In most business sectors, profitability is a straightforward calculation—a measure of a company’s profits after expenses are deducted. The healthcare industry, however, is a different beast altogether. Busy practices are not necessarily more profitable and profits from today can be liabilities years down the line by way of payor audits. Add to the equation variable reimbursement rates from payor to payor, along with increasing costs and additional administrative requirements burdening healthcare providers and profitability is hard to forecast.
While many profitability factors are outside of your control, one key variable is completely under your control: documentation. Documentation can be the shield protecting your practice or its downfall. Every medical provider knows the adage, “If it’s not documented, it wasn’t done.” Now, some auditors are twisting this old saying, alleging “Just because it was documented, doesn’t mean it was done.”
Welcome to the world of billing and coding, where black and white are often eclipsed by gray—where the obvious is rarely so, and where, sometimes, less is more. Fortunately, with consistently complete and correct documentation and a strong resolve in the face of payor audits, you will place your practice in the best position to be prosperous and profitable.
Identify Document Codes Based on Specialty or Commonalities in Patient Population
“Identifying the most commonly billed codes is immensely helpful as it allows the practice to conduct a focused volume study on those services from a billing and coding perspective.”
Identifying the most commonly billed codes is immensely helpful as it allows the practice to conduct a focused volume study on those services from a billing and coding perspective. By “volume study,” we mean an analysis of a practice’s billing volume by CPT code. This often involves a comparison of “typical time” to “real time,” which helps tease out aberrant trends. If you know you’re solid on your “top 10” most frequently billed codes, you’ve gone a long way toward safeguarding the practice. Volume is almost always a factor in triggering an audit.
There are several key factors to consider when identifying commonly billed codes. First, cross-reference the electronic medical record (EMR) output to the code(s) in question to make sure a payor will receive a true representation of the work you did. It’s easy to inadvertently omit items from the note; in other cases, the documentation supporting a particular note may be scattered in piecemeal. You want to make sure the payor sees everything you performed and documented.
It is important to check with your top payors to see if they have medical policies that apply to your most frequently billed codes and modifiers. Consider prioritizing your research by checking your top five payors by volume. For instance, if Medicare is one of your top five and you perform colonoscopies, then it is worth understanding how their medical policies define terms, such as screening versus diagnostic; what modifiers they use; what are the covered indications, and so on.
If the practice has mid-levels, it is unquestionably worth your time to investigate “incident to” billing considerations (e.g., ability to bill claims of a physician extender under the medical doctor). Not all payors follow the Centers for Medicare & Medicaid Services (CMS) rules on this. If you assume otherwise, it can give rise to considerable overpayment demands, which may be subject to extrapolation—and those can be hard to defend.
Also, there are certain modifiers that are frequently targeted by payors, most notably, modifiers 25 and 59. There are specific rules governing these modifiers, which when used properly, enable the provider to bill multiple procedure codes on the same day. Understanding what these modifiers represent and any specific payor nuances is vitally important.
Finally, it is important to check your notes to make sure any outbound hard copy displays the provider(s) signatures and the date/time the note was authenticated. You might think this is a no brainer. Why check? We have seen instances where a practice faced recoupments because the notes did not display this information.
Provide Enough Documentation
Providers are frustrated by payors “moving the goal posts” every few years. How much documentation is “enough”? How much is “enough” is contingent on several factors—and those factors are not entirely predictable. According to CMS, documentation must support the Current Procedural Terminology (CPT) code billed. This sounds simple enough: Look up the code billed and make sure the note has all the elements it describes. Things go astray when you throw in some variables, such as payor policy nuances. Sometimes payor policies deviate from CPT and even though you think you’ve covered all the bases, you find out (sometimes too late) that you haven’t. This is why doing the volume study referred to earlier is key.
The other thing to consider is that there seems to be an ongoing battle between payors and providers when it comes to billing compliance. So many times, we’ve heard providers say, “We thought the way we were charting was right, but they keep changing the rules.” Evaluation and management (E/M) CPT code is an area that is often subject to varying interpretations and modified payor policies. For example, the 1995 rules (which as of 2022, still apply outside the office/outpatient setting) include a nugget in the E/M data aspect for “review and summarization of old records.” How “old” is “old”? How much detail is sufficient? Do you need to preface your note by saying “Old records reveal…”? Or will the auditor make the connection? There are no exact answers to these questions. Audits tend to exploit those areas that are subject to the most ambiguity and yield the greatest returns. There are many ways they can challenge your documentation, especially if they are carrying preconceived notions into the audit concerning the integrity of your billing.
