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Help Survive Audits by Ditching One Common Medical Billing Error

Health Insurance Companies Process 1 in 5 Claims Wrong

The Crucial Lesson Physicians can Learn from Their Peers

Is your medical practice guilty of the most common billing error, upcoding patient visits? That is, are you coding – and thereby billing – at a higher level of service than your documentation supports?   While it’s a simple question on the surface, it certainly requires a complex mix of research, comparisons, and data analysis to truly answer. But there’s an easy way to evaluate how widespread this common practice is in your own medical billing office.

Accurate Coding…All the Time?

In a perfect world, you’d code your patients’ accounts accurately 100% of the time. And by accurately, that means you’d always assign:   Appropriate E/M service levels for office visits of both new and established patients. Highest procedure codes possible as long as the chart documentation backed it up. Modifiers as needed. And you would never, ever, ever bill for services that were either:

Not performed


Weren’t sufficiently documented in the patient’s chart

That all seems obvious when put in black and white though, doesn’t it? But it’s a whole other ballgame when you’re in the trenches, coding dozens – if not hundreds – of charts per day. So if 100% accuracy is unobtainable, what should you realistically aim for?

Don’t Always Aim High

Well, for starters, you shouldn’t aim – or bill – high all of the time. Upcoding has been an issue for years, but it’s become more openly discussed recently given the rise in billing scrutiny. Previously, many medical billing offices didn’t take such a thorough, methodical approach to their coding and billing – their procedures for assigning codes were much less formal and consistent.   In 2010, the Office of Inspector General (OIG) found the following as it relates to improper coding of E/M claims received by Medicare that year:

  • More than 50% of office visits weren’t coded correctly and/or were missing supporting documentation.
  • 1 in 4 claims were upcoded.
  • More than 1 in 10 claims had insufficient documentation.

And the most devastating statistic:

  • Essentially 1 in every 2 claims had some sort of billing error.

It seems that even a few years down the road, in 2012, upcoding was still a major occurrence. ProPublica, a non-profit corporation that focuses on investigative journalism, published an article recently about this trend.   They analyzed data from 329,500 practitioners who billed at least 100 established patient E/M visits to Medicare in 2012. And their findings were astounding:

  • 1,800 providers billed at the top level of service at least 90% of the time.
  • A Florida-based urgent care physician billed a Level 5 E/M service for all of his established patients’ visits in 2012 – to the tune of 2,376 visits.
  • A Michigan-based OBGYN charged the highest level of care for nearly all of his Medicare patients, at an astounding rate of 8 visits per patient that year.

And this is arguably the most important takeaway from ProPublica’s article:

…while most providers had a tiny percentage of level 5 cases, more than 1,200 billed exclusively at the highest level. Another 600 did it more than 90 percent of the time. About 20,000 health professionals billed only at levels 4 or 5.

Claims have been made that these 1,800 top-billing physicians simply took on more complex patient loads because others practitioners turned them away. Thus, they needed to bill at a higher level more often than not.   In reality though, what is the likelihood that virtually ALL of a physician’s patients would require billing at the highest-priced, most complex office visit?

Even CMS weighed in by saying, “it would be highly unusual for a provider to knowingly use the highest E/M billing code for all or nearly all of his or her outpatient visits.”   And if you’ve learned anything in the face of increasing Medicare audits and payment recoupments, you definitely don’t want to be the bright spot on CMS’ radar. In 2012 alone, a record-breaking $4.2 billion in healthcare fraud recoveries were logged.

So is My Practice Upcoding or Not?

To evaluate if your practice is guilty of upcoding, you’ll need to rely heavily on data comparisons. By running a CPT Utilization Report, you can see how your E/M billing is ranked compared to that of your peers.   Below are several samples of the report that we provide to our current clients in their monthly financial report package. You can see it’s easy to interpret and – at a glance – you can see exactly where your practice stands.   So for this physician, we wanted to evaluate the following E/M codes:


99201New Patient – Focused Visit99211Est Patient – Minimal Visit
99202New Patient – Expanded Visit99212Est Patient – Focused Visit
99203New Patient – Detailed Visit99213Est Patient – Expanded Visit
99204New Patient – Comprehensive99214Est Patient – Detailed Visit
99205New Patient – Complex Visit99215Est Patient – Comprehensive


And then based on the national provider data accessed via CMS, we calculated the variances for new and established patients for each of those E/M services above. A positive percentage indicates the possibility of upcoding, while a negative percentage could mean undercoding – a whole other issue we’ll discuss in the future.

For a better visual, these graphs pit each physician’s coding against the national averages.

Report Wrap-up

Remember to run this report each month, for every provider in your office. The greatest strength and benefit of long-term data collection is being able to review trends over time. And the whole point of analyzing trends is to find ways to maximize your reimbursement and avoid as many of those audit-inducing errors as possible.

If you’re stumped on how to adapt this report to your practice, feel free to reach out to us here at Capture Billing for help. You can fill out our simple contact form or call us direct at 703-327-1800 and we’ll get you back on track with your monthly reporting goals in no time.

How does your practice’s coding compare to the national averages? Please comment below and let me know!

is a 20 year veteran of healthcare having managed medical practices. He advises medical practices, physicians and practice administrators on how to run their practice and manage their medical billing and revenue cycle management. Manny speaks, blogs and makes videos at www.CaptureBilling.com, a blog that is tops in the medical billing and coding field. READ MORE

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Capture Billing helps medical practices by reducing their insurance accounts receivable and getting claims paid faster, allowing doctors to focus on providing quality healthcare to their patients without the stress of doing their own medical billing.

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The analysis of any medical billing or coding question is dependent on numerous specific facts -- including the factual situations present related to the patients, the practice, the professionals and the medical services and advice. Additionally, laws and regulations and insurance and payer policies (as well as coding itself) are subject to change. The information that has been accurate previously can be particularly dependent on changes in time or circumstances. The information contained in this web site is intended as general information only. It is not intended to serve as medical, health, legal or financial advice or as a substitute for professional advice of a medical coding professional, healthcare consultant, physician or medical professional, legal counsel, accountant or financial advisor. If you have a question about a specific matter, you should contact a professional advisor directly. CPT copyright American Medical Association. All rights reserved. CPT is a registered trademark of the American Medical Association.

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