How Undercoding Affects Your Reimbursements

by | Published on Oct 3, 2013 | Medical Billing

How Undercoding
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Timely and proper reimbursement is crucial to the survival of your practice. If you are doing your medical coding on your own, it’s likely that one of the reasons for your falling revenues is undercoding.

It could be the fear of regulatory agency audits and the penalties that overcoding attracts that is leads you to undercode the services you provided. In 2008, Medicare reported that medical practices in all specialties lost as much as $236 million due to undercoding. The comprehensive error rate testing (CERT) program established by the Centers for Medicare & Medicaid Services (CMS) found in 2009 that inpatient follow-up consults which are coded as CPT 99261 are undercoded 17 percent of the time. Also, codes 99231-99233 which are assigned as subsequent care inpatient codes are included in the CERT’s top 20 list of claims that found to be undercoded.

Many practices lose money because they have undercoded services that could have been assigned higher codes based on documentation. For instance, in 2009, a study in the Southern Medical Journal reported substantial undercoding of office visits at three levels – about 33% of visits were undercoded based on written documentation, around 50% were undercoded based on the level of documentation at the medical decision making level, and about 80% were undercoded based on the total number of problems which the patient presented during the visit.

Typically, undercoding occurs for office/outpatient visit, established patient visits, office consultation, and hospital discharge day management. E&M services in family medicine practices are also likely to undercoded based on the actual level of service provided.

The problem is that undercoding happens at levels that do not show up in a simple audit of the documentation on office visit notes. Undercoding also comes about when you do not look at the problems that the patient mentions and when you fail to document the additional work that was done.

A basic understanding current procedural terminology (CPT), international classification of diseases (ICD-9) and healthcare common procedure coding system (HCPCS) is crucial for submitting accurate codes for services provided. As a physician, you wouldn’t be expected to have such knowledge.

The best way to reduce the dangers of undercoding and other coding issues is to rely on a professional medical coding company. Established companies have a team of medical coders with a thorough understanding of CPT, ICD and HCPCS codes including coding definitions, criteria, and rules. They can also help pinpoint the changes that need to be made in office visit notes to avoid undercoding.

Meghann Drella

Meghann Drella possesses a profound understanding of ICD-10-CM and CPT requirements and procedures, actively participating in continuing education to stay abreast of any industry changes.

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