Getting Paid

Identifying Patterns of Over- and Undercoding


Recent research shows the common situations under which family physicians tend to code too high and too low.

Fam Pract Manag. 1999 Nov-Dec;6(10):12-13.

Reimbursement and billing regulations have undergone significant changes in recent years, including yet-uncertain changes in the evaluation and management (E/M) documentation guidelines. An increase in administrative oversight, especially of Medicare billing practices, has accompanied many of these changes, yet very little is known about the accuracy of physicians' CPT coding.

Proper coding of professional visits is a critical element of accurate billing, which is important for both financial and compliance reasons. Undercoding can result in lower vices provided; overcoding can be interpreted as fraudulent. By understanding which types of visits tend to result in under- or overcoding, physicians can focus their efforts to improve the accuracy of coding.

Findings from the research

To understand coding and billing by family physicians for outpatient visits, an analysis was done of data from the Direct Observation of Primary Care (DOPC) study.1 (For more information on the DOPC study, see “Illuminating the ‘black box’ of primary care.”) In this analysis, research nurses trained to use CPT coded 3,791 visits based on direct observation. The billing level assigned by family physicians was compared with those assigned by research nurses for the same visits.

In 55 percent of the visits, coding by the research nurses and physicians was exactly concordant; in less than 4 percent of the visits, coding by the nurses and physicians differed by more than one code. This suggests that physicians are generally accurate in their coding.

Of the 45 percent of visits in which the physicians' codes disagreed with the research nurses' codes, overcoding and undercoding occurred at similar frequencies. Undercoding was more likely in the following situations:

  • The visit was longer;

  • The visit involved a lower percentage of time spent planning treatment;

  • The visit resulted in a referral;

  • The patient was a child.

  • Overcoding was more likely in these situations:

  • The visit was shorter;

  • A greater percentage of time was spent planning treatment;

  • A greater percentage of time was spent chatting with the patient;

  • A greater percentage of time was spent on preventive services;

  • Well care was the main reason for the visit;

  • A medical student was present;

  • No referral was made;

  • No drugs were prescribed.

In addition, visits with patients who had fee-for-service insurance were more likely to be coded accurately.

Take-away lessons

The findings indicate that family physicians tend to undervalue the time they spend in longer visits that have less focus on treatment. In addition, family physicians tend to overcode for visits that are focused on prevention or treatment, more social, less complicated or shorter. They may also mistakenly include in their charges time they spent with a student discussing the encounter.

This information can be a springboard for considering the types of visits that you may undervalue or overvalue in billing for patient services. An increased awareness of coding practices can help assure fair reimbursement and enhance protection from auditors. The AMA and HCFA are collaboratively working on guidelines that, hopefully, will be more user-friendly for physicians.

Illuminating the ‘black box’ of primary care

This article continues our series offering practical lessons from the Direct Observation of Primary Care (DOPC) Study, which was funded by the National Institutes of Health and conducted by the Research Center to Investigate the Value of Family Practice, with support from the AAFP. The study demonstrates the complexities of the patient visit, the demands of real-world practice and the value of primary care, issues that policymakers, the public and even clinicians have not fully understood. Researchers used a multi-method approach, including direct observation, to study 4,454 patient visits to 138 family physicians in 84 practice sites.

Dr. Kikano is an associate professor and vice chairman of family medicine at Case Western Reserve University/University Hospitals of Cleveland (CWRU/UHC). Dr. Chao is an associate professor of family medicine at CWRU/UHC. Robin Gotler is project coordinator in the Family Medicine Research Division of CWRU. Dr. Stange is a professor of family medicine, epidemiology and biostatistics, oncology and sociology at CWRU/UHC. He is also director of the Research Center to Investigate the Value of Family Practice, one of three family practice research centers funded by the AAFP.


1. Chao J, Gillanders WR, Goodwin MA, Stange KC. Billing for physician services: a comparison of actual billing with CPT codes assigned by direct observation. J Fam Pract. 1998;47:28–32.


Copyright © 1999 by the American Academy of Family Physicians.
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