E&M Utilization Analysis. Frank Cohen, MBB, MPA, Director, Analytics Doctors Management LLC, Knoxville, Tenn.
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1 E&M Utilization Analysis Frank Cohen, MBB, MPA, Director, Analytics Doctors Management LLC, Knoxville, Tenn. Frank Cohen does not have a financial conflict to report at this time. 1
2 Learning Objectives Identify the importance of E&M utilization Evaluate comparative E&M databases and statistics Examine how to normalize the CMS database Facts About E/M Utilization E&M services refer to diagnostic/therapeutic management of the patient furnished by healthcare providers E&M Codes account for approximately: 1% of all procedure codes, 18% of frequency reported to Medicare and 28.4% of payments In the 2017 National Physician Fee Schedule Database, there are 14,489 unique procedure codes 160 unique E&M codes $29 billion of $102 billion in total payments 2
3 Specific Coding Guidelines E&M code levels and rules were influenced by the RBRVS E&M coding is driven by specific guidelines 1995 or 1997 E&M coding is guided by one of three major criteria: Key components (i.e., office and hospital visits) Time (critical care, counseling, discharge, etc.) Age (preventive medicine) Medical Necessity Key Components History of Present Illness (HPI) Chief Complaint (CC) Review of Systems (ROS) Past, Family, and/or Social History (PFSH) Examination Problem focused Expanded problem focused Detailed Comprehensive Medical Decision Making Straightforward Low complexity Moderate complexity High complexity 3
4 Key Component Requirements New visits Requires all three key components to be present Codes based on specific algorithm Established visits Requires two of the three key components to be present Codes based on specific algorithm Overall, over 1,500 decision points go into deciding which E&M code to report for a given visit Top E&M Categories New Office Visits Established Office Visits Outpatient Observation New Hospital Visits Established Hospital Visits Inpatient Observation Discharge Days Outpatient Consults New Inpatient Consults Emergency Department Services Nursing Home Visits
5 Modeling the Data Analyzed based upon utilization by category and subcategory Comparisons are specialty-specific Comparisons are done on national, state, locality and intraorganizational Improper utilization can result is severe financial, civil and criminal penalties CMS Fraud Prevention Strategies CMS Report to Congress; Fraud Prevention System Second Implementation Year, June
6 The CERT Review process CERT randomly selects a sample of claims submitted to Carriers, FIs, and MACs during each reporting period. Request medical records from the health care providers that submitted the claims in the sample. Review the claims in the sample and the associated medical records to see if the claims complied with Medicare coverage, coding, and billing rules, and, if not, assigning errors to the claims. Where medical records were not submitted by the provider, classifying the case as a no documentation claim and counting it as an error. Sending providers overpayment letters/notices or making adjustments for claims that were overpaid or underpaid. Interested Parties RAC Recovery Audit Contractor (including Medicaid) ZPIC Zone Program Integrity Contractor MIC Medicaid Integrity Contractor MAC Medicare Administrative Carrier PSC Program Safeguard Contractor (MIP) OIG Office of the Inspector General DOJ Department of Justice Private payers, as well
7 2017 Improper Payment Rates Types of Errors Reported No documentation the provider fails to respond to repeated attempts to obtain the medial records in support of the claim. Insufficient documentation the medical documentation submitted does not include pertinent patient facts (e.g. the patient s overall condition, diagnosis, and extent of services performed). Medically unnecessary service claim review staff identify enough documentation in the medical records submitted to make an informed decision that the services billed were not medically necessary based on Medicare coverage policies. Incorrect coding providers submit medical documentation that support a lower or higher code than the code submitted. Other Represents claims that do not fit into any of the other categories (e.g. service not rendered, duplicate payment error, not covered or unallowable service). 7
8 2015 National Improper Payment Rates by Error Category National Improper Payment Rates by Error Category
9 Service-Specific Overpayment Rates Type of Services with Up-coding Errors Up-coding refers to billing a higher level service or a service with a higher payment than is supported by the medical record documentation
10 Impact of 1-Level E&M Table K4 provides information on the impact of one-level disagreement between Part B MACs and providers when coding E&M services Service-Specific Underpayment Rates
11 Importance of CERT to Auditors Intra-Category Analysis Analytical Models Compares utilization of codes within a specific category or subcategory to control group Inter-Category Analysis Compares utilization of related E&M Code categories and sub categories Global Category Analysis Compares utilization of E&M category as a percent of all E&M codes All comparisons must be specialty-specific
