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Primary care troubled by coding errors

Medicare officials suggest doctors may have trouble deciphering evaluation and management guidelines in billing.

By Markian Hawryluk, amednews staff. Dec. 8, 2003.

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Washington -- New data on the percentage of Medicare claims submitted and paid improperly show primary care physicians and carriers are struggling with the complexity of coding and billing regulations, physician groups said.

In November, the Centers for Medicare & Medicaid Services announced a national error rate for fiscal year 2003 of 5.8%, representing about $11.6 billion in Medicare spending. The Health and Human Services Office of Inspector General, which had conducted the review in past years, reported an improper payment rate of 6.3% in 2001 and 2002.

While the error rate is often cited as a measure of fraud in the program, it is intended to quantify the percentage of claims not paid properly under Medicare billing rules. Those include services that were legitimately provided but improperly billed. It also includes such mistakes as using the wrong code or not providing sufficient documentation to show that a service was medically necessary.

For the first time, the survey calculated specialty-specific error rates. CMS now plans to focus its corrective efforts on those categories or types of health care practitioners with high percentages of improper claims.

The physician specialties with the highest rates include many of the primary care specialties that tend to bill more for evaluation and management services than for other procedures. Internists, general physicians and family physicians had error rates of 20% or higher for submitted claims, while Medicare carrier error rates for reimbursement to those specialties were 16% or higher.

"I would expect it would have something to do with E&M guidelines," said Leslie Norwalk, CMS deputy administrator and chief operating officer. "I've certainly heard plenty from that particular community about how difficult it is to get it right."

The American College of Physicians said, given the difficulty even experienced professionals have with E&M coding, CMS should not include in the improper payment rate E&M coding errors if there is only a one-level discrepancy in the code. In a letter to CMS, the college cited a 1995 study in which the OIG asked eight Medicare carriers to code five hypothetical patient office visits. None of the five examples were coded the same way by all eight carriers.

ACP also questioned whether the contractor reviewing the claims had sufficient expertise to accurately review E&M service claims.

The American Academy of Family Physicians said the error rate reflected the complexity that primary care physicians face.

"If you look at our scope of practice, it is the [entire] code book," said AAFP President Michael Fleming, MD. "It's so broad that there is much more potential for billing error."

Dr. Fleming said widespread implementation of electronic health records integrated with billing systems would help reduce problem claims. "It's an area that we want to see drop," he said. "If we can encourage physicians to utilize technology, specifically an electronic health record, we think that will go a long way toward decreasing these billing mistakes."

The results of the improper payment review indicate much work still must be done to identify and prevent errors, CMS Administrator Tom Scully said. "Now that CMS has detailed error rates, we can aggressively target our efforts by strengthening the management of our contractors and concentrating on the problems indicated by the error rate. Our goal is to bring about a dramatic reduction in Medicare payment errors in the next 24 months."

Controversy over the numbers

The agency's effort to get more detail about the accuracy of claims processing by Medicare carriers, however, sparked questions about the validity of the new method for calculating the percentage of improper payments.

The OIG surveys through 2002 were based on about 6,000 claims. This year, Medicare hired a private contractor to review about 128,000 claims and provide a detailed breakdown of the error rate by carrier, by type of health care practitioner, and by physician specialty. Improper payment rates by CPT code will be released in December.

But CMS' contractor ran into difficulty getting physicians and other health care professionals to send in the medical records it needed to review the claims. For about 5% of the claims, the practitioner did not respond to the request for the medical records. Had the contractor classified all those payments as improper, the error rate would have been 9.8%.

Norwalk said there could be a number of reasons why those records were not provided -- everything from concerns about violating patient privacy laws to not having the right address. The cost of the task could have been an issue for physician practices, she said. A doctor might balk at spending $30 in nurse time to pull a medical record for a claim that paid only $3, she added.

"It's not really economically viable for you to go and do all that work to pull all those claims that you've got somewhere in storage," Norwalk said.

CMS decided to reclassify those 5% of claims based on previous experience, and as a result revised the 9.8% error rate to 5.8%. Senate Finance Committee Chair Charles Grassley (R, Iowa) blasted the decision and called on the OIG to monitor CMS' error rate calculations.

"It appears that the unadjusted error rate of close to 10% was too high for CMS -- almost four percentage points higher than in the previous two years," Grassley said. "So CMS reports that it adjusted that figure downward to the 5.8%."

Norwalk countered that despite the problem in determining an overall rate, the more detailed analysis provides CMS with a tool to address the problem.

"Yeah, it'd be nice if we had the statistical number perfect, but my issue from a management perspective is making sure we pay those billions of claims accurately," she said.

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