt, MD, Stone Oak Ophthalmology, San Antonio. Telephone: (210) 490-6759.
· Tom Prose, MD, Senior Medical Director, General Medicine, Plymouth, MI. Telephone: (734) 453-6970.
· Robert Westergan, MD, Medical Director, Jewett Orthopedic Clinic, Winter Park, FL. Telephone: (407) 647-2287.
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