problems with coding of physicians' services: medicare part b, Summaries of Medical Sciences

Download problems with coding of physicians' services: medicare part b and more Summaries Medical Sciences in PDF only on Docsity! . PROBLEMS WITH CODING OF PHYSICIANS’ SERVICES: MEDICARE PART B . OFFICE OF INSPECTOR GENERAL OFFICE OF ANALYSIS AND INSPECTIONS JANUARY 1989 PROBLEMS WITH CODING OF PHYSICIAN SERVICES: MEDICARE PART B Richard P. Kusserow INSPECTOR GENERAL OAI-04-88-00700 JANUARY 1989 .,. , TABLE OF CONTENTS EXECUTIVE SUMMARY INTRODUCTION ........................................................................................................1 Background ............................................................................................... 1 Purpose ..................................................................................................... 2 Methodology .............................................................................................. 3 FINDINGS There are wide variations in code usage ................................................. 4 Principal reason is differences in interpretation ................................... 4 Reimbursement is also a factor ............................................................... 7 RECOMMENDATIONS APPENDICES A. Data sources B. Carrier billing frequencies C. Request for HCFA guidance on coding “routine” visits D. HCFA advice on coding routine visits INTRODUCTION BACKGROUND Medicare is a federally funded program which provides health care to the elderly and disabled. It is administered by the Department of Health and Human Services,Health Care Financing Administration (HCFA). Servicescovered under Medicare are divided into two general areas. The frst, known as “Part A,” includes hospital servicesand supplies. The second,“Part B,” in­ cludes physicians’ servicesand “durable medical equipment” such as wheelchairs. This in­ spection deals with Part B. Reimbursement through Private Carriers Paymentsfor servicesor supplies covered under Part B are made through private insurance companies (“carriers”) under contract with HCFA. Each carrier hasresponsibility for process­ ing claims in a designatedgeographic area. The HCFA provides direction to the carriers on all payment matters. It is also responsible for assuring that carriers are adhering to program policies and proceduresgoverning payment. Procedure Codesfor Billing _ In the past, physicians and suppliers submitted bills to carriers using narrative descriptions or numeric codes to identify the servicesthey hadrendered. Many different coding systemswere used. Little similarity existed among the many methods used to bill Medicare. In 1983 HCFA required all carriers to adopt the HCFA Common ProceduresCoding System (HCPCS). The useof HCPCS was intended to bring about uniformity in defining and report­ ing medical services. This uniformity would enable HCFA to analyze Medicare services nationwide and would provide reliable information for Medicare policy making. Such analyseswere not possible under the former hodgepodgeof billing methods. Present Coding System .,’ Under HCPCS, physician servicesare describedthrough useof the American Medical Association’s Current Procedural Terminology (CPT). The CPT consistsof a seriesof five- digit codeseachrepresenting a particular service(procedure). When the procedureis a physician visit, the extent of the servicerenderedis also designatedby a procedure “level.” These levels take into consideration the wide variations in skill, effort, time, responsibility and medical knowledge required under different circumstances. The following table shows the code and corresponding level designations for “established patient office visits” (any visit after the first) and “subsequenthospital care” (daily visits in a hospital after the day of admission). Recentdata obtained from HCFA indicates that thesetwo servicestogether account for nearly 25 percentof the total number of servicesbilled, and 16 percent of the total payments made under Part B. CPT CODE AND CORRESPONDING LEVEL . OFFICE LEVEL 90030 Minimal 90040 Brief 90050 Limited 90060 Intermediate 90070 Extended 90080 Comprehensive Reimbursement Amounts HOSPITAL N/A 