by Dr. Burton Bentley
- “Medical Necessity” is a target of most compliance audits.
- Cost-effective deployment of physicians and CPT coding experts is mission critical.
- Proven strategies for budgeting and documentation are foundational to success.
The principles of medical billing rely upon commonly accepted practices that comply with standards set forth by the United States Office of Inspector General (OIG). When billing practices adhere to applicable regulations, medical practices and their staff are generally insulated from actionable claims of fraud and abuse. The failure to comply, whether intentional or accidental, exposes practitioners to civil and criminal prosecution. Given the high stakes of medical billing, and the high cost of physician-level audits, it is imperative to adopt proven strategies for accurate and cost-effective chart analysis.
At its core, medical compliance auditing focuses on two discrete areas for each billed charge: medical necessity and technical coding and billing. The purpose of a medical compliance audit is to impartially determine whether a healthcare entity is compliant with applicable rules, regulations, and statutes governing the submission of medical bills.
A medical service or procedure is deemed “medically necessary” when it would have been performed by a reasonable physician, exercising ordinary care, in the context of diagnosing, treating, stabilizing, or improving a specific medical condition. Per CMS (Center for Medicare Services) requirements which are followed by nearly all payers, medical necessity for a billed charge is the “overarching criterion” for payment, and billing at a higher level is strictly disallowed when a lower level of service is warranted. CMS further stipulates that the billed services (not charges) must be “reasonable,” a stipulation which is generally interpreted to mean appropriate in scope and application. For example, an appendectomy is medically necessary for a patient with acute appendicitis, but it would be unreasonable to bill for multiple surgeons or unnecessary equipment to perform it. When certification of medical necessity is in dispute, an experienced physician or surgeon is required to shed light on the determination. Disputes involving technical elements of CPT coding and billing are best handled by a Medical Billing and Coding Specialist (MBCS) such as a Certified Professional Coder or a Certified Fraud Examiner.
Current Procedural Terminology (CPT) codes are published by the American Medical Association (AMA) and used by all healthcare entities when submitting bills for medical, surgical, and diagnostic services and procedures. Compliance with technical coding and billing means that each billable service or procedure is coded in accordance with rules and interpretative guidelines for CPT coding, and that the corresponding bill is accurate and properly submitted.
When exploring noncompliance, the first step is to determine the sample size and whether the analysis requires a MBCS, a healthcare professional (physician), or both. The sample size depends on myriad practical and statistical factors, and may include an entire universe of records, a statistically derived subset, a smaller number of specific exemplars, or hand-selected (non-randomized) charts. Since sample size is the greatest determinant of project cost, it is imperative to carefully consider the requisite number of charts for any given review.
Unless the sole issue is medical necessity, the entire chart sample will undergo MBCS review while a subset may ultimately require physician-level analysis. Budgeting for chart review is dependent upon sample size, record complexity, and whether an MBCS or a physician is required. Medical Billing and Coding Specialists typically bill standard rates on a per-chart basis which allows for straightforward cost projections. Physicians bill at significantly higher rates and are more likely to bill per hour rather than per chart since it requires a variable amount of time to review an entire patient record to determine medical necessity. In order to budget and limit cost for substantial reviews, it is always advisable to have physicians agree to a not-to-exceed fee for each reviewed chart.
Another best practice is to have physician reviewers compile their findings on a spreadsheet with prepopulated demographic fields. Pre-population by the retaining party is a foundational step that mitigates miscommunication by assuring that all parties are referring to the correct record and that individually identifiable healthcare information has been properly redacted. The same spreadsheet also provides columns for a brief record summary, key findings, and a final determination on medical necessity. The latter is a final conclusion, stated to a reasonable degree of medical probability, that the reviewed charges either were or were not medically necessary, or that a conclusion could not be drawn due to missing data that should have been provided as part of the record review. Of course, if all data was supplied and the medical provider’s documentation was inadequate to support the billed charge, then the provider failed to document medical necessity and the reviewer may disallow the charge unless supporting documentation is provided. The importance of a pre-filled spreadsheet cannot be overstated since it saves time and reduces cost while assuring that every participant is literally and metaphorically on the same page.
By applying these proven techniques of compliance auditing, one can review an entire sample set in a cost-effective manner that avoids cost overruns and common mistakes.
____________________
About Dr. Bentley and Elite Medical Experts:
Dr. Burton Bentley II is a board-certified Emergency Medicine specialist and a nationally recognized authority on medical liability, informed consent, and complex issues at the intersections of Medicine, Business & Law. He is also the CEO of Elite Medical Experts, a leading resource for the legal community that aligns Professors of Medicine & Surgery as experts and consultants in medical litigation. Elite serves nearly 4000 clients across the United States and has extended its expertise to cases totaling over $2B at risk.
