RAC Audits of E/M Services Set to Begin in 15 States

According to CMS, its recovery audit contractors (RACs) are scheduled to begin auditing claims that contain higher-level CPT codes for evaluation and management (E/M) services based on recommendations from the HHS Office of Inspector General (OIG). Physicians who practice in region C of CMS' RAC program will be the first to undergo the latest in a series of RAC audits that will, in this instance, focus on claims using higher-level E/M codes -- specifically, CPT codes 99214 and 99215 -- which frequently are billed by family physicians.

Region C is made up of 15 states, Puerto Rico and the U.S. Virgin Islands. Specifically, the states immediately affected are Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.

However, physicians in other states should be on alert, as well, because the E/M code audit process is scheduled to be expanded to the other three RAC regions.

The new audits are the result of a report (39-page PDF; About PDFs) the HHS OIG issued in May titled Coding Trends of Medicare Evaluation and Management Services. Authors of that report encouraged CMS to audit E/M codes because, they noted, "E/M services have been vulnerable to fraud and abuse."

In a summary of that same report, the OIG noted that between 2001 and 2010, payments for Medicare Part B goods and services increased by 43 percent, from $77 billion to $110 billion. However, during the same time, Medicare payments for E/M services increased by 48 percent, from more than $22 billion to more than $33 billion.

According to the OIG, it was able to look at Part B claims data and then identify individual physicians who frequently billed the more expensive and complex E/M codes, including 99214 and 99215, in 2010. However, the OIG did not make any determination as to whether the claims were appropriate.

The OIG said it identified 1,700 physicians who "consistently billed higher E/M codes in 2010." Physicians billing higher E/M codes were not grouped in any particular state or region and treated Medicare patients of similar ages and with similar diagnoses as physicians who coded claims with lower-level E/M codes.

"Overall, physicians who billed for E/M services represented 66 specialties, with most specializing in internal medicine, family practice and emergency medicine," said the OIG report. "Physicians who consistently billed the two highest-level E/M codes collectively represented 80 percent (53 of 66) of those specialties. Of these physicians, the majority also specialized in internal medicine, family practice and emergency medicine."

The OIG found that among physicians who consistently billed higher-level E/M codes, 19.8 percent were internists, 12.2 percent were family physicians, and 9.9 percent were in emergency medicine.

There has been speculation on some fronts that the government's push for more robust health information technology -- and a resulting physician reliance on electronic health records (EHRs) -- has contributed to an increase in higher-level E/M codes because physicians are better able to document the time they spend with patients.

However, a separate OIG study does not support that argument. On June 21, the OIG released results of a study (19-page PDF; About PDFs) that looked at the use of EHRs in 2011 by 2,000 randomly selected Medicare participating physicians who provided at least 100 E/M services in 2010. Physicians were asked if they used an EHR to document services, and, if so, they were asked to provide the name of the system and state whether their EHR was certified.

According to a study summary, the OIG found that 57 percent of the physicians surveyed used an EHR at their primary practice location in 2011, and that three of every four physicians with an EHR used a certified system to document E/M services.

However, wrote the authors, "Although many EHR systems can assist physicians in assigning codes for E/M services, we found that most Medicare physicians manually assigned E/M codes."