In September 2014, the U.S. Dept. of Health and Human Services’ Office of the Inspector General (OIG) published its audit of Tulare Regional Medical Center, an acute care hospital in California. In its findings, federal investigators determined the “hospital did not comply with Medicare billing requirements for all 10 of the outpatient surgery claims we reviewed, resulting in an overpayment of $178,647,” according to the final OIG report.
As a result of the coding mistakes, the Central Valley hospital gave back the $180,000 to Medicare, public filings show, and paid an undisclosed amount to internally address the underlying revenue cycle management issues that caused the problem. And Tulare’s woes are hardly unique among outpatient providers. Previous OIG investigations during the past decade have uncovered widespread coding compliance issues in outpatient surgery facilities across the United States. In fact, in a 2010 OIG report focusing only on ambulatory surgery center (ASC) services for skilled nursing facility (SNF) patients, federal auditors estimated that “Medicare contractors nationwide made at least $6.6 million in overpayments to ASCs for services subject to consolidated billing.”
“ASCs were either unaware of or did not fully understand consolidated billing requirements,” the OIG concluded in its report on SNFs. “In some instances, ASC officials stated that they were unaware that the exclusion of certain intensive hospital outpatient procedures from consolidated billing requirements…does not apply if the services are performed in ASCs.”
With highly complex rules and requirements seemingly changing by the day, a widespread lack of awareness about coding compliance is a continual challenge for many ASCs. As referenced in the OIG’s report, it’s often a simple lack of education; other times, it’s having the right systems and processes in place to ensure a center is following the rules. Regardless, the penalties can be severe: Depending on the payer, ASCs risk claims denials, audits, fines, exclusion from federal payer programs and even prison time for failing to follow compliant coding practices at their facilities.
Best practices: compliant coding
“Trust, but verify.”
President Ronald Reagan’s famous quote is the guiding principle of compliant coding: No matter what’s listed in the superbill or chargemaster, all bills should be checked against the operative note to guarantee 100 percent compliance. In the event of a payer audit, any procedure not documented in the operative notes cannot be supported or submitted for reimbursement.
Unbundling, or breaking down procedure codes into individual codes, also is a red flag for payers. For example, facilities frequently overuse Modifier 59, which the U.S. Centers for Medicare and Medicaid Services (CMS) advises should be “used to identify procedures/services, other than E/M services, that are not normally reported together, but are appropriate under the circumstances.”
“Documentation must support a different session, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same individual,” CMS states.
Upcoding, or listing procedure codes not performed or documented, also can land a provider in hot water. Just remember: If it's not documented, it's not billed. In cases where there is no specific code for a procedure, an unlisted procedure code from that body system should be reported, and the appropriate documentation should be provided. Be familiar with your payer guidelines when reporting unlisted codes and the supporting documentation they would like submitted with the claim.
Both Medicare and private payers have ramped up their scrutiny of ASC-based coding in recent years. At the same time, more and more difficult procedures are being performed in an outpatient setting, which has created industry-wide inconsistencies and uncertainty.
In its 2016 Work Plan, the U.S. Dept. of Health and Human Services’ OIG announced it was looking into a variety of ASC-related issues, including payment methodology, ICD-10 implementation and anesthesia service coding, specifically related to whether a physician or an advanced-practice nurse administered the anesthesia, which affects reimbursement.
Cost-cutting measures also are forcing payers to look more closely at coding than perhaps they may have in the past. If issues arise, payers often deny a claim and may request an audit if they suspect widespread errors or abuse. While denials can be disruptive and hurt a facility’s cash flow, Medicare’s penalties are numerous and decidedly harsher than those handed down by insurance companies.
“OIG also conducts investigations involving organized criminal activity, including medical identity theft and fraudulent medical schemes established for the sole purpose of stealing Medicare dollars,” the OIG’s 2016 work plan states. “Investigators are seeing an increase in individuals, including both health care providers and patients, engaging in these health care fraud schemes. Those who participate in these schemes may face heavy fines, jail time, and exclusion from participating in federal health care programs.”
Running afoul of coding rules, however, is not a foregone conclusion. Implementing best practices and fostering a collaborative work environment can eliminate many coding compliance risks. For example, if documentation is unclear, or there’s something missing in the operative report, the physician should be consulted for confirmation. At times, the physician may need to provide an addendum to the operative note before the case is coded and appropriately billed.
This team-based approach also will help facilities position themselves to address coding compliance issues that inevitably will rise in the coming years. While its 2017 Work Plan was unavailable as of this publication’s deadline, the OIG did indicate in a mid-year update that it expects to issue guidance in the new year on one issue of particular importance to ASC billing and coding operations: ICD-10.
“We will review aspects of CMS’s management of the implementation of the 10th version of the International Classification of Diseases (ICD-10) codes in Medicare Parts A and B,” the OIG wrote in April 2016. “This may include reviewing CMS’ and its contractors’ (e.g., MACs) assistance and guidance to hospitals and physicians and assessing how the transition to ICD-10 is affecting claims processing, including claims resubmissions, appeals, and medical reviews.”