Billing Pitfalls: How To Avoid An Audit

No podiatric practice wants to risk the hassle and stress of an audit. This author provides advice on keeping your documentation in order to avoid an audit, including the correct use of modifiers and ensuring accurate coding for new technology and durable medical equipment.

In many businesses, the reality is that audits will happen and your best defense is always going to be rock-solid charting. There are some basic rules of billing to minimize the risk of an audit. To begin with, services rendered must always be medically necessary and reasonable. These can be vague terms as they are not well defined but generally relate to adhering to the standard of care. Although doctors may have personal preferences in the way they deliver care, the materials they use, etc., being outside of the norm can trigger an audit.

Audits can be triggered by a patient complaint, a fellow provider complaint, a disgruntled employee complaint or performing/billing services generally two standard deviations above the mean. You could also be audited strictly at random. Audits can come from insurance companies, your Medicare carrier, state business licensing boards as well as the Centers for Medicare and Medicaid Services (CMS) via its Comprehensive Error Rate Testing (CERT), the Recovery Audit Contractor (RAC) and the Office of the Inspector General (OIG).

How To Audit Yourself Before Somebody Else Does

A great way to avoid an audit from an outside agency is to audit yourself first. This should be part of any office’s internal compliance program. Periodically check your policies and protocols to make sure you are following up-to-date standards. Use current CPT and ICD-10 codes. Address known patient or employee concerns. This can stave off many other problems in the future as well.

The next step is to audit your own charts. The flow in the office goes like this: your chart/examination > superbill > claim form > explanation of benefits. Check each step along the way. Reviewing these steps may also help streamline your practice billing protocols. You can also have a trusted colleague review your charts (but make sure to avoid any type of patient identifiers) to get an independent idea as to the accuracy of your charting/billing. There are professional reviewers as well who can review your charts for a fee.

Evaluation and management (E&M) services are a constant area of audit. There are three components of any E&M service: history, exam and decision-making For an initial E&M service, all three components need to be at the same level of complexity. If you do not have that level of documentation on all three components, you have to drop your billing down to the lower level. Follow-up visits only require that two of the three components are at the same level. This boils down strictly to documentation.

In the back of the CPT book, you will find examples of scenarios that might justify a higher level office visit. Although this gives a guideline as to what services might commonly justify billing a higher level of services, actual documentation determines the coding level to select. The scenario of a patient with diabetes who presents with a fulminant ulcer that needs immediate incision and drainage does not by itself guarantee a higher level of payment if your charting is only a few lines long.

How To Use The 25 Modifier

Another area of audit today is the use of modifiers. It is important to understand the proper use of each modifier as overutilization or incorrect usage of modifiers can trigger an audit.

The 25 modifier is a commonly audited modifier. Use this modifier when a procedure and an E&M service happen on the same day. Generally, one cannot bill these two services as the office visit is included in the procedure code when they occur on the same day. However, if the evaluation and management service is significant and separately identifiable from the procedure, then one can bill the two together. The problem is that the terms “significant and separately identifiable” are not clearly spelled out. The following scenarios may clarify the distinction.

Scenario 1: A patient presents with a new heel problem. You obtain a patient history, perform an examination and then give an injection. The billing would be for an office visit (E&M level per documentation), the injection and the steroid you used. Do not bill for local anesthesia or syringe/supplies as those are included in the fee allowance for the injection.

Scenario 2: The patient returns a week later with 50 percent improvement. The examination is basically the same and the decision is to give a second injection. On that visit, the update history and exam are minimal so the injection and steroid would be the only billable items.

Scenario 3: The patient did not improve with the injection in scenario 1. Obtain/review additional history. After examining adjacent joints, tendon, nerves, etc., you decide to try a local nerve injection and obtain some lab work. This requires a much more involved workup so an E&M service would also be payable in addition to the injection and steroid.

Scenario 4: A patient presents on a predetermined date for a procedure in the office. Since the workup already happened and, at best, a limited examination occurs the day of the procedure, only the procedure would be payable.

Some doctors seem to want to add a 25 modifier on every service “just in case” but excessive use of this modifier can trigger an audit. There is no need to use a 25 modifier when billing an office visit service along with either physical therapy or a diagnostic service.

Current Insights On The Use Of Other Modifiers

Another modifier that is commonly audited is the 59 modifier. Use this to indi-cate procedures performed in different areas or to differentiate procedures that may be commonly bundled together. The documentation needs to be clear as to why you believe two procedures are separate. Try to use other modifiers first such as the T modifiers or the RT/LT modifiers instead if you can. Check the National Correct Coding Initiative (CCI) edits to see which procedures are bundled together and which of those bundled codes requires appending it with the 59 modifier.

Medicare tends to audit the nail debridement code series CPT 11720–11721 routinely. Keep in mind the basic premise that routine foot care is not covered unless you can document an exception. Documentation of an “at-risk” systemic problem such as diabetes tends to be rather easy. It gets more difficult when you try to use pain as the qualifying diagnosis to get paid for your claim. Nail and callus care are covered when there is pain with ambulation. Having pain when nails are being cut does not qualify for coverage. Keep in mind that pain is a subjective symptom and there has to be some objective documentation in the chart to validate billing with this exception.

