Reimbursement crisis may be hampering proper medical screening

As many as 70% of claims submitted to private insurers are questioned or downcoded, says one expert

Apparently, not all medical screenings performed in the ED are created equal. Not in the realm of managed care. Payers are seizing on an inherent degree of subjectivity that physicians tend to bring to screening exams to question and reject what actually took place during triage and stabilization.

Private health plans are routinely denying payment for the level of patient evaluation and management (E&M) submitted by providers on medical claims and paying instead for a lower level of service within the CPT-4 codes series 99281 to 99285.

This ostensibly arbitrary practice has been going on for quite some time, according to Dick Pugh, president of Med-Data, a Seattle, WA-based emergency physician billing service. As many as 70% of medical claims submitted for payment to private health insurers are routinely questioned or down-coded to a lower level of E&M service, says Pugh.

Payers accuse providers of up-coding

As a result, providers are being cautioned by reimbursement experts to pay close attention to the information that goes into their clinical documentation, especially their patients' medical charts, to back up their coding. "Often, it's the only defense you have against these seemingly arbitrary down-codings. And even that may not be enough," Pugh states.

For their part, insurance company auditors have long complained of intentional or erroneous up-coding by hospitals and physician billers that have led to unjustified over-reimbursements. "We know this is happening in the ED, and it's a serious problem," says Myra Snyder, president and chief executive officer of the 40-member California Association of Health Plans in Sacramento.

But it isn't only with private payers that providers may have to defend themselves.

Federal officials have been cracking down on hospitals for allegedly violating patient anti-dumping statutes. And they're poring over patient charts and related documentation kept by physicians and nurses in the ED in search of clues suggesting that providers might have skimped on screening procedures.

In October, Carroll County General Hospital was fined $32,500 by federal regulators for allegedly failing to provide four patients in the ED with appropriate medical screenings. The government unearthed the four cases during a random audit of patient files. Other hospitals nationwide have been similarly targeted and fined.

HCFA delays new coding guidelines

Meanwhile, the Health Care Financing Administration (HCFA) has been been working with the American Medical Association in Chicago, IL to issue new guidelines that purportedly clarify the complexities of the E&M codes, including the five levels of E&M that apply to medical screenings performed in the ED.

But providers have assailed the new guidelines as overly complex. Baltimore, MD-based HCFA postponed the original Jan. 1, 1998 implementation date until July 1, 1998 to give providers more time to study the guidelines. Essentially, the guidelines provide new standards for documenting the four levels of exams (problem-focused, expanded problem-focused, etc.). They also identify specific clinical procedures required at each level divided into specific areas of the body and organ systems.

For emergency physicians and hospitals, these trends add up to growing concerns over what constitutes adequate medical screenings in the ED. They also point to the level of clinical documentation deemed appropriate to capture warranted levels of reimbursements.

Reimbursement experts advise a balanced self-assessment of the the coding and documentation and some realistic expectations regarding the managed care system in the following areas:

Subjectivity. Some authorities have viewed a certain degree of clinical subjectivity in medical screenings as unavoidable. "The question is: How do you treat your patients? What standards do you bring to the screening?" asks David Kalifon, MD, JD, an emergency physician who practices law with attorneys Jeffer, Mangels, Butler and Marmano in Los Angeles.

Physicians may find it impossible to avoid making subjective decisions regarding the level of work-up they consider necessary and appropriate in determining the presence of an emergency. Most emergency providers are compelled to a minimum standard by federal COBRA/EMTALA regulations. But where that standard lies can be quite subjective, Kalifon says.

Yet, does this level of subjectivity influence the level of E&M that ultimately gets billed to the managed care organization (MCO)? Quite possibly, says Kalifon. But regardless of the standard you adopt, "the MCO is likely to argue that the standard was too high anyway," regardless of EMTALA considerations, he adds.

The key, then, is to be consistent with all patients, Kalifon advises. "Deal with all your patients in the same manner, regardless. It might be questioned by some as a low malpractice standard. That's debatable. But it will be a consistent standard. That's the best standard you can uphold," he adds.

MCO's don't care about EMTALA

Consistency. The patient file should reflect this consistency. But it should ultimately focus on the work that was actually performed, not the differential diagnosis, observes Pugh. At all times, the coding for the medical screening should be based on the extent of the work-up. It should not be determined by what the provider may think will be the final diagnosis even if it makes the extent of the work-up seem excessive.

For example, a payer may downcode a claim for a patient who presents with stomach pain while a level three or four work-up rules out a cardiac disorder. The final diagnosis may suggest to the payer an excessive work-up.

But providers should not concern themselves with the ultimate difference between the coding and the final diagnosis. "The differential diagnosis should not have to justify the level of the E&M code. It's the extent of the work-up itself that determines the screening," Pugh adds.

That may seem obvious to physicians. But it's also the root of the problem between payers and providers, says Kalifon. "MCOs don't understand medical screenings and don't really care about EMTALA standards," Kalifon adds.

Motivation. The new HCFA E&M guidelines were designed to clarify what physicians should be documenting. The guidelines were designed to make the coding and charting task easier for providers, notes Karen Schechter, a reimbursement consultant with Stone Carlie, a practice management consulting firm in St. Louis, MO.

"It may take more time, but if physicians are already paying attention to their coding, the guidelines could actually make the work easier," Schechter says.

But much of the coding and billing submitted by providers routinely gets performed by medical record coders and office billers. These third parties can't gauge what actually took place during the screening, says consultant Martin Karpiel, MPA, president of Karpiel Associates in Long Beach, CA.

Furthermore, physicians who are paid an hourly rate or on a percentage of charges have few incentives to adhere to strict coding guidelines, Karpiel says. Unless they are capitated or paid on a case rate, the incentives to add on charges whenever they're perceived as legitimate are fairly strong.

The charges for additional ancillary tests when documented will tend to support a higher level of history and physical and therefore can be used when billing to justify a higher level of E&M coding, Karpiel adds.

[Editor's note: Karpiel has written a guide for providers entitled: "Managed Care in Emergency Medicine, Understanding the New Opportunities." To obtain a copy, contact: the American College of Emergency Physicians, PO Box 619911, Dallas, TX, 75261-9911. Telephone: (800) 798-1822 ext. 6. Request order no. 070000. Price: $54 plus $1.50 shipping.

To obtain a copy of the new evaluation and management coding guidelines, contact: the American Medical Association, customer service, 515 N. State St., Chicago, IL 60610. Telephone: (800) 621-8335.]


For additional information on the legal and practical aspects of coding and documentation in emergency medicine, contact:

David Kalifon, MD, JD, attorney, Jeffer, Mangels, Butler and Marmano, LLP, 2121 Avenue of the Stars, 10th FL., Los Angeles, CA 90067. Telephone: (310) 203-8080.

Dick Pugh, president, Med-Data, 9709 Third Ave., NE, Suite 30, Seattle, WA 98115. Telephone: (800) 835-7474.

Martin Karpiel, MPA, president, Karpiel Associates, 6475 E. Pacific Coast Hwy, Suite #402, Long Beach, CA, 90803. Telephone: (562) 597-1108.