February 2004 Bulletin

OIG’s 2004 Work Plan introduced

Will it affect your practice?

By Margie Scalley Vaught, CPC, CCS-P, MCS-P and
reviewed by Robert H. Haralson III, MD

Each year the Office of Inspector General (OIG) releases its Work Plan looking for areas of fraud and abuse, as well as over-utilization in the Medicare Program and other federally funded programs. This article highlights several of the areas under review in 2004 related to the orthopaedic practice.

The OIG has been looking at the billing of consultation codes during 2003 and will continue its efforts into 2004. The Work Plan states:
“This study will determine the appropriateness of billings for physician consultation services and the financial impact of inaccurate billings on the Medicare program. In addition, we will determine the primary reasons for any inappropriate billings. In 2000, allowed Medicare charges for consultations totaled $2 billion.” (OEI; 09-02-00030 Expected Issue Date: FY 2003/2004)

One of the biggest areas where this could affect orthopaedic offices is in intra-office consultations. When it comes to reporting consultations for Medicare patients, the OIG follows the definition of group practice as outlined in the Medicare Carriers Manual Section 15501.H, which states “same specialty/ same group practice” is considered one.

When referencing Section 15506 Consultations, you will see that Medicare also links back to 15501.H as being one of the requirements for reporting consultations. Medicare currently recognizes Hand Surgeons as the only subspecialty in orthopedics.

So if one surgeon in your office does shoulders, another does knees and a third does feet, remember that these are not recognized as ‘subspecialties’ as outlined by Medicare. For a complete list of specialties recognized by Medicare, access Medicare Carriers Manual Section 2207. (Note: An article on this subject appeared in the October 2002 Bulletin.) reminding physicians/coders of the requirements for reporting consultation codes.

Coding of evaluation and management services
The OIG also will be looking at documenting and billing for the appropriate level of evaluation and management (E/M) visit codes. Remember that there are currently two sets of documentation guidelines — 1995 and 1997 — that can be used for coding. The Work Plan states:

“We will examine whether physicians accurately coded evaluation and management services, for which Medicare paid over $23 billion in 2001. We will also assess the adequacy of controls to identify physicians with aberrant coding patterns, specifically coding disproportionately high volumes of high-level evaluation and management codes that result in greater Medicare reimbursement. We will also assess the accuracy and carrier monitoring of evaluation and management coding.” (OEI; 00-00-00000; expected issue date: FY 2005)

The OIG Compliance programs that came out in 1996 included more information on upcoding and a reminder: “HIPAA 1996 added another civil monetary penalty to the OIG’s sanction authorities for upcoding violations. (See 42 U.S.C. 1320a-7a(a)(1)(A).)”

Whether you are upcoding or downcoding, both can cause problems. The Federal Register dated March 16, 2000, states:

“Knowingly misrepresenting the nature or level of services provided to a Medicare beneficiary to circumvent the program’s limitation is fraudulent. Although the OIG is not suggesting that each and every survey citation or failure to meet the applicable standard of care is a per se violation of the False Claims Act (or a criminal, other civil, or administrative violation), knowingly billing for nonexistent or substandard care, items, or services may give rise to criminal, civil, and/or administrative liability.”

The government is not talking about honest mistakes that can be made from time to time. The April 26, 2000 Federal Register, addressed this issue:
“Sanctions may only be imposed against those who act in ‘deliberate ignorance’ or with ‘reckless disregard’ of the truth or falsity of information specified on claims. A physician whose documentation fails to support the level of service submitted for a service code would not be subject to CMP liability unless he or she specifically acted in ‘deliberate ignorance’ or ‘reckless disregard’ of the truth or falsity of the claim.

Honest or inadvertent billing or coding mistakes will not be the basis for the imposition of CMPs. In addition, CMPs may be imposed only where a ‘pattern’ of improper claims with upcoded procedures or unnecessary services exists. Sanctions will be imposed only in appropriate cases where a ‘pattern’ of upcoding or billing for unnecessary services has been identified.”
Documentation is going to be the key in correct level selection, along with internal and external records audits.

Modifier –25
The usage of modifier –25 has continued to increase over the years since the government developed the Correct Coding Initiative (CCI) in 1996. Appending modifier –25 to an E/M service when performing a procedure, such as an injection, allows the reimbursement of the E/M in addition to the injection.

