All the change in healthcare over the recent years has unfortunately meant new opportunities for abuses of medical billing. This kind of fraud and misuse puts providers at risk financially and ultimately jeopardizes the quality of care you can provide in the long term. Many providers who have realized this understand that now is a good time to consider investing in medical coding audits. If you begin the process now, you can position yourself well in 2024 to be conducting audits that will provide considerable value to your organization.
The American Medical Association’s Perspective
The American Medical Association (AMA) has stepped out recently to emphasize the importance of medical coding audits, paying particular attention to differentiating between “fraud” and “abuse” .
Medical coding and billing fraud is an intentional misrepresentation. Abuse on the other hand, is an innocent mistake, but still one that can’t be overlooked. This could be something unintentional like coding for a service that was more complex than what was performed because of a lack of understanding of a complex new coding system.
Common Triggers for Medical Coding Audits
To help you evaluate how much value you can see from investing in a medical coding audit for 2024, here are some of the most common signs and symptoms that mean you should take action immediately and begin deciding whether this is something you can handle internally or whether outsourcing is a good choice for your situation.
Both Medicare and Medicaid frequently have lower reimbursement rates when procedures are commonly performed together. This includes procedures like incisions and closures incidental to surgeries that should also be billed together. When these codes are billed separately, they can increase a provider’s profits through higher reimbursement from either agency.
Upcoding is a rather straightforward issue and is simply when a provider uses codes that indicate more expensive services than were provided. An example would be medical coding reflecting a complex procedure when a more simple one was actually performed.
A second type of upcoding involves time. It’s possible to upcode a bill for a visit by coding for more time than it actually involved. This happens with evaluation and management (E&M) codes – using one of these codes for a more time intensive and complex visit than a patient actually received.
Another type of upcoding involves using modifier codes that indicate distinct additional services that weren’t provided during a visit when the services that were provided are actually covered by the standard code.
Not Checking NCCI Edits When Multiple Codes are Involved
The National Correct Coding Initiative (NCCI) was created by the Centers for Medicare and Medicaid Services (CMS) in an effort to reduce improper medical coding and promote national correct coding methodologies, all to reduce inappropriate payment of Part B claims. The CMS coding policies are based on coding conventions defined in the AMA’s CPT manual, coding guidelines developed by national societies, national and local edits and policies, and review and analysis of current coding practices.
It is critical that coders keep up with these edits to avoid medical coding mistakes. These edits are automated and determined through the analysis of every pair of codes that are billed for the same patient on the same day by one provider to check whether an edit exists in the NCCI. If an edit exists, one of the codes is denied. These edits are released regularly and come in three forms:
- NCCI Procedure-to Procedure Edits: These address incorrect payment of services that shouldn’t be reported together. Every edit consists of a Column One and Column Two HCPCS/CPT code, known as a “pair”.
- Medically Unlikely Edits: Known as “MUEs”, these prevent improper payment for the wrong quantity of a service on a single day. An MUE is the highest number of units of a service that can normally be reported by the same provider for the same beneficiary on one date of service.
- Add-on Code Edits: These are a list of HCPCS and CPT add-on codes that correspond to respective primary codes. The add-on is only eligible if one of its primary codes is eligible for reimbursement.
Not Appending Appropriate Modifiers
Not using the appropriate modifiers when coding is a common issue when coding medical claims. It can be something as simple as using modifier 50 on a code that includes bilateral service. Currently though, one of the most commonly used modifiers is modifier 59. It indicates that a service or procedure was distinct from other services that were performed by one provider on the same day. According to CMS, documentation should support a different procedure, surgery, session or a separate organ system, lesion, incision/excision, or injury that is not typically encountered or performed on the same day by the same individual .
Overuse of Modifier 22
Modifier 22 is coded to label a service that requires significantly more effort from a provider, such as more time, intensity, or technical difficulty. It can also be used to indicate the severity of a patient’s condition or increased physical or mental effort needed. Use of this code must include documentation to explain why the procedure in question took more effort than usual. One example would be the excision of a lesion on a highly obese patient, which made the excision more difficult. Providers should use discretion when reporting this code and be careful that documentation supports all medical coding decisions.
Improper Reporting of Infusion and Hydration Codes
Reporting on these codes requires solid documentation of start and stop times, but things can get complex when services are provided over two days. So, it shouldn’t be surprising that these codes are a common area of focus for audits since mistakes and errors are easy to commit.
Issues can come up because of lack of documentation of times, but also lack of documentation of medical necessity for hydration services. Besides a lack of understanding around coding processes for these procedures in general, there are also many issues around not following the CPT hierarchy for specific codes.
Improper Reporting of Injection Codes
Injection codes carry many of the same pitfalls as infusion and hydration. Only one code should be reported for the entire session in which an injection was performed, vs. multiple units of a code. This is an area where experience really can make a difference in your audit outcomes. But audits in this area can also be highly useful in identifying areas for improvement or red flags that you should consider outsourcing your medical coding.
Reporting Unlisted Codes Without Documentation
If an unlisted code is used, then documentation must be included to support it.
In general, unlisted codes can be unwieldy. If a provider uses an unlisted code, your coders will need to review the service to determine that a standard code doesn’t already exist. They might also need to review physician records for any information that might be missing. Coders will need to determine what the service was, why it was necessary, and whether there were any circumstances that impacted how the service was provided. Additional details will need to be included such as what other providers were involved, equipment used, and length of the procedure.
Coders will also need to include descriptions of the unlisted service on the CMS-1500 claim form, Item 19.
As medical coding becomes more complex, the value of medical coding audits only increases. Coding audits can be highly intensive, involving reviewing medical charts, addressing the root cause of errors, implementing corrective action, and maintaining reliable data for research. For many providers, especially those facing staffing shortages, outsourcing these responsibilities to an experienced partner is a smart decision. To start evaluating your medical coding audit outsourcing options today, start here.
 K. B. O’Reilly, “8 medical coding mistakes that could cost you,” 18 September 2023. Available: https://www.ama-assn.org/practice-management/cpt/8-medical-coding-mistakes-could-cost-you.
 Phillips & Cohen, “Upcoding and Unbundling,” 27 December 2016. Available: https://www.phillipsandcohen.com/upcoding-unbundling-fragmentation/.
 CMS, “Proper Use of Modifiers 59, XE, XP, XS, and XU,” March 2023. Available: https://www.cms.gov/files/document/mln1783722-proper-use-modifiers-59-xe-xp-xs-and-xu.pdf.