Audits by Jeff Randolph - PowerPoint Presentation

					Chiropractic Coding,
Audits, & Compliance
      Jeffrey Randolph, Esq.
         T: 201-505-1733
    Current Procedural Terminology
             (CPT) Codes
   CPT is the coding language spoken between all health
    care providers and insurance companies that allows
    reimbursement for services rendered.
   There are over 7,500 CPT codes but chiropractors
    typically only use 25-30 codes the majority of the time in
    daily practice.
   Chiropractic Manipulative Treatment CPT Codes were
    established around 1996-97.
   A “modifier” is a numeric or alphabetic appendage to a
    CPT code which notifies the payor that the code does
    not meet the exact CPT definition. (i.e. CPT 99201-25)
            CPT Codes (cont’d)
   CPT Codes are updated by the AMA CPT
    Editorial Panel.
   The panel consists of:
       11 physicians from the AMA;
       4 Members from the insurance carriers and
        Hospital Association;
       2 Members from the Healthcare Professionals
        Advisory Committee
    National Correct Coding Initiative
   The NCCI is a federal program that
    establishes a system of coding edits used
    across the nation by Medicare.
   The NCCI determines which codes for
    Medicare reimbursement purposes should
    not normally be separately reimbursed
    and “bundles” their reimbursement
     ICD-9-CM Diagnosis Codes
   International Classification of Disease Clinical
    Modification is a standardized coding of patient
   You must place the appropriate ICD-9 diagnosis
    codes in Box #21 of the CMS-1500.
   Your diagnosis codes must support the billing
    codes you use. I.e., if you bill for an extra-
    spinal shoulder adjustment, a shoulder diagnosis
    must be issued and linked to the procedure
    CPT Codes for Chiropractors
   There are three major general classifications of
    codes chiropractors typically bill:
       1) Evaluation & Management (E/M)
            e.g. 99201 – new patient eval.
       2) Chiropractic Manipulative Therapy (CMT)
            e.g. 98942 – 5 region manip.
       3) Physical Modalities
            e.g. 97012 – mech traction
    Evaluation & Management (E/M)
   New Patient E/M: 99201-99205

   Established Patient E/M: 99211-99215

   Patient Consultation E/M: 99241-99245
             New Patient E/M
   Used when you first treat a patient that is
    not a consultative referral.
   A patient is “new” if they have not
    received care by you or your group
    practice within the past 3 years.
   Three major components:
      1) History;
      2) Exam;
      3) Medical Decision Making
          New Patient EM Levels 1-5
   CPT   HISTORY               EXAMINATION           MDM

   99201 Problem-Focused       Problem Focused       StraightFor.

   99202 Expanded P-F          Expanded P-F          Straightfor

   99203 Detailed              Detailed              Low Complex

   99204 Comprehensive         Comprehensive         Mod. Complex.

   99205 Comprehensive         Comprehensive         High Complex.

   (NOTE: Time spent is no longer a key component since 1992)
      E&M for Established Patients
                (CPT 99211-99215)

   Any patient treated by your or your group
    practice in the past 3 years.

   Should be performed every 12 visits or 30
    days (not every visit).

   May be used with new or established patients.
   Patient must be referred to you by another
    practitioner for your professional opinion.
   Same 3 key components (History, Exam, Medical
    Decision Making)
   Must send a written report to referring
   Must identify referring practitioner in Box 17 of
    CMS-1500 & UPIN in Box 17a.
Chiropractic & Physical
      Chiropractic Manipulation
   CPT Manual divides the spine into 5
   Five Spinal Regions:
        1)   Cervical (including atlanto-occipital joint)
        2)   Thoracic
        3)   Lumbar
        4)   Sacral
        5)   Pelvic
        Extra-Spinal Manipulation
   The AMA CPT Manual divides the body
    into 5 extra-spinal areas:
       1)   Head (including TMJ)
       2)   Lower Extremity
       3)   Upper Extremity
       4)   Rib Cage
       5)   Abdomen
      Primary Chiropractic Codes
   CPT 98940: 1-2 Region CMT

   CPT 98941: 3-4 Region CMT

   CPT 98942: 5 Region CMT

   CPT 98943: Extraspinal (1 or more regions)

   NOTE: Medicare only reimburses for CPTs 98940-98942.
           When Billing a CMT & Extraspinal on same visit, use modifier -51 on the
            extraspinal (i.e. 98943-51).
                 CMT & E/M Billing
   If E/M and CMT are performed on the same
    date, bill with a modifier -25 to indicate a
    significant separately identifiable service

   AMA CPT Manual: CMT codes include a pre-manipulation patient
    assessment. Additional E/M services may be reported separately
    using the -25 modifier, if the patient’s condition requires a
    significant, separately identifiable E/M service, above and beyond
    the usual pre and post-service evaluation associated with the
                 Common Modifiers
   Refer to the AMA CPT Manual

