Troubling Trend: A Hidden Requirement for Office Visits

By Michael G Calahan, PA, MBA

Medical Necessity.  By now, physicians and nonphysician practitioners (NPPs) are well aware of this undergirding concept, one establishing the foundation on which clinical services are reimbursed by third party payers.  The Centers for Medicare and Medicaid Services (CMS) uses ‘medical necessity’ as the basis for all allowed and paid provider services.  In fact, it is the law:  a provision in the Social Security Act states without ambiguity that all services “must be medically reasonable and necessary.”  In other words, in terms of medical care under CMS there are no “nice to have” services, only “need to have” services.  Ignoring medical necessity by coding and billing CMS for “nice to have” services might place the provider at risk for compliance violations.  And the oversight agencies that keep CMS itself and its jurisdictional entities in compliance have gotten quite aggressive in the last few years in widespread efforts to identify improper payments made to physicians and NPPs, operating numerous programs and auditing efforts to identify and recoup these perceived ill-gotten gains from providers.

To place the impetus for this aggression into context, the Comprehensive Error Rate Testing (CERT) program, an initiative that oversees the jurisdictional Part B Carriers and Medicare Administrative Contractors (MACs), disclosed staggering information related to such inappropriate payments:  in fiscal year 2009, approximately $1.1 Billion dollars were underpaid to providers while a whopping $24.1 Billion dollars were overpaid to providers.  Within the Recovery Audit Contractor (RAC) program, of which there are four recovery auditor entities currently deployed to directly audit and assess providers for mis-payments, an estimated $2.1 Billion dollars were improperly paid to providers (overpayments and underpayments, mostly to hospitals) during auditing efforts carried out from 2010 through-and-including the second quarter of fiscal year 2012.

One critical area of federal audit focus: the medical necessity of office visits and other similar “cognitive” services.  Both directly and indirectly, CMS is now searching provider medical record (MR) documentation for validation of medical necessity and at times, questioning and assessing the provider’s clinical judgment as it pertains to what was documented versus what was actually performed in the care of each patient.  For office visits, much of this third party assessment is predicated upon something called “Medical Decision Making,” or the actual documented cognitive portion of the visit.  It incorporates consideration of the patient’s diagnoses or signs/symptoms, the amount and complexity of the MR data under review, and the risk associated with diagnosing, studying, treating and/or managing the particular patient.

Office visits, inpatient hospital visits, consultations, nursing home visits and housecalls (among others) all make up what are termed “evaluation and management” (E/M) services, or the cognitive services that providers furnish to patients in need of evaluation, examination, assessment and treatment.  Where does Medical Decision Making come into play?  There are seven (7) major components of the usual E/M service; three (3) key components comprise the typical E/M cognitive service: History, Physician Examination and Medical Decision Making (MDM).  These key aspects must be evident from the chart notes not only to the treating provider but also to other providers accessing the chart, as well as to third parties such as QA and PRO reviewers, payers and federal chart auditors.  The other four (4) components are termed non-key or contributory factors, with “nature of the presenting problem” being one of the non-key components.  This particular contributory factor carries considerable weight in the deliberation of the final E/M level assigned.

The key components must be established in the MR documentation as having been addressed to some degree – it is that degree of evaluation and assessment that primarily drives the final E/M level and code assignment, e.g., 99201 – 99205 Office or Other Outpatient Visit, New Patient.  For new patients all three key components must be documented in the MR and support the E/M level assigned; for established patients, only two of the three key elements – whichever is most medically appropriate and/or best supported by the MR documentation – must be in evidence to assign a specific E/M level.  Therein lies the hidden requirement in a growing trend amongst Medicare carriers/MACs and CMS’ auditing minions:  with alarming frequency, these entities now require one of those two documented key components for established patients to be the MDM component.

This occult but spreading requirement flies in the face of established CPT coding tenets and E/M Documentation Guidelines, set forth in two versions: the AMA’s “1995” edition and CMS’ “1997” edition.  The two editions are distinguished primarily by the quantitative character of the 1997 criteria for various physical examinations addressing both general and specialty clinical areas, e.g., psychiatric exam.

