Why, and How, to Do an E&M Utilization Review for Your Practice


by Laurie Morgan, partner and consultant, Capko & Morgan

For many practices, especially primary care, the E&M (office visit) range of codes represents the bulk of billed services. With so much money on the line, getting E&M coding right is critical. Because E&M billing is also a huge proportion of insurance reimbursement as a whole, it’s on the radar of auditors from both Medicare and commercial insurance. Knowing that you’re doing it right is crucial not just to reducing your risk of an audit, but to being able to defend your practice in the event you have to undergo one.

Reviewing your practice’s E&M coding distribution is a bit like looking at your practice’s coding patterns from 30,000 feet. Graphing a full year of data makes it easier to spot trends that are easily missed on a day-to-day basis. For example, physicians’ coding tends to drift upward or downward over time. Some doctors gradually push more visits towards level four and level five, aiming to capture as much revenue as possible; others don’t notice that they’ve begun coding most of their visits at level three as a matter of habit. In either case, if the drift means the clinician’s coding no longer matches the services provided, then the coding is incorrect, and the coding process needs attention. A distribution out of line with norms for your specialty may also mean a payer audit is more likely – knowledge you can use to help your practice prepare for that possibility.

Start by gathering your data
Start your review by pulling the data you’ll need from your practice management system (PMS). Today’s PMSs usually either offer standard reports by CPT code or a custom report tool that lets you extract data by code and provider. If your system allows you to export the report to Excel, so much the better; you’ll save time because you won’t need to re-enter data into a spreadsheet.

Separating the data by new patient visits (99201-99205) and established ones (99211-99215) is an easy way to break down the task. For each set of annual data, you can create a chart like this in Excel:
Physician: code 99201 code 99202 code 99203 code 99204 code 99205 Total
Anderson 12 252 900 12 24 1200
Buford 0 132 996 348 0 1476
Cochrane 12 996 96 0 0 1104
Delaney 0 36 732 432 120 1320
Elliott 12 48 1092 156 24 1332

Compare against benchmarks
Your PMS may offer built-in benchmarks that compare your coding patterns against other users in your specialty. But even if yours doesn’t have that feature (most still don’t), any practice can compare their code utilization against the CMS’s nationwide payment data.

Once you’ve added your specialty’s CMS code totals to the spreadsheet, calculate the percentages for each code for each of your doctors and the CMS average. Then use the data to create a bar chart like this*:

Analyze the results
In the example, the orange bars represent the distribution across all Medicare for each code for the specialty. Each of the other colors matches one of the five (hypothetical) physicians in our practice. Dr. Cochrane’s green bars are noticeably divergent from the CMS average – in fact, Dr. Cochrane is coding almost all new patient visits at 99202, and hasn’t used 99204 or 99205 at all. This looks unusual right off the bat – and suggests that perhaps Dr. Cochrane has been habitually choosing lower codes, perhaps mistakenly believing this helps avoid an audit. (It is generally believed that auditors will look for any variance versus the coding pattern they expect, even if the variance costs the payer less money.)

The other physicians are a bit closer to the expected pattern, but also skewed towards the lower level codes. Keep in mind that this alone doesn’t mean the coding is incorrect. Since we’re comparing against Medicare data, it’s important to keep in mind your own practice’s patient base. If you’re serving mainly younger patients, it’s likely that your utilization of higher level codes will and should be lower than the Medicare average. The main idea is that the divergence from the typical pattern means you should do further analysis.

Invest in refresher training
If providers have begun defensively under-coding, or are unsure about coding and documenting for E&M, a refresher on E&M rules may be a good next step. Experienced coding consultants can often design a custom program for your doctors, and the cost is generally quite reasonable – especially in comparison to the cost of consistently under-coding or an audit.

Remember, too, that this training should cover not just choosing the right levels, but also how to use modifiers properly and other tips to avoid denials. Established patient office visit codes have been the “champions” of denied claims for years now, and pediatric and adult primary care practices miss out on significant revenue and profit from these denials. Better coding can make almost any primary care practice more profitable.

Analyze preventive codes, too
While you’re analyzing the office visit codes, you can also learn a lot from analyzing your preventive visit codes. These cannot be compared against Medicare data, but the distribution of preventive visits for your practice reveals a lot on its own. The mix of ages can reveal if you need more marketing because your patients are aging out of your practice or if your recall efforts need to be stepped up for some age groups. New services or tests that can be part of preventive care are another way to encourage patients to get the preventive care their insurance offers.

*All data used in the example charts is fictitious, for illustrative purposes only. To download a spreadsheet with utilization formulas and CMS data for your specialty already entered, visit this page.

laurie-pic.jpgLaurie Morgan is the author of "People, Technology, Profit: Practical Ideas for a Happier, Healthier Practice Business," and the Management Rx series of e-books.
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