Another Way to Run Afoul of E&M Coding

Posted on December 5, 2007
Filed Under Primary Care in America, Wonkonian Rationing |

Last week, DrRich ranted on the E&M coding guidelines, and attempted to demonstrate how this oppressive and uninterpretable set of rules has harmed patient care, and has exposed many if not most doctors to the constant threat of an unpleasant visit from the Office of the Inspector General.

DB took up the call here, and the Happy Hospitalist (who was the one that rekindled DrRich’s indignation on coding issues in the first place) took up (here) the mind-numbing question of how the resultant codes get converted into physician payments. DrRich doesn’t really expect any of his readers to sort through HH’s explanation of the arcane details of coding. Just realize: Real doctors can’t actually follow these procedures to anyone’s satisfaction.

DrRich does not mean to offend his medical colleagues by claiming they can’t code correctly. He is just stating a fact. There is, in fact, no “correct” way to code, because correct coding is impossible. This verity was proven a few years ago when a group of specialized government-sanctioned coders took a sample of typical doctor-patient visits, coded them according to their own E&M guidelines - and they all got different answers. DB describes this interesting result in an old post, here.

Obviously, any doctor toward whom the fickle finger of fate points the OIG is very likely to be found guilty of abuse, if not fraud. Here’s what happens to doctors who are found to commit coding abuse (that is, who are visited by the OIG):

1) A small sample of their patients’ charts is audited.
2) The error rate is calculated for that sample, then that rate is applied by extrapolation to all Medicare billing the doctor has done for the past 6 years (the statute of limitations).
3) For each violation in coding the doctor is calculated to have committed during those six years, the doctor must pay a) triple the amount of restitution, and b) $11,000.00 (per coding violation).

It is not unusual for audited doctors to be hit with hundreds if not thousands of coding violations over a 6-year period, and the fines will almost always amount to well over 7 figures, if not 8. Even rich doctors usually can’t afford that kind of damage. However - if it’s just abuse the doctor has committed and and not fraud - often the OIG may offer a settlement deal in the low 7 figures.

And here’s what happens if the coding violations are judged to be fraudulent (which, unfortunately, often appears a somewhat arbitrary designation):

1-3) All the above, minus any settlement offer.
4) Jail

So really, at the end of the day we see that the E&M coding guidelines amount to just another iteration of the Wonkonians’ favorite gambit, the Regulatory Speed Trap. Nothing particularly new here.

Except there’s a little twist that makes the E&M guidelines just a bit more interesting than the average RST.

Realizing they’re in a no-win situation, not wanting to attract the attention of the Feds, and wishing to immunize themselves against being judged fraudulently avaricious if they do, many doctors have taken up the practice of routinely “downcoding.” Downcoding is the opposite of upcoding (upcoding being the sin against which the E&M coding guidelines were invented). By routinely billing for Level 2 E&M services (with Level 5 being the highest), these doctors believe they are making a reasonable trade. They’ll accept less money than they deserve, in exchange for less odious documentation requirements, and (they believe) avoiding the deadly scrutiny of the feds. Government agents should consider this capitulation a victory, these doctors reason, since they will be paying out less money than is actually owed.

Such doctors badly misread the purpose of the E&M guidelines. The purpose of these guidelines is not to save money (either by guaranteeing that the documentation matches the coding level, or by scaring doctors into routinely downcoding). The purpose, like any Regulatory Speed Trap, is to create new opportunities for fraud.

This being the case, doctors who downcode - who attempt to remove themselves from the jeopardy of incomprehensible, no-win coding rules - just make the Feds mad.

Accordingly, the OIG has determined that the practice of downcoding, of billing the preponderance of patient encounters as Level 2, constitutes the fraud of “clustering.” Clustering, which is readily identifiable by means of software that looks for more Level 2 codes than average, indicates that the doctor is guilty - of upcoding! The theory here is that if the doctor is billing every patient encounter as Level 2, there are bound to be a few that ought to have been Level 1. Hence, clustering itself constitutes sufficient proof of abuse, if not fraud. Accordingly, clustering is punishable. (In reality, of course, Level 1 clinical services are so trivial that they are almost never seen in clinical practice. “Clustering” at Level 2 is downcoding, not upcoding.)

Doctors whose billing patterns show an insufficient diversity in coding levels, as determined by the Feds’ Secret Software, are therefore guilty. (Nobody should be surprised that the uber-virtue of “diversity” - from which, apparently, the subservient Seven Holy Virtues must spring - even applies to physician billing practices.) Only such diversity, after all, can demonstrate that a doctor is treating the E&M guidelines with the respect they deserve.

So: You can’t win; you can’t break even; you can’t even get out of the game.

Unless, that is, you really get out.

Comments

3 Responses to “Another Way to Run Afoul of E&M Coding”

  1. Marilyn B. on December 10th, 2007 12:45 pm

    Wow. No wonder physicians are either quitting altogether, or refusing to accept Medicare patients. This really stinks. Thanks for writing about it. My daughter is working her way towards med school; she has decided on pathology and forensic medicine, wants nothing to do with the politics of patient care.

  2. Marilyn B. on December 10th, 2007 10:00 pm

    I meant also to add that this is only a shadow of what’s to come if we nationalize health care. I don’t want any part of that.

  3. The Covert Rationing Blog » Blog Archive » Covert Rationing Even Wrecks Socialism on December 11th, 2007 5:53 pm

    [...] The only way doctors have a realistic chance of attaining excellence under such a system, so as to service at least the rich, the connected and the quick-witted, is to abandon the system altogether. [...]

Leave a Reply