90240 90250 90260 90270 90280 Reimbursement ratesfor the various code levels are set by each carrier for its own area. Car­ riers establish their rates basedon “prevailing chargelocalities,” specific geographic areas where physicians’ chargesfor servicesare very similar. In most instances,the higher the level of service billed the higher the reimbursement. Uniformity Lacking The HCFA Part B Medicare Annual Data System (BMAD) provides calendar-yeardata by pro­ cedurecode for every procedureprocessedby eachcarrier for the year. Under a uniform coding system,one would expect to find similar billing patternsfrom carrier to carrier. Analysis of the 1984 BMAD, however, revealsthat patternsof billings for “establishedpatient office visits” and “subsequenthospital care” vary greatly. Not even a semblanceof the unifor­ mity sought under HCPCS is evident in the BMAD statistics. PURPOSE This inspection examines in detail the lack of uniformity in coding of claims in thesetwo high volume areas: physician office visits by establishedpatients, and physician visits to hospital­ ized patients. The inspection has three main objectives: 2 this level. These and similar comparisons show that differences in billing patternscannot be attributed to differences in the geographic location of Medicare patients. The nature of the coding problem was examined in interviews with HCFA and carrier staff. These interviews revealed that the principal reasonfor variations in billing patterns among car­ riers is the differences in interpretation of codes by both carriers and providers. (Providers of Medicare Part B servicesare physicians and suppliers of medical services.) When carriers first converted to HCPCS, HCFA permitted them considerableflexibility in translating the codes under their old systemsinto the new CPT codes. This flexibility led, for example, to some carriers converting an old 9004 (“routine fJllow-up office visit”) to the CPT code 90040 while others converted this code to CPT code 90050. Figure B Bills to Carriers for Subsequent Hospital Care (1986) Percent of Total (Freauencv) 90260 90260 90270 90280 HCPCS Code m Low Carrier m High Carrier -A- Average No National Policy on Coding “‘Routine” Visits Variations in how carriers converted their old coding systemsinto the new are most evident in the differences in what CPT codesthey choseto designatethe “routine” level for office and hospital visits. “Routine” is defined as the service a physician would normally be expectedto render most often. These differences for routine visits were noted severalyears ago by HCFA’s Region VI office in Dallas. Regional staff requestedclarification from the HCFA central office (appendix C). The HCFA’s response(appendix D) statesthat the 90050 and 90250 (limited) levels of office and hospital visits are the “most correct” codesto designateroutine services. The responsefur­ ther statesthat it is possible that some carriers, basedon reimbursement considerations,may have designatedboth the “brief’ and “limited” levels asroutine. While this is not the preferred method, HCFA apparently considersit acceptable. According to HCFA staff, levels higher than the Limited level would not be correct. With the exception of Dallas, HCFA hasnot com­ municated this position to any of its other nine regional offrces. As illustrated by the following charts,carriers continue to consider a number of different codes,or combinations of codes,asroutine. Only about half of the carriers indicated they would use the 90050 or 90250 code which HCFA considersto be “most correct”: Carrier Respondent Opinions Figure C ‘Routlne’ Offko Welt* ““““““““““the=HoaplW Vklt* %r Z0 Lack of uniformity in the coding of routine servicescausesproviders to lose confidence in both the carriers and the Medicare program. The absenceof a national policy on the ap­ propriate code to designatethe routine level also increasescarriers’ difficulties in dealing with individual providers on coding problems. Too Many Co&s Are Available Many carrier staff statethat in their opinion physicians are often confused by the large number of CPT codesavailable to describeoffice and hospital visits (six and five respectively). Addi­ tionally, many respondentsperceive