Lastly, only use modifiers Q7, Q8, or Q9 when billing routine foot care for vascular-based diagnosis codes and not for any other type of service.

Avoiding Billing Problems When Using Newer Technologies

Higher utilization of a service can often trigger an audit. This tends to be in ar-eas of new technology and the use of diagnostic equipment. Before billing these types of procedures or using the new instrumentation/machinery, be very clear as to the requirement for using these items/codes. Never rely on the sales representatives of the company as to what CPT and ICD-10 combinations to use. New diagnostic devices/materials may be “similar” to existing devices but using the same billing codes/protocols may not be correct. Sales representatives may not tell you this.  

Many devices/modalities may be indicated for certain procedures/situations but are not Food and Drug Administration (FDA)-approved for others. Even if the FDA approves a procedure/modality/device, that does not mean that the insurance carrier will pay for it. You should obtain preauthorization for new devices and materials. Wound care products can be very expensive. Purchasing a device that may not get reimbursement would be a poor investment. You may obviously proceed with performing the services long as you inform the patient of the “off label” or non-covered use of the device/material. The hard lesson is that in an audit, any money paid back comes from you, not the manufacturer of that new device/material.  

Diagnostic testing must be medically necessary and reasonable. Be careful of using terminology such as “rule out” as these types of tests can often be deemed screening in nature. Make sure you use symptoms to validate the use of the test. For example, do not use a vascular exam to “rule out” peripheral vascular disease but rather to evaluate ischemic pain or a non-healing ulcer.

Why You Should Keep A Close Eye On EOMBs

Another way to prevent audits is to monitor your explanations of medical benefits (EOMBs). Claims may be paid but that does not necessarily mean they were paid/billed correctly. Similarly, claims can be denied and that does not necessarily mean you are performing improper services. Spot check all EOMBs, especially denials, and learn from what errors you make. Simply trying to rebill in some different fashion may render payment but this may be because you found a loophole of sorts in the billing protocols. That does not make it right. Audits are obviously based on claims that were already paid.

Services that are not covered are simply not covered. Trying to find ways around that can be a major pitfall. For those services that insurance carriers do not cover, such as routine foot care or orthotics, we need to be upfront with the patients and simply tell them that, “Although in my medical opinion the service may be appropriate, it is not a covered service and our fees are as follows.” Trying to get coverage by manipulating codes or diagnoses can trigger audits as well as subject you to fraud and abuse allegation. Even though the patient may request/understand billing in a certain way to get coverage, ultimately money that is requested in repayment to the insurance carrier will come from you, not from the patient. Trying to bill a patient after the fact is next to impossible.

How To Bill For DME Without Getting Audited

Durable medical equipment (DME) is another area of review and audit. You need an order in the chart that indicates the item you are requesting, the medical necessity of that item and the length of time this item is needed. In the past, Medicare carriers have requested a separate physical order but now they tend to allow an order that is in the body of the chart note. Upon dispensement of the DME item, there needs to be a receipt signed by the patient indicating the item dispensed, that the patient had instructions on how to use it and that the item fit.

When it comes to DME, the use of controlled ankle motion (CAM) walkers, which CMS does not allow for ulcer management, is a common target for auditing. The patient may have another associated problem that could be allowed for use of the CAM walker but if the ultimate use of the CAM walker is related to offloading the ulcer, it is not a covered item.

Besides the option of pneumatic versus non-pneumatic, off-the-shelf CAM walkers, there are two other options: one requires significant modification and the other does not. There are no specific rules as to what constitutes “significant” modification. Code L4360 requires that this device have significant modifications made by the provider. This is commonly not required and accordingly, there is an extremely high denial rate in an audit. Billing L4361 for the CAM walker does not require making significant modifications. This would be a better billing option at this time.

Final Thoughts On Avoiding Audits

Lastly, a lot of times, doctors lose audits simply because they never submitted chart notes or other documentation, even though the auditor asked. If the chart is not submitted, the auditor deems it an error. When submitting chart information, make sure to initial that you have read the lab results, X-ray reports consults, etc. Loose papers in a chart tend to get lost so make sure papers adhere well into the chart. Sign chart notes in some fashion, either manually or electronically. Each sheet of paper must also clearly identify who the patient is and the date of service. It is a good idea to keep the signature log since signatures can often be illegible. Make sure any corrections to the chart are clearly documented even with electronic and digital records.

Always appeal audits. Chart reviewers may follow set algorithms when doing an initial chart review. Be willing to defend your chart notes and billing. You may not have to pay back any money.

Dr. Poggio is a California Podiatric Medicine Association Liaison to Palmetto GBA J1 MAC and a medical consultant to several national health insurance and review organizations. He is a member of the American College of Podiatric Medical Reviewers and is board certified by the American Board of Podiatric Orthopedics and Primary Podiatric Medicine.

For further reading, see “How To Prepare For An Insurance Audit” in the February 2017 issue of Podiatry Today or “How To Respond To A Medicare Audit” in the December 2008 issue.