Why Are We Complaining about ICD 10? The Cost of Non-Compliance (Again)

June 16th, 2014 / By Barbara Aubry, RN

In my May blog, I talked about the cost of non-compliance versus the cost of implementing ICD-10. My hypothesis: human nature is the real cost driver in health care – not code set changes. A recently released study by OIG revealed that physicians increased the billing of all E/M (Evaluation and Management) services from 2001 to 2010 (the years studied). The higher the level of E/M codes assigned, the greater the reimbursement. CMS found that E/M services are 50 percent more likely to be paid in error than other Part B services. Why? Because they are coded to a higher level which results in more money paid to the provider – physician and non physician alike. CMS identified the root cause of the overpayments – no surprise here, coding error and poor documentation.

OIG found that Medicare overpaid 6.7 billion dollars – yes, that is ‘b’ as in billions – for “incorrectly coded” E/M claims that lacked documentation to support the level billed. This overpayment represents 21 percent of Medicare payments for 2010. The OIG audit found 42 percent of claims for E/M services in 2010 were incorrectly coded. Not surprisingly, they found both over and under coding. 19 percent of the records they reviewed were missing documentation to support the service.

OIG found the claims from ”high coding” providers were more likely to be incorrectly coded or insufficiently documented than claims from other providers. Why I am not surprised?  OIG’s report is quite telling and worth a look.

My take

I love human nature – it’s so predictable. Reduce reimbursement you say? Fine, I will simply increase the complexity of the codes I bill to get paid more OR I will spend less time on each case and document next to nothing. Not fair you say? All is fair in love and war! Or seemingly medical claims submission. On the flip side, there are the folks so terrified of audit they routinely under code hoping that by ducking, they will avoid scrutiny. What they really avoid is getting fairly reimbursed for their work.

Coding and documenting evaluation and management is not rocket science. The rules have not changed since 1997. I think this is simply human nature at work; some high fliers feel the need to take advantage of the system since it’s pretty easy to game. Perhaps the system needs to demand better behavior. Could every practitioner sign an ethics agreement and promise compliance? Perhaps more sanctions need to be applied? How about medical schools demanding proficiency in documentation in order to graduate? I don’t know; folks smarter than I am need to focus on this issue. The system can’t afford non-compliance. It is time to look forward and improve, not wallow in our insufficiencies.

Barbara Aubry is a Regulatory Analyst for 3M Health Information Systems.