a lack of meaningful distinction among the various CFT coding levels, particularly the “brief’ and “limited” levels. This appearsto be a major factor in accounting for differences in interpretation of “routine” and other visit codes. Under most of the carriers’ previous coding systems,there were fewer codesthan under the presentCPT system. Some of theseformer systemshad codestermed “routine” for office and hospital visits. Carrier respondentsindicate that many physicians preferred to usethesecodes almost exclusively rather than having to chosethe “correct” code from among several. Many believe that physicians still prefer this manner of billing. 6 In consideration of thesepoints, respondentsrepresenting70 percent of the Medicare carriers feel that the number of codesfor office and hospital visits should be reduced. REIMBURSEMENT IS ALSO A FACTOR While differences in interpretation of codesby carriers and providers accountfor most of the variations in coding of office and hospital visits, other factors also contribute. Many carrier staff indicate that a number of physicians may seekto maximize reimbursement by billing a higher level code than appropriate for the servicerendered. In numerouscases, this was substantiatedby carriers’ findings in postpayment review of physicians’ claims. Several carriers suggestedthat this problem may be accelerating as Congressimposes measures,such as fee freezes,to control spiraling Medicare outlays. Carriers also point out that the coding selection processwhich is usedin the physician’s office frequently includes consideration of the amount the carrier will reimburse for a billed service. Although code selection should be basedsolely on the type of servicerendered,those who prepare the bills often match the physician’s normal charge for an office or hospital visit to the code which pays the sameamount, and bill accordingly. The attitude expressedby severalcarrier representatives,including one medical director, sup- plied another example of the influence of reimbursement factors on coding. These persons noted that if physicians consistently bill just one code for establishedpatient office visits and one for subsequenthospital care, over time the reimbursement “highs and lows will balance out.” One of the larger carriers explained that they urge physicians to usethe appropriate codes,but they routinely acceptthe intermediate level code (90260) for daily hospital visits throughout the hospital stay. Carrier representativesacknowledge that the patient should be improving the closer he comes to the day of discharge. Thus, he should not require the more extensive servicesrepresentedby code 90260 at the end of his stay. However, the carrier reasonsthat reimbursement is about the sameusing code 90260 for each day as it would be using the higher level codes at the beginning of the stay and the lower codestoward the end. Other Factors Coirtribute to the Problem Still other factors which could lead to variations in coding were mentioned by carrier person­ nel: . Physicians may be reluctant to use the current CPT codesdescribing “brief’ or “limited” visits out of concern that theseterms imply inferior service. . Many specialists believe they should bill the higher level codesbecausethey are specialists, regardlessof the actual servicerendered. 7 Define “routine” Level Findings: There are large variations in usageof CPT codesfor “establishedpatient office visits” and “subsequenthospital care.” These variations are most evident where the “routine” level of service is being billed under a number of different codes. The HCFA hasdesignated the codesit believes “most correct” for routine servicesbut hasnot promulgated this informa­ tion nationally. Recommendation: The HCFA should inform all carriers and providers of the codesit con­ siders “most correct” for routine office and hospital visits and then assureits instructions are applied consistently. Impact: Consistency of interpretation from carrier to carrier will improve the credibility of the coding system. Consistency will also strengthencarriers’ positions in dealing with coding problems with individual providers. Further, it will allow HCFA to better usepayment data by visit codesfor