12 Data Requirements Provider productivity report (most recent 12 months) Aggregate for single provider or global analysis Segregated for more in-depth analysis By provider and/or location and/or department Separate out the E/M codes Those requiring key components plus discharge days Comparison/Benchmark Data Part B National Summary Data File Provider/Supplier Procedural Summary File Commercially available Intra-Category Analysis Compares utilization of codes within a specific category or sub-category to control group and includes calculations for: Resource Differential Calculates average RVU per category Quantifies under or over coding as relationship to control group Acuity Adjusted Charge Differential Financial analysis of over and under coding compared to complexity of procedures reported
13 E/M Intra-category Calculations Table 1 - New Office Visits Current Current Current Current Total Practice National Variance Practice v. Redistributed Code Frequency RVU RVUs Dist. % Dist. % Control Frequency Redist RVUs RVU Differential % 0.71% 24.95% % 5.63% % (20.82) % 28.49% % (159.66) % 44.42% 45.78% % 20.76% 31.58% Totals 227 1, % Table 2 - Established Office Visits New Office Visits Current Variance Current Current Current Current / Current Current Total Practice Current National Practice Variance v. Redistributed ReDist Redist Code Frequency Annual RVU calculated RVUs Gross Dist. Practice % Dist. National % Control Practice v. Frequency Annual Redist Gross RVUs RVU Charge Differential Code Frequency 93 Fee 0.58 Charges Dist. 2.12% % Dist. 4.34% % National % Frequency 190 Charges Differential (56.53) $ % 0.43% 3.85% 2.07% % % $1,325 (102.47) $1, , , $6, % 5.49% 44.58% 10.84% 77.83% % 1, , $12,510 3, $6, , $103, % 60.21% 42.14% 30.08% % % 1, , $51,910 (3,564.17) ($51,986) $73, % 29.85% 5.09% 34.78% % % $85,563 $12,135 (738.50) Totals , , $12, % 4.03% 22.24% % 4, , $69,749 (1,307.21) $57,106 Totals 1,166 $196, % % 1,166 $221,057 $24, Record frequency and current RVU ($) value 2. Multiply to calculated total RVUs ($) 3. Create frequency distribution calculation 4. Compare to national distribution 5. Calculate difference (variance) 6. Redistribute the frequency 7. Calculate differences 8. Positive tends towards under-utilization comparison while negative trends towards over-utilization comparison
14 Control Analysis and RVU Exposure Simultaneous Analysis of Utilization
15 The Devil is in the Details Spike Analysis Spiking on any E&M code within a category can draw attention To determine if a code meets spike criteria: Reported more than 66% of the time for a given category Exceeds 50% variance when compared to peers
16 Inter-Category Utilization Compares utilization ratios of related categories Level of office visits to consults Calculated by dividing total frequency for one category by total frequency for another category Total Established Office Visits = 2,505 Total New Office Visits = 563 EOV to NOV ratio = 4.45 to 1 Values are compared to national averages by specialty National average = 3.0 Variance = 50% ((4.5/3.0) 1) * 100 Means that the practice s ratio is 50% higher than peers Example: Inter-Category Utilization Measuring category relationships to total E/M visits helps to create a vector analysis of sorts to pinpoint issues
17 -79.20% % % % 0.00% 21.22% 41.12% 38.90% 91.88% Graphing Inter-Category Variances INTER-CATEGORY VARIANCE Global Category Comparisons Compares utilization of each category and/or subcategory against national averages Allows a three-dimensional look at utilization More accurate determination of potential utilization problems More efficient use of resources to both identify and treat utilization anomalies
18 Global Category Calculations Requires calculation of ALL E/M visits Includes those not compared here Requires calculation of ALL procedures Normally restricted to those with RVU values Category total is divided by total for all procedures Total new office visits = 563 Total all procedures = 12,344 Ratio of NOV to all procedures = 4.56% Comparisons are made by specialty for national ave. National average = 3.32% Variance = 37.35% ((4.56/3.32) 1) * 100 Means that practice reports NOV as percent of all 37.35% higher than peer groups Example: Global Category Analysis Measurement of ratios assists the practice in identifying areas of potential misuse and abuse of specific coding categories and subcategories
19 Graphing Global Category Variances E&M as an RVU Risk
20 E&M Codes and Time 1. Most procedure codes with a work RVU have an assessed time 2. Time is reported in minutes 3. Time can be aggregated to estimate work effort 4. Assessed time in excess of 2.5 time FMV (5,000 hours) is considered excessive by OIG and subject to audit E&M Can Drive Time Risk
21 The Moral of the Story? Properly coding E&M services is critical for the normal operation and management of most every medical practice Understanding E&M code utilization and being able to apply that to both financial planning and compliance risk is critical to keeping the money you worked so hard to earn Continuing Education ACMPE credit for medical practice executives.. 1 ACHE credit for medical practice executives.. 1 CME AMA PRA Category 1 Credits... 1 *CPE credit for certified public accountants (CPAs) CEU credit for generic continuing education.. 1 *CPE CODE: E M Let the speakers know what you thought! Evaluations will be ed to you daily MGMA. All rights reserved
22 Thank You. Frank Cohen Doctors Management LLC Kingston Pike Knoxville, TN MGMA.ORG 22
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