However, in order to support the appending of the modifier –25, there needs to be a significant, separately identifiable E/M service along with the medical necessity for that service. The OIG added this information to the Work Plan:
“We will determine whether providers used modifier –25 appropriately. In general, a provider should not bill evaluation and management codes on the same day as a procedure or other service unless the evaluation and management service is unrelated to such procedure or service. A provider reports such a circumstance by using modifier –25. In 2001, Medicare allowed over $23 billion for evaluation and management services. Of that amount, approximately $1.7 billion was for evaluation and management services billed with modifier –25. W e will determine whether these claims were billed and reimbursed appropriately.” (OEI; 07-03-00470; expected issue date: FY 2004)

Chapter One of the CCI edit guidelines under Modifiers states, “E & M service beyond the usual pre-procedure, intra-procedure, and post-procedure physician work, the E & M may be reported with the –25 modifier appended. The E & M and procedure(s) may be related to the same or different diagnoses.”

This tends to indicate that in order to report a separate E/M service the documentation must be more than that of a problem-focused nature and/or having a previous knowledge that the patient was coming in for the given procedure. If the physician told the patient to return in a week for a repeat injection, it is going to be very difficult to support a significant, separately identifiable E/M service, because the patient was told to return for the injection.

Bundling issues
In addition to modifier –25, OIG will also be focusing on the appropriate use of modifier –59, ‘Distinct Procedural Service.’ The Work Plan states:
“We will determine whether claims were paid appropriately when modifiers were used to bypass National Correct Coding Initiative edits. The initiative, one of CMS’s tools for detecting and correcting improper billing, is designed to provide Medicare Part B carriers with code pair edits for use in reviewing claims. A provider may include a modifier to allow payment for both services within the code pair under certain circumstances. In 2001, Medicare paid $565 million to providers who included the modifier with code pairs within the National Correct Coding Initiative. We will determine whether modifiers were used appropriately.” (OEI; 00-00-00000; expected issue date: FY 2004)
This particular area may cause many offices to rethink their procedural coding. If the CCI edit states that certain codes are considered ‘inclusive,’ reporting them separately to Medicare may cause problems.

The AAOS has developed The Complete Global Service Data for Orthopaedic Surgery to assist orthopaedic surgeons in this bundling issue. This two-volume publication is updated every February and lists what is considered included and excluded in a given CPT procedural code.
CCI states that modifier –59 is “used to identify procedures/services that are not normally reported together, but are appropriate under the circumstances.

This may represent a different session or patient encounter, different procedure or surgery, different site or organ system, separate incision/excision, separate lesion, or separate injury (or area of injury in extensive injuries) not ordinarily encountered or performed on the same day by the same physician.”

When in doubt, double-check the AAOS publication regarding included vs. excluded. If AAOS states the procedures are included, then modifier –59 may not be appropriate.

Diagnostic tests
This issue could affect those offices that are performing nerve conduction studies (NCS) in their offices. The Work Plan states:

“We will assess the medical necessity of diagnostic tests, such as nerve conduction studies, performed by physicians. Medicare covers a range of diagnostic tests, including nerve conduction studies, which are electrodiagnostic tests of the integrity of peripheral nerves. Medicare-allowed amounts for nerve conduction studies increased from $136 million in 2000 to $186 million in 2001—approximately 37 percent. We will determine the cost of any medically unnecessary and incorrectly paid nerve conduction studies.” (OEI; 00-00-00000; expected issue date: FY 2005).

Make sure that all supporting medical necessity is documented and appropriate indications are given for ALL tests ordered and/or performed. If you are performing NCS in your office and are using handheld units, make sure that they meet the requirements of Medicare for reporting the nerve conduction study. The device needs to be able to report more then just sensory data; if it does not, then this testing would fall under HCPCS code G0255, “Current Perception Threshold/Sensory Nerve Conduction Threshold test (sNCT), per limb, any nerve,” which is not covered by Medicare.

Remember, these are not all the areas that the OIG will be scrutinizing in 2004. For more information, please refer to the resources below.


1. OIG Work Plan 2004 (http://oig.hhs.gov/publications/workplan.html#1)
2. Medicare Carriers Manual (http://cms.hhs.gov/manuals/14_car/3btoc.asp)
3. The Federal Register, March 16 and April 26, 2000
4. Correct Coding Initiative (http://www.cms.hhs.gov/physicians/cciedits/nccmanual.asp)

Margie S. Vaught, CPC, CCS-P, MCS-P, ACS-OR, is an independent coding specialist in Ellensburg, Wash. She has served as a member of the American Academy of Professional Coders’ National Advisory Board. She can be reached at vaught@kvalley.com.

Robert H. Haralson III, MD, MBA, is the medical director of Southeastern Orthopaedics in Knoxville, Tenn. He is the chair of the AAOS CPT and ICD Coding Committee, the CPT advisor for the Academic Orthopaedic Society and has taught courses on the use of AMA Guides, CPT, the use of computers in medicine and disability medicine.

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