trend analysis and policy making in such areasas fee schedules. HCFA Comments: The HCFA agreeswith this recommendation. A HCFA representative recently met with an AMA Ad Hoc Committee on Visits and Levels of Service. The meeting focused on the need for uniform understandingsby Medicare carriers and the physician com­ munity regarding what codesdescribe “routine” visits and consultations, as well as how codes should be used by physicians in the various specialty fields. Consult with AMA on Other Changes Findings: Carriers report that some physicians may be reluctant to code their claims at the CPT levels termed “minimal,” “brief’ and “limited” due to the negative implications of these terms. Respondentsalso point out that the presentformat of the CPT book makesit incon­ venient to associatethe description of the levdl of servicewith the corresponding code. Recommendation: The HCFA should discusswith AMA changing the terminology usedto describe servicesso as to neutralize its effect on coding choice. Easier associationof code level with the codes, at least for higher volume areassuchasphysician visits, should also be discussedwith AMA. Impact: Thesechangeswould eliminate two factors which appearto inappropriately bias the code-selectionprocess. HCFA Comments: The HCFA agreeswith the recommendation. At the recent meeting be- tween a HCFA representativeand the AMA Ad Hoc Committee on Visits and Levels of Ser­ vice, the need to avoid terminology that hasnegative connotations in the narrative descriptions of certain codeswas discussed. rn Educate Providers on Proper Coding Findings: Carriers report that physician specialistsoften feel they should bill the higher level CPT codes simply becausethey are specialists. Some physicians believe the more time they spendwith a patient the higher the code level they should bill. The current CFT system al­ ready takes into consideration the time and level of skill neededto perform various levels of services.These should not be factored in again by the physician. Recommend&ion: The HCFA, along with the carriers, should better inform physicians of HCFA’s interpretation of proper use of CPT codes. Impact: Better physician understanding of the CPT system will help to reduce inappropriate coding of services. HCFA Comments: The HCFA agreeswith the recommendation. This concern was also dis­ cussedat the recent meeting between a HCFA representativeand the AMA Ad Hoc Committee on Visits and Levels of Service. 11 -. li ‘. : . APPENDIX A Data Sources Part B Medicare Annual Data (BMAD), ProceduresFile, 1984,1985, and 1986 Carrier Annual Management Reports asSubmitted to HCFA AMA’s Physicians’ Current Procedural Terminology (4th edition), 1984-1988 Physician Payment Review Commission’s I988 Report. to Congress HCFA Common ProceduresCoding System, Conversion/Implementation Manual and User Guide Office of Technology Assessmentreport: Paymentfor Physician Services (1986) Various HCFA/Carrier policy memorandaand guidelines -- .- . . -- . .* . -' - CnRuCR mmB= . . . . ~oos10 BLUR MELD-RL . . . oos2u BLUE SHIEUI-nR i.. .'i :3 W BLUE SnIELo-flR CLM :.‘. ;.-;I aoS42 BLUE snxao-cn CRORTWCRNS .. ..‘> - oosf4’BLuLsnxan-co :. . . ‘-2 7.: oos70 ‘BLUE sbtxaa-m coo moos80 BLUE SHIM-m COQ ,. -_. oos90 BLUE snfao-FL oob21 IlEnLm cnR(I SER.-IL . : ‘-. .‘- ‘F”u4 BLUL snxM-x:w -0ou0 BLuLsnxaa-1n . 0064s mu0 SnxaD-NC . OObSO BLUE SWIELD-KS . .* oo6bo BLUO snI~'D-Kv oobw ,BLuc SUELD-no 2. . . --.: oo700 BLuf snxao-nn B 00710 BLUE Snfao-KI . ; :.: 00720 UUZ SHIM-RN - . 8 00740 BLUL snxtls-no <Km 007s; BLUE SUELO-nr . .- 00780 'BLUE SnrhD-nn <m.un 00801 BLUL SHXRO-KV (YLSTERn, 00803 LnPtRL BLUR SKIIIEto CKVU - . 00920 BLUE SHIUO-NO&U 008bS BLULSIURO--CR . ’ ‘- 00870 BLIE SHXELD-RI 0088Q BCUL Sn1aD--JC 00¶00 BLUC SnXELO-TX oa¶lO RuJL SKIELD-ur-..: OoYao .'un nn. SER. .., . . oo¶sx ?lw. SER.441 OO¶TJ ?UCm RICO-BS is OlOZU RETWR-fIK z . . . ol2¶0 nETmu olabo nLrm-Hn *. OIltO RLTNR-9K .g . .i .. . I.’ 01380 RtTWO-OR .-m. 02OSO tRANSWERICR-CR 8; -‘. 02 ‘r: ig ._..._* . 04” . 10240 TRfWRLERS-IW 10250 ~AUELERS-!‘I$ 10430 tRnuaas4m 11260 OLN. (m. UFC.-KO l3110 l RUORKTIRL-OR g 3 ;- . . . : I- . . . -t. ma10 ?RuOcNTxh-w la340 l uOlmTXnL-NC OS -,. Jf _ L4330 owr --NY fbsba r4nrromxor: 084 l~sld~NnrrrxoNutoe YU E OS _ .