Building an Effective Coding Compliance Program in Medical Practices

Medical practices and hospitals of all sizes are affected by a rapidly changing coding environment. There’s no escaping it. Deadlines for additional adjustments loom close at hand, and many practices are not positioned to effectively and efficiently handle the transition. Failure to adapt to shifting coding compliance requirements, however, can translate to large fines, asset seizure, or even jail time.

Spending time understanding and implementing an effective coding compliance program places medical practices in the best possible position to mitigate risk, receive proper payments, and successfully transition to the final phase of ICD-10 when payers turn on all edits.

This article explores common myths about clinical coding, identifies ways practices get into compliance trouble, and provides specific avenues to implement an effective coding compliance program.

Five Myths about Coding

There is misinformation out there about coding compliance and how that translates to individual practices. The first step to fixing the problem is fully understanding it.

The problem many practices are facing is twofold—far too many medical practices either employ coders who are not qualified or rely solely on their electronic medical record (EMR) systems for coding compliance. Although team members may have only the best intentions, staffers who are not formally trained in coding standards and guidelines tend to produce poor quality coding—often guessing in instances where certainty is required. They simply do not have the information or training necessary to produce a work product that payers can accept.

If your policy is to let the software figure it out, you could find yourself facing delays in payment, outright rejection, or a full-scale audit.

EMRs, touted as eliminating the need for credentialed coders, are certainly a useful tool to assist with coding, but should never be the standard that medical practices work toward. In an audit situation, Medicare or the Office of Inspector General (OIG) looks at your internal standard policy for coding. If your policy is to let the software figure it out, you could find yourself facing delays in payment, outright rejection, or a full-scale audit. Here are five important myths about clinical coding for practices to understand—and debunk!

Myth #1: Cost of a Credentialed Coder

All too often, physicians say, “We can’t afford a certified coder,” but the reality is, physicians can’t afford not to engage one. Physicians and administrators place their practice and team members at risk by not proactively building an effective coding compliance program. A single credentialed coder not only reduces audit risk, but also helps build coding compliance and ensure proper reimbursement.

Myth #2: EMR Software Does It All

There is widespread belief that EMR software takes the place of credentialed coders. One of the biggest mistakes practices make is expecting their software to code properly. EMR vendors do not receive or reimburse medical claims. Payers do. Therefore, practices must comply with the same coding standards and guidelines as their payers—E/M, CPT, and ICD-10 coding books.

The excuse, “My software should do proper coding,” does not stand up in an investigation. Providers are accountable for the accuracy and content of the claim regardless of any software program.

The EMR’s coding module is only as good as the data entered.

Many EMR companies say their product precludes hiring a certified coder. However, the EMR’s coding module is only as good as the data entered—human intervention takes precedence. Regardless of coding workflow and type of EMR software, a practice will always benefit from having a certified coder’s input and oversight.

Practices mitigate the impact of this problem by having a certified coder involved at some level (or better yet, at multiple levels) in reviewing codes assigned by the EMR to ensure they meet payers’ standards and coding compliance guidelines.

Myth #3: Compliance Plans Not Needed

Another myth is that practices do not need a coding compliance plan. In reality, having a compliance plan benefits a practice in a number of ways. If there are questions with an audit, having a compliance plan clearly shows you are making efforts to code correctly. Effort equals credibility and carries weight with auditors. The existence of a carefully considered plan can favorably influence medical, OIG and other auditing bodies.

A compliance plan also provides checks and balances to help ensure accurate claims submissions to payers, and provides for ongoing coding training as coding and billing rules evolve.

Myth #4: Rebilling the Same Claim Works

A common myth is that rebilling the same claim again with the same codes eventually results in reimbursement. In reality, the converse is true. Rebilling the same claim with the same codes is a red flag for future denials and audits.

Instead, medical groups should resubmit claims with corrected codes and supporting clinical documentation to explain the coding discrepancy. Rejected claims are good teaching tools for the coders within a practice, especially if a properly credentialed coder can point out what caused the rejection and how to fix it.

Myth #5: Documentation Doesn’t Matter

This leads to another myth, that documentation is an afterthought. Proper support documentation for coding decisions saves practices in the face of an audit, and with rebilling as well. A certified coder knows what kinds of documentation are required to ensure claims go through the first time.

Think Like a Payer

A good rule of thumb with coding is to think about where your reimbursement is coming from, and map your compliance strategy to the payer. However, staying on top of all the various payer guidelines is a big job for practices—now more than ever as things get more complicated. Correct coding must be a priority, not an afterthought.

