Medicare zeroes in on E&M coding as key source of payment mistakes

AMA's CPT panel will work with Medicare to clarify coding.

By David Glendinning, AMNews staff. Jan. 3/10, 2005.

Washington -- If physicians are able to gain a better understanding of one of Medicare's most frustrating administrative requirements, there may be hundreds of millions of dollars in it for them.

That's the message that the Centers for Medicare & Medicaid Services gave the American Medical Association last month, when the agency released its report on improper Medicare payment rates for fiscal year 2004.

Confusion about which codes to use for services contributed to estimated overpayments of more than $20 billion to various program participants.

But nearly $1 billion stayed in the federal coffers when it should have gone to medical professionals, and the agency suspects that the same coding confusion could be largely to blame. A special investigation of underpayments found that the vast majority of the reimbursement shortfalls to physicians alone could be linked to a familiar administrative headache: the evaluation and management code. Studies from past years had focused only on overpayments.

In part because of this discovery, CMS is asking the AMA to collaborate on a new effort to give physicians and carriers better guidance on E&M codes, which have been used since 1992 for some of the most common services that doctors provide. The agency last updated its written set of guidelines for the Association-owned system in 1997.

The AMA Current Procedural Terminology Editorial Panel, which is responsible for drafting changes to the coding structure, welcomed the chance to take another swing at improving a system that has left so many doctors perplexed and dissatisfied.