Although the commotion around this issue has been seen and heard nationally, the names of two CMS jurisdictional entities frequently surface when speaking about medical necessity, E/M services and the occult MDM requirement:  Cahaba Government Benefit Administrators (Cahaba Medicare) and Pinnacle Business Solutions (Pinnacle Medicare).  It has been communicated by numerous physician practices that these two entities are enforcing the MDM hidden requirement, i.e., the MDM must be one of the selected key components for established office visits.  Both entities have been known to downcode and subsequently demand provider repayments following post-payment or CERT reviews by employing the MDM as the common denominator for establishing medical necessity.   If the MDM is missing from the documentation, the service is downcoded and repayment is demanded.  And it’s not surprising to find contradictory information published by these entities.  Pinnacle, on its website, has posted an FAQ addressing the matter by reporting: “Neither the 1995 nor the 1997 E&M Documentation Guidelines state more emphasis should be placed on the MDM component of the documentation when determining the level …” but then in a counter-position, posted another article germane to CERT audits revealing. “… the complexity of medical decision making is used as the primary indicator of the appropriate level of service.”  And although that particular article goes on to state each provider must follow the tenets of either the 1995 or 1997 E/M Documentation Guidelines, those guidelines – again – do not state that the MDM component must be one of the components documented for established patients.  The CERT reviewers’ pattern of downcoding, however, belies the entity’s true auditing approach to these E/M services.

In examining this trend more closely, the white elephant in the room is obviously the adoption and application of eMR.  In eMR modules specific to E/M services, often providers are prompted through the various elements comprising the three key components of any particular E/M service, whether they are all medically necessary to that particular visit or not.  For instance, the History component is comprised of four (4) major elements: chief complaint; past, medical and social history; review of systems, and history of present illness.  This highlights a continuing problem in this IT space:  often, once these templates have been completed by the treating provider, the E/M level calculated by the eMR system may not align itself to the undergirding medical necessity of the visit.  Herein lies the influence of the “nature of the presenting problem,” one of the non-key components of the E/M service.  A classic example of this is seen when the patient presents for a relatively minor problem and yet a high level E/M service is assigned.  For example, the provider evaluates a bruised phalange of the foot in an established patient with diabetes mellitus and  peripheral vascular disease.  While there are systemic concerns in this clinical scenario, the simple fact is that the patient has a “stubbed toe.”  Evaluation, assessment and treatment will probably be quite straightforward, provided all other diagnoses are stable and do not need addressing.  However, the eMR template might prompt the provider into a high level office visit, and it is this incongruity that has caused red flags to be raised throughout the federal payer arena.  Across the board, however, such services – even when medically necessary and substantiated by the MR documentation – are being downcoded due to the degree of MDM so documented.

“What should we do?”  This was the question posed following a seminar on E/M services, federal audits, and how to avoid the traps and pitfalls of such federal audit downcoding activity.  The advice is basic but pointed:  first, utilize the published CMS or jurisdictional E/M leveling tool (e.g., Highmark/Novitas Medicare and Trailblazer Medicare, among others, have E/M leveling tools downloadable from their websites).  Be wise to the fact that some tools differ; Trailblazer’s tool has an expanded MDM component.  Check the E/M levels with the official tool per the CMS jurisdiction.  Then, if the provider is correctly following the 1995 or 1997 E/M Documentation Guidelines, the E/M level is correct per the official leveling tool, and the MR documentation adequately supports the original code reported as well as the medical necessity of the visit but the E/M service was downcoded specifically due to what has been adjudged as inadequate MDM documentation, then “fight” the case.  Follow all established appeal and hearing avenues set forth by the auditing entity and/or the jurisdictional carrier/MAC.  The original MR documentation should act as the evidentiary support.  Get all judgments, proceedings and other germane information in writing from the auditing entity.  If necessary, and once all appeal efforts have been exhausted, utilize the last step in this process: the administrative law judge (ALJ) hearing.   A precedent must be set by the provider demonstrating he/she is compliant with E/M coding guidelines, even without formally counting the MDM as one of the two required key components.  Of course, this is not proffered legal advice and any particular provider unsure of federal processes, outcomes and/or repayment requirements should consult his/her own legal counsel.

While medical necessity must always be the predominant underpinning of the E/M service, the CPT coding parameters state that for established patients, only two of the three key components (for most E/M services) need to be documented, assessed and counted towards that final E/M level assigned.  The 1995 and 1997 E/M Documentation Guidelines do not contradict this coding tenet.  It is left up to the treating provider to document which of those key components is clinically most appropriate according to the evaluation and management rendered to the patient within the parameters and demands of each unique patient encounter.  Or, as CMS has stated in its own E/M Services Billing Guide (2012), “Physicians select the code for the service based upon the content of the service.”  But providers must be aware that CMS jurisdictional entities appear to be covertly usurping the provider’s judgment of the most important key components of the history, physical and MDM, and are trending towards requiring at least one of these documented elements to be the MDM component, which best establishes medical necessity and reinforces the nature of the presenting problem.

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