Chart Reviews Are Good Medicine They Can Help Assure That a Practice Is Compliant and Maximizing Revenue

Doctors get paid based on the level of service performed, if they contract on a fee-for-service basis, which most practices in the Northeast do. The selection of the right CPT code for the level of service rendered and documented forms the foundation of the revenue stream for a medical practice.

Doctors are also evaluated based on the frequency of certain levels of service billed. This can determine whether an individual is at higher risk for a federal, state, or private payer compliance audit. For doctors compensated on a productivity basis it also has a direct relationship to their paycheck.

The Office of Inspector General (OIG), private payers, and medical consultants recommend a comprehensive chart review be performed at least once annually. Here’s why:

1. Doctors who overcode put themselves and their associates in group practice at risk for civil and criminal penalties, repayment of amounts overcharged, withholds from future payments, and exclusion from future participation in insurance plans.

2. Doctors who undercode may also be increasing the chances of a compliance audit but are most assuredly leaving money on the table that affects not only their financial well-being but that of the practice as a whole.

3. Every year there are hundreds of changes to the CPT codes that doctors may not be aware of and, accordingly, are increasing claims denials and/or are otherwise shortchanging themselves.

4. Doctors may be billing inappropriately because they are not aware of changing rules and the proper use of modifiers. Examples are scheduled preventive visits that end up being sick visits or consults that are coded as new or established patient visits.

5. In multiple procedure billing, failure to place the most significant (and higher paying) procedure first with the correct diagnosis can result in much lower reimbursement.

6. Doctors may be failing to document accurately and completely, including history and physical, review of systems, length of time and decision-making.

7. Patient documentation may not clearly indicate all relevant diagnoses.

8. Doctors often fail to bill for all services provided.

9. There are special rules for billing the services of non-physician providers and documentation may indicate the need for training in this area.

10. Chart reviews are an integral part of a practice-compliance plan. Correct coding is a legal responsibility that doctors cannot delegate.

Identifying Outliers

Prior to beginning a chart review, it is a good idea to perform a utilization analysis of each provider. This entails comparing the frequency of each E & M code against a database of physicians nationwide within your specialty. There is inexpensive software available with a database from MBMA or Part B News, or you can ask a health care consultant to perform this. This will chart out and generate a bell curve comparison by CPT code of each provider’s frequency of code levels with that of his/her industry peers and associates within the group practice. It will indicate whether the provider’s coding pattern is substantially different.

These inconsistencies would warrant particular attention of the reviewer because they may also be appearing on the radar screen of CMS and other payers.

Selecting a Reviewer

At least initially, you should select an outside certified professional coder (CPC) to perform the review. If you have an accountant with a specialty in health care or an experienced health care attorney, they can refer you to a good CPC they have had experience with. Other sources are your state MGMA chapter and the American Academy of Professional Coders. Ask for credentials and references.

Some larger practices have CPCs on staff. This can be helpful if they keep up their credentials and continuing education. Unfortunately, many times in-house coders fall behind on current procedural terminology and become relegated to glorified billers. If you have a certified coder in-house it is still a good idea to hire an independent CPC occasionally and for the in-house coder to participate in the process.

What is Involved?

A chart review may be prospective or retrospective. A prospective review involves billings that have not yet been submitted as opposed to a retrospective review of adjudicated claims. A reviewer will typically select 10 charts per provider.

The reviewer will write a report upon each provider commenting on whether, in the reviewer’s judgment, the chart documentation supports the diagnosis, CPT code, level of service billed, and medical necessity. It may also indicate whether there were services documented that were not billed, and whether modifiers were appropriately utilized. The reviewer will also make recommendations for the provider and the practice as a whole.

It is generally a good idea for the reviewer to make a presentation to a designated committee or the group as a whole. This may be followed up with a general education session (extra charge) and, for those providers needing additional help, one-on-one training sessions.

If the review is retrospective you may want to engage the reviewer through your legal counsel to invoke the client-attorney privilege.

What Does it Cost?

The cost of the basic chart review, report and presentation of findings and recommendations may cost in the range of $750 to $1,000 per provider. A general education session may cost $1,500 to $2,000 and individual training around $750. The cost is hardly worth thinking twice about when you consider the benefits and payback. Coding specialties we have worked with rarely, if ever, fail to come up with findings and recommendations worth several times the cost of the engagement.
Independent chart reviews can have additional benefits which are hard to dollarize, especially if the review is done onsite. While onsite the reviewer has the opportunity to observe and converse with support personnel and can readily ascertain if they are up-to-date on coding issues. The reviewer may also observe reception, registration, scheduling, billing, and collection practices that could be improved and often notice compliance problems that are easily overlooked in the day-to-day operations.

Conclusions

Annual chart reviews are a necessity to assuring that your practice is compliant and maximizing revenue for the services rendered.

The costs associated with chart reviews should be budgeted annually as a reasonable and necessary business expense. They can keep you out of trouble and yield valuable returns.

James B. Calnan, CPA is partner-in-charge of the Health Care Services Division of Meyers Brothers Kalicka, P.C., Holyoke, MA Certified Public Accountants and Business Consultants; (413) 536-8510

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