For example, Medicare is the top payer for most physician practices and adheres to the most stringent coding guidelines. If practices aim to be in compliance with government standards, they generally should expect to pass the standards of private payers and health plans.

Any attempt to submit a claim for services not fully earned or provided constitutes a violation—and fraud.

Medicare typically reimburses practices based solely on representations in the claim certifying that you delivered the services documented and complied with the billing requirements. Any attempt to submit a claim for services not fully earned or provided constitutes a violation—and fraud.

Examples of improper claims that raise red flags with Medicare and other payers include billing for services:

• Not actually rendered;

• Not medically necessary;

• Performed by an improperly supervised or unqualified employee;

• Not related to your practice (e.g., gastroenterologist submitting a claim for an orthopedic procedure);

• Performed by an employee excluded from participation in federal healthcare programs;

• Of such low quality that they are virtually worthless;

• Already included in a global fee, such as billing for an E/M service the day after surgery; or

• Based on unspecified codes. Payers translate unspecified codes to mean “I don’t know” and suspect coders are assigning a quick fix rather than a true diagnosis. Work toward the goal of submitting every claim without using any unspecified codes. The primary driver is the medical necessity; often not well supported by unspecified codes.

Your target should be to have no more than 5% to 6% of your claims rejected. Very few practices meet this rigorous standard. In one program at a prestigious hospital system in Atlanta, a random sampling of coding revealed an accuracy rate of just 10% to 60%. The facility required 90% accuracy, so it instituted an aggressive training program to achieve higher coding accuracy.

Avoid Audits

If a questionable coding practice triggers an audit by either the payer or the state medical board, your practice will be upside down for many months. Audits are costly, disruptive, and time consuming, and have a high emotional and monetary cost. Practices can be placed under a corporate integrity agreement. They will also be audited for four to five years and are required to report back to the government regarding internal training programs and process improvement results.

An increasing number of audits are the result of whistleblowers.

In the worst-case scenarios, some audits have carried fines in millions of dollars, resulted in jail time for the practitioner, and led to subsequent loss of license. (An increasing number of audits are the result of whistleblowers, since they can net 25% of the amount awarded.) If the practice is placed under a corporate integrity agreement, it leaves a black mark on the practice for years to come.

Coding Compliance Guidelines for Success

Certain ingredients are fundamental for an effective coding compliance program. Practices can use the following checklist to shore up their coding policies and mitigate audit risk:

• Use certified coders whenever possible, and allocate resources to protect your practice.

• Set rigorous standards for proper credentials, minimal education, and continuing training or certification to protect a practice’s assets.

• Establish a plan to provide proper staff training when a new coder or provider is hired. Have an outside auditor conduct oversight early on until the new staff member is up to speed.

• Hire for critical thinking and problem-solving skills, and then provide close monitoring until the person has gained experience.

• Conduct regular coding audits across all coding standards you are currently using, as well as for ICD-10 (before and after the expiration of the physician grace period—October 1, 2016). Set benchmarks for the volume of cases to be reviewed, how frequently audits will be conducted, minimum benchmarks for accuracy, and what corrective actions will be taken should problems be found.

• Use EMR documentation templates correctly, and avoid the use of cloned notes. Implement a process to audit physician documentation on a regular basis.

• Build a procedure for tracking, reviewing, correcting, and resubmitting rejected claims. Correct under- or over-coding as quickly as possible, and use your findings for ongoing education across your practice: of clinicians, coders, billers, and more.

• Implement ongoing training protocols for everyone involved in documentation, coding, and billing, and determine what type of self-assessment will be performed.

The importance of building an effective coding compliance program cannot be overstated. In every case, properly credentialed coders should play a primary role in its implementation. A successful program can potentially save a practice against audits—and give physicians and employees peace of mind knowing their practice is in the strongest possible position to adapt to changes that lie ahead.

Affordable Coding Compliance Options

Practices can reap the benefits of a certified coder without investing in a full-time salary. Here are four affordable options:

• Partner with another practice to share the cost. The coder can work on more complicated claims or perform random audits. This trained professional should also provide feedback to other team members who may not have achieved certification or a higher level of training.

• Engage a certified coder in a contract arrangement to do a sampling of your records on a regular basis (much as an auditor would do). This coder must be proficient in problem claims, with the ability to explain to staff how to review explanations of benefits and correct claims. A good starting point is to review 25 records per physician, per quarter.

• Select a current staff member to go through coder training and certification to raise his or her skill set, using the training as an internal career advancement opportunity.

• Bring in an interim coder to achieve compliance and build an ongoing compliance plan. This could include an audit to identify specific coding and documentation issues. This interim professional could also identify and mitigate ongoing documentation or coding problems even the physician might not know about.