Practice Management Improvement Strategies

Practice Management Improvement Strategies

September 14, 2018
5 min read

Protect your practice against payer audits with these preparedness strategies

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The top two things that can trigger a payer audit are computer algorithms and coding outliers, according to attorney Patricia Hofstra, a partner at Duane Morris LLC.

“It’s almost guaranteed that if you bill a lot of one CPT code, it will eventually trigger an audit,” Hofstra said. “There may be nothing wrong with your coding and documentation, but you will be subject to more scrutiny.”

That is because payers run claims through analytics systems to identify patterns that are outside of the bell curve, Hofstra noted.

Cheryl Toth

“If you perform a high volume of total knee arthroscopy compared to your peers, you are going to be an outlier of that CPT code, and outliers get audited,” Hofstra said.

If there is a potential audit in your future, there is no better time than now to be prepared. Here’s how to do that.

Create a culture of compliance

Do physicians talk positively about coding accuracy and internal review? Are staff provided the right training and tools? Is the billing team comfortable when they question code choices and provide physicians with feedback?

These are important questions to ask. The answers should all be yes, Sarah Wiskerchen, MBA, CPC, consultant and coding educator with KarenZupko & Associates Inc., said.

“Creating a ‘no blame’ culture is a first step toward building a culture of compliance,” Wiskerchen said. “Don’t create an environment of ‘just bill it that way.’ Don’t penalize staff for asking questions.”

Hofstra worked with an anesthesiology group where nurses reported a physician who was adding minutes to the beginning and end of his surgeries.

“He would add 1 minute or 3 minutes to his time to generate more revenue,” she said. “He was padding his time.”

When the group became aware of this concern, it conducted an internal audit. After analyzing the audit results, the group rebilled the physician’s cases correctly and terminated him. The group also conducted billing and coding training and provided education for all providers that the nurses spoke up and the partners terminated a knowingly non-compliant physician put their practice higher on the compliance culture scale.

Compliance-friendly practices invest in education and provide access to resources and tools. This includes buying CPT books annually, subscribing to publications, like DecisionHealth’s Part B News, encouraging regular attendance at coding and billing webinars, and having physicians and staff attend training. The American Academy of Orthopaedic Surgeons offers regional coding and reimbursement courses.

Your team should know how to navigate the differences between CPT rules, AAOS guidelines and payer policies, such as National Correct Coding Initiative (NCCI) edits.


“CPT might allow codes to be reported in one way, but NCCI is more restrictive,” Wiskerchen said. “So, it’s important to keep up on National Correct Coding Initiative edits.”

Wiskerchen said, “Medicare is more restrictive than CPT for some codes. For instance, reporting limited debridement code 29822. The Recovery Audit Contractors are auditing claims with this code to make sure reporting criteria were met. Your team must know these criteria.”

Documentation requirements for medical necessity are also a critical topic.

“These requirements are increasingly being adhered to for retrospective analysis,” Wiskerchen said. “Even after a claim is paid, the payer can come back, say you did not document medical necessity and ask for the money back. This is especially common with total joint arthroplasty.”

Internal audits as preventive care

Wiskerchen and Hofstra advise practices to perform periodic self-audits of surgical procedures and evaluation and management (E/M) services.

“Start by looking at denial patterns and the services and procedures that staff are appealing,” Wiskerchen said. “It’s an important cue when payers are denying claims for reasons such as your claims lack documentation or bundled payment.”

Audit preparedness graphic

If your practice uses electronic posting, generate a report of denial patterns to identify which procedures have bounced back.

“For self-auditing E/M services, we recommend the E/M Profile Analyzer tool (KarenZupko & Associates Inc.),” Wiskerchen says. “It makes analyzing these codes fast and easy.” The tool generates a line graph that compares your utilization data to state and national peer data for your specialty.

After determining any outliers, select a random sample of patients who received E/M services and procedures. Review the office or operative note to determine whether the correct codes and modifiers were billed, and whether medical necessity was met.

Summarize the findings of internal audits and document how these were communicated to the physicians.

“There must be an open flow of communication between coders and physicians,” Wiskerchen said. “Even physicians who don’t want to be involved in coding must still be aware of how those services are being coded and billed because they are ultimately responsible,” she said.

If the self-audit shows there may be a problem with a physician’s coding and documentation, “you now know you have a problem before the payer does,” Hofstra said. “This is the best place for a practice to engage a health care attorney. If you identified your own problems, you can resolve them.”

Engaging an attorney immediately will help assure the practice’s investigation is covered by attorney-client privilege to the extent possible.


“Under attorney-client privilege, the information generated from the investigation may be protected from disclosure to the payer,” Hofstra said.

Audit etiquette

Even well-prepared practices can receive requests for records or an audit. If you have prepared properly, the process will be less painful. Swift action is important.

“Too many people put the audit request letter in a pile and ignore it until last minute,” Hofstra said. “You have to start day 1. Pay attention. Get moving. Contact the auditor and let them know you take the audit seriously. You can’t wait.”

If you do not take the request seriously, your practice could end up in prepayment review or be excluded from a clinical network. Or you could be subject to state and federal fraud under Medicare and Medicaid, or state insurance laws, if it is a commercial plan.

Next, contact a health care attorney.

“Don’t reach out to an external consultant or auditor directly,” Wiskerchen said. “Let an attorney do that who will know how to engage the right resources, assess the audit request and confirm or refute any of the payer’s audit findings.”

Hofstra added, “Too often practices try to handle the audit on their own, waiting until it’s a prepayment audit or huge refund request before calling.”

At that point, it might be too late for optimal legal advice. The practice may volunteer information the payer had not requested or may not understand certain nuances that an attorney does.

“A client was involved in a physical therapy audit,” Hofstra said. “The payer thought the therapy documentation didn’t support medical necessity of additional therapy. When we assessed the entire medical and billing record, we found the combination of the therapy record and physician notes, plus information in the appointment schedule, supported the provision of care.”

In another case, a surgical group was sent a huge recoupment request based on insufficient documentation to support medical necessity. It turned out the documentation the payer wanted was in a different part of the record than the part requested for review.

“When I looked at the whole record, I found it in a different section,” Hofstra said. “The practice told me, ‘Well, they didn’t request it, so we didn’t send it.’ Had the practice not involved an attorney, they may have paid the money back unnecessarily.”

Disclosure: Toth reports she is a business writer with KarenZupko & Associates Inc., which develops and markets the E/M Analyzer and delivers national coding and reimbursement workshops for AAOS.