Published 4/1/2009
Mary LeGrand, RN, MA, CCS-P, CPC

Is your practice audit ready?

The OIG 2009 Work Plan is taking a close look at coding

There’s nothing secret about what the Office of the Inspector General (OIG) for the Department of Health and Human Services is planning. It’s all laid out in the OIG Work Plan for Fiscal Year 2009.

The following provisions on this year’s agenda (shown in italics) have applicability to orthopaedic practices.

Place of service errors
We will review physician coding of place of service on Medicare Part B claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments. Federal regulations … provide for different levels of payments to physicians depending on where the services are performed. Medicare pays a physician a higher amount when a service is performed in a nonfacility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ASC. We will determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments.

So what does this mean to you? Say, for example, you see a patient in the emergency department (ED) at the request of the ED physician, and you perform an evaluation and management (E&M) service supported by CPT code 99243. Maybe you forget to tell the staff that the service was performed in the ED and they enter the office as the place of service on the CMS-1500 claim form.

The difference between the Medicare payment for this service when performed in the office (under the nonfacility fee schedule) and the payment when performed in the ED (under the facility fee schedule) is $27.41 (unadjusted). If this happens repeatedly, the dollars add up. That’s why the OIG is looking at place of service.

To avoid being audited, take the following steps:

  • Ensure accurate identification of place of service when submitting charges for care rendered outside your practice.
  • Never report the “office” as the place of service for care provided in the ED, ASC, outpatient facilities or for services provided in the inpatient setting. These locations are covered by the facility fee schedule; your office is covered by the nonfacility fee schedule.

E&M services during global surgery periods
We will review industry practices related to the number of evaluation and management (E&M) services provided by physicians and reimbursed as part of the global surgery fee. … Under the global surgery fee concept, physicians bill a single fee for all of their services usually associated with a surgical procedure and related E&M services provided during the global surgery period. We will determine whether industry practices related to the number of E&M services provided during the global surgery period have changed since the global surgery fee concept was developed in 1992.

The impact of this provision can be illustrated with the following example: A wound infection develops in a Medicare-covered patient after total knee arthroplasty (TKA). The patient sees the physician in the office. The physician evaluates the wound and bills an E&M with modifier 24 and links the visit diagnosis to wound infection—not the osteoarthritis diagnosis that resulted in the TKA. Because the wound infection diagnosis is “different” than the osteoarthritis diagnosis, the system may process it as a separate condition, resulting in payment. This is incorrect coding and represents a risk to the practice.

To avoid being audited, take the following steps:

  • Review the Medicare global surgical package rules, which state that the treatment of all complications treated in the office are included in the surgical package.
  • Do not “change” the diagnosis to look “different” and to inappropriately bypass the edit system.
  • Use the modifiers tab in Code X to review the definition of the modifiers.
  • Record CPT code 99024 (postoperative no charge visits) into the practice management system to document provision of services during the postoperative period.

Services performed by nonphysicians
We will review services physicians bill to Medicare but do not perform personally. Such services, called “incident to,” are typically performed by nonphysician staff members in physicians’ offices. The Social Security Act … provides for Medicare coverage of services and supplies performed “incident to” the professional services of a physician. However, these services may be vulnerable to overutilization or put beneficiaries at risk of receiving services that do not meet professionally recognized standards of care. We will examine the qualifications of nonphysician staff that perform “incident to” services and assess whether these qualifications are consistent with professionally recognized standards of care.

This situation could arise when a Medicare beneficiary comes to the office with a wet cast and no physicians or nonphysician providers such as physician assistants or nurse practitioners are available. The cast technician calls the surgeon, who is in the operating room, and applies a new cast under the physician’s instructions. The cast technician gives the charge entry staff an encounter form for the cast application and supplies.

Although the surgeon instructed the cast technician to perform the service, the service is not separately reportable because the physician is not in the office providing direct oversight of the cast technician’s services. Such a situation can be avoided by reviewing all aspects of the practice to ensure services are reported correctly under Medicare billing rules.

Payments for unlisted procedure codes
We will review the accuracy of Medicare payments for services billed using unlisted procedure codes. Unlisted procedure medical codes are miscellaneous codes used by service providers only when there are no specific Healthcare Common Procedure Coding System (HCPCS) codes that accurately identify the medical service furnished. The Social Security Act … establishes the Medicare Provider Fee Schedule, which provides a payment amount for almost all HCPCS codes, as the basis for Medicare reimbursement for physician services. However, unlisted procedure codes are not paid under the fee schedule. The Medicare contractors that process such claims suspend them for individual review and manual pricing. We will examine provider usage of procedure codes for services not listed in the HCPCS.

For example, using an unlisted code for a femoral head resurfacing procedure with insertion of an acetabular liner because you do not think the value of this procedure is reflected in CPT code 27130—Arthroplasty, acetabular and proximal femoral prosthetic replacement (total hip arthroplasty), with or without autograft or allograft—is an incorrect use of an unlisted code. To avoid using unlisted codes incorrectly, take the following steps:

Review correct coding rules and submit all services with a CPT code that describes the work performed.

Only use unlisted procedures when a procedure is performed open or arthroscopically and no CPT code describes the service.

Use Code X to ensure no CPT code exists to describe the service.

Develop internal processes to manage authorization, precertification, and accounts receivable management when it is necessary to report an unlisted procedure.

Medicare billings with modifier GY
We will review the appropriateness of providers’ use of modifier GY on claims for services that are not covered by Medicare … modifier GY is to be used for coding services that are statutorily excluded or do not meet the definition of a covered service. Beneficiaries are liable, either personally or through other insurance, for all charges associated with the provision of these services. … providers are not required to provide beneficiaries with advance notice of charges for services that are excluded from Medicare by statute. As a result, beneficiaries may unknowingly acquire large medical bills that they are responsible for paying. In FY 2006, Medicare received over 53 million claims with a modifier GY and denied claims totaling over $400 million. We will examine patterns and trends for physicians’ and suppliers’ use of modifier GY.

For example, a hyaluronate injection in the shoulder is not covered by Medicare. If you offer a Medicare patient a hyaluronate injection in the shoulder, you could appropriately append the GY modifier to the injection code because Medicare covers hyaluronate in the knee but not in the shoulder.

This step is recommended because a secondary insurance may cover this service, and you would need a Medicare explanation of benefits to file with the secondary insurer. If a service is not covered by Medicare and you notify the patient in advance, the patient should pay for the service.

The OIG wants to ensure that services are not inappropriately reported with a GY, resulting in increased payments by their beneficiaries. Review the full OIG Work Plan for Physicians to identify other areas of focus that may be applicable to your practice.

View the complete OIG Work Plan.

Is it time for an internal audit?
The Centers for Medicare & Medicaid Services has contracted with recovery audit contractors (RAC) to recoup payments to providers. RAC auditors are paid based on the percentage of overpayments they identify in provider claims.

Conducting an internal review of your practice’s coding and documentation is a good next step. Before you begin the audit, consider consulting with legal counsel experienced in healthcare regulatory matters; the audit plan and required action from the audit findings should be carefully considered. In terms of managing risk, using an expert, outside resource for your coding audit may be more beneficial than conducting a self-audit.

Mary LeGrand, RN, MA, CCS-P, CPC, is a consultant with KarenZupko & Associates. The information in this article has been reviewed by members of the AAOS Coding, Coverage, and Reimbursement Committee. If you have coding questions or would like to see a coding column on a specific topic, e-mail aaoscomm@aaos.org