-. tuoo BLUE Snxan-nL z 01 *’ 02 10 00’ $26.17 m.61 . . .i APPENDIX C Request for HCFA Guidance on Coding “‘Routine” visits C -- -- -- . . . . - - . . - Q .. l ‘4 C. . . , . . . . . l . _ . . . . . . *. -. . . . . . _ ‘. c . . . - l .’ l - . . . : - - ; . . . . .. . -y R-ifct to: DPOIRbcf&. . . : -.-7-y . _ b .- . . . .’ . . .*.*” * . * UR-Pp - . . -. :‘ - . . . - . l i Health Care Pinmcin$ Addhtrath . . .. . ‘. . :IRqion V’I.~&ks&t+. .’ . . ;-. : .. . .. - i . . . . . . - . . - . . ;: . . .” . . . -5:. . . ‘.Wi*‘. . - _. .- .‘..-.; . . i . . . .. .* . . - . ..“.. . . - . “.: ;tHCPCS kplemcntation a@$aymcrk U+kation Review for Upcodiig. .. . . - . -t’. . . - :*.. . -. ..*. .. . .1. .. :** .,:.;.. ?. .:. . : ‘...’-.*.-; ...$.- --:-. . . :: :. ;. .. . . . ?: ‘C. : . . ‘. -tip NaAon, &&-, l * . .: r : * , . . . hmof Heal& St&&-&d Qua& ’ - :-.‘.’ - ‘-.:-- - . . . . ... .’ . ...- >. .- * .‘i . -.*’. . p...; . . . - . . * *l .-L . -,, . .. ., . . - . . _. . - :. . . - . j . . : ..* . . -... - i;.. .a ,‘-i ; .- .*., 0. :’ .I. : .’ -.;.,f’ -;:y,. . .-- - a. . . . . . . . . . :.:-.. . . . .. .-*-.*.: .- e-.­. . . . .- . . . : . : * . - ‘&r-to thi hplem&aiiob air *HCPC& we look& bn codc;‘SOtiS (&r&e follow- ..-: : *:,:I; . offh limit) and 9024 butinc hospital visit) as thi codes for officc.and hospital vl& ‘-. _ .y.. . . seMcu we wouid normally expect a physician tu provide most of the tima If, in :’ “. .,;,. :. . reviewing a physi+n *oughipostpayment utilization review,: W; found a phyJidan -_ . . .-:_ ; - . . who was biIhg the Medicare. program for a substantially ku cr number of higkr . ievd service (e.g., 9005) than the routine mice b., 9CO4f , we considered the * : -5’ ‘:. -’ phydciads practkt’ as being 8 Potential %pcodhqn situation. However, with the . . . implementation of HCPCS, we &c now uncertain u to what the routine office and ‘.. ~hospital visit codes are.. (For example: Would the-routine office visit code-now ’ (under’ HCE!CS bi 90040, 90050, or wouhi it depend on what the CRIB to HCPCS code.priciqg conversion was? If the latter, what would be considered- ihe routhe , cock for-an offke visit if the CRYS. 9004 charge data wasascd to price both-the .* . - . * -.’ 30040-ancf’900~0 HCFCS co&s?) - *.- -.‘- .. i .‘,. -..t::. ::..‘- : -‘.;z - .J.-. . :y:..: : -.’ o . ’ :.,.. ./ .t ‘.“.,e . . . .. .. - . . . . . . _- - . . ..-.. ‘. . .’ .‘s&- ‘;he &&;m&~*& &l*k&S, auf &ti~ a & w&fs’ ir;’ & r&i b * .:‘.l . ‘. been thqt H&CS codes 90040 and 90240 are to be considered the routine office visit 1- -. . . . and hospftaL+islt codes, respec%ivcIy, for up&ding consideration. We have taken this ..: ’ --. - some cases allowingaphysidan who wiFmsing:9004/?024 h the::. . - * past as his routine cdd&.tp usi’ 9OOSOl9OZSO * position because .iF1, now under HCXS witl msuftin a higher - :” - - . - Medic&e allowan~~;“E&insance;~ .wiii ii&w if. fhe carrier used 9004 to price :.-!z L =’ . . 90040 and. 9005 6to l prlci ‘90050.. However,.‘we have recentlye s&en 44cdlcat~ 2. Fw . newtlctteti that Prudenthi and. General American ‘Life have sent out to th& 4 * * physician cammt&tks tit&h indkatt that they ate considering 90050 and 902SG-as. . -. -.T.. the routine codes. ‘(Copies of these ncwskttcrt arc attxhcd for your reference.) Wc.: . - ._. arc sure that .Prudcntiaf and.Geneal American Life. took their positions based on‘the . . ‘. Cm-4 d&&ion of Timltcd lcveiof service? which does seem to.support the uic of me : *-.- 90050 and 9025Oxs rout& service cadet, . ; -. ’ :. . . . . . . . . .. w . . :. . . . m We would a&eciate”keivinn, your comments iis to which HCPCS codes ;houid be considered the routfne codes for postpayment upcoding review! ou~oses. TVc plan to . - . hold a utilization review work group meeting for OUf qZ?rkrS lh Lhc near future and L therefore would appreciate receiving your responseby $ay 15, 1%?5J . . . .-_-. .- . u wc CM p&idc vou with anv additional information on this matter, please contact John Delaney at . F@ 7294441: : .- . . : . ;-‘. . . . - -. . . . . . .. - . . * . .” .. -... . - .. . . . . .. .: hL J. Christenberry . -. : * Pronram Erector * ... . . . . . . . . . . -PO&~ and. :. . . .. .- - .w . .. _-