Avoid Top Two Claim Denials
The two denials we see most frequently are for claims of medical necessity and for cloned notes.
Medical necessity denials are usually based on a charge that a specific policy guideline was not met or that the frequency of services exceed the norm. Often, the practice will include a valid diagnosis on the claim, but the claim still does not meet requirements. Take chest pain for example. An ICD10 diagnosis of chest pain on a claim could facilitate payments for certain types of cardiovascular tests. But not all chest pain requires a stress test. Just because something is coded correctly, doesn’t mean it is medically necessary.
Often, unfavorable payor audits are riddled with vague allegations and include statements alleging “lack of medical necessity” or something akin to that. However, when we examine the claim and review audit trails, we frequently find that both private and public payors are denying claims based on allegations that the provider simply copied and pasted prior notes. “Copy/paste” records that are without needed modifications to content are infamously known as “cloning.”
If your notes on a patient don’t change at all between the first visit two years ago and the 15th visit last week, that’s a concern. But often, although certain sections of the note are carried forward, the rest of the information is new or updated. What happens when your note contains some cloned data and some that are new? The answer is: Who knows? There certainly is no rule that says you need to modify data that hasn’t changed, simply to make it look different. Sometimes, things don’t change. But, if a payor thinks that something disingenuous is going on based on your billing profile, that can influence their perspective.
The most frustrating part about a denial based on allegations of cloning is that it doesn’t just refer to the entire progress note as a whole; it can refer to pieces of a progress note that are inaccurate. Those pieces could be integral to billing a distinct procedure, or a crucial element associated with an office visit code. If one or more pieces never, or almost never, change from one visit to the next, the auditor doesn’t know if the information really didn’t change or if it did change but just wasn’t edited. Lately, auditors seem to assume the latter.
“To avoid a denied claim due to suspected cloning, a very simple rule to bear in mind is this: Change what changes.”
To avoid a denied claim due to suspected cloning, a very simple rule to bear in mind is this: Change what changes. Your notes should always have an interval history of present illness (HPI). The history of the problem is what it is, but there is usually something unique to say about the patient’s status covering the span of time between the last appointment and the current one. Make a point to label that information “Interval HPI.” Don’t blend it in with the other history because that combination of new and old data sometimes doesn’t sit well together. You want unique documentation for each encounter, and it should stand out in your progress note.
Taking the Interval HPI concept one step further, understand that encounter-specific charting is king. With the E/M changes comes a flexibility that has not existed in many years. The rigidity of cookie-cutter, awkward-appearing templating is, from a billing standpoint, now inferior to an old-school, text paragraph or two. Everything has come around full circle. Less is more.
Defend Against Audits and Recoupments
“This is one reason why— when you document carefully and are confident your documentation is strong —it’s important to challenge unfavorable results.”
With the proper documentation protocols in place and routine self-audits, you increase the likelihood that your practice will be reimbursed for every penny it deserves. If you should face an unfavorable audit, your documentation will support your appeal. Let’s say an audit comes back claiming deficiencies. This may be the result of a reviewer who does not have sufficient background in the specialty or service being audited. We’ve seen many instances when the items cited are displayed in plain sight, but the reviewer wasn’t aware of the terminology, workflow, or purpose of the service. This is one reason why— when you document carefully and are confident your documentation is strong —it’s important to challenge unfavorable results.
Additionally, being profitable relies on keeping everything you have been paid. When you have ensured that your documentation process is thorough, we urge you to fight every overpayment demand. Payors thrive on practices who pay back money without asking questions for fear of being terminated from the provider’s network or being referred to state agencies. Never write out a check in response to an overpayment demand letter without consulting with legal counsel and a certified professional coder to ensure the audit was conducted properly.
The healthcare industry is one of the most highly regulated industries in the nation, with new regulations coming out seemingly every month. Maintaining your practice’s profitability amid changing expectations is a challenge, but, remember, one of the major factors impacting profitability is in your direct control: documentation.