   Modifier -25: Separately Identifiable Procedure.
           i.e. 99213-25 when billed with 98940

   Modifier – 52: Reduced Services.
           i.e. 97140-52 for less than 15 minutes

   Modifier – 59: Distinct Procedural Service
           i.e. 98943-59 when billed with 98940
Adjunctive Physical
           Physical Modalities
   Defined as: “any physical agent applied to
    produce therapeutic changes to biological
    tissue including but not limited to thermal,
    light, acoustic, mechanical or electrical
   Also used to enhance, facilitate and
    prolong the effects of the spinal
                Physical Modalities
   Broken down into two major categories based upon providers level
    of interaction with patient:
       1) Supervised
       2) Constant Attendance

   General Rules:
       1) Time-based
       2) Must prove functional improvement.
       3) CCI edits may apply
       4) Medicare does not reimburse
       5) Some carriers may limit the number of modalities reimbursed per
        visit (i.e. 2 per visit)
       6) In No-Fault States, most CMT & modalities included in daily cap for
        reimbursement (i.e. NJ - $90 daily cap).
    Supervised Physical Modalities
                            (Passive Therapies)

   The application of a “supervised” modality does not require direct
    (one on one) contact between the provider and patient. May be
    billed only once per encounter as they are not time based.
   Primary Supervised Codes:
            CPT 97010   – Hot / Cold Packs
            CPT 97012   – Mechanical Traction
            CPT 97014   – Elec. Stim, unattended
            CPT 97016   – Vasopneumatic Devices
            CPT 97018   – Parrafin Bath
            CPT 97022   – Whirlpool
            CPT 97024   – Diathermy
            CPT 97026   – Infared
            CPT 97028   - Ultraviolet
       Physical Modalities Requiring
          Constant Attendance
                              (Passive Therapies)

   Application of these modalities require direct (one-on-one) contact
    between the patient and the provider. Time based procedures and
    must follow timing guidelines.

   Primary Constant Attendance Modalities:
            CPT 97032 – Elec. Stim. (attended)
            CPT 97033 - Iontophoresis
            CPT 97034 – Contrast Baths
            CPT 97035 – Ultrasound
            CPT 97036 – Hubbard Tank
            CPT 97039 – Unspecified Phys. Modality
                     e.g. Low Level Laser
   AMA CPT Guidelines:
       1 Unit: 15 minutes
       If < 15 minutes, use modifier -52 and reduce billed

   CMS (Medicare) Guidelines*
       1 Unit: 8-22 Minutes
       2 Units: 23-37 Minutes
       3 Units: 38-52 Minutes

       * Does not include pre and post manipulation work.
                Therapeutic Procedure Codes
                                      (Active Therapies)

   Application of these modalities require direct (one-on-one) contact between the patient and the
    provider. Active therapies as opposed to previous therapies which are passive.

   CPT 97110: (Therapeutic Exercises) Used to develop strength, endurance, range of motion, and
    flexibility. (i.e. treadmill, isokinetic exercise, lumbar stabilization exercises, gymnic ball).

   CPT 97112: (Neuromuscular Re-Education) Used to increase balance, coordination, kinesthetic
    sense, posture, and proprioception.

   CPT 97113: (Aquatic Therapy) with therapeutic exercises

   CPT 97116: (Gait Training) including stair climbing

   CPT 97124 (Massage Therapy) Effleurage, petrissage, tapotement. A more passive procedure
    for restorative response.

   CPT 97140 (Manual Therapy Techniques) Mobilization, manual lymphatic drainage, manual
    traction,trigger point therapes, myofascial release.
    Therapeutic Procedure Codes (cont’d)
   CPT 97150: (Group Therapeutic Procedures) for a group of 2 or
    more patients report 1 unit for each patient. Billed once per session
    regardless of time.
            Does not require one-on-one patient contact but does require
             constant attendance.
            i.e. Neuromuscular reeducation in a group setting (use 97150 in
             place of 97112)

   CPT 97530: (Therapeutic Activities): use of dynamic
    activities to improve functional performance. Requires
    one-on-one patient contact. Used when multiple
    parameters are involved including balance, strength, and
    range of motion. Must be related to a functional activity
    and functional improvement expected.
            Billed in 15 minute increments.
               Other Procedures
   STRAPPING- treatment to stabilize an
    injury and/or afford comfort to the patient
       CPT   29200   –   Thorax
       CPT   29220   –   Low back
       CPT   29240   –   Shoulder
       CPT   29260   –   Elbow or wrist.
       CPT   29280   –   hand or finger
              Diagnoses & Coding
   The proper diagnoses and order they are inputted on the CMS-1500
    form will prevent unnecessary denials.

   The diagnoses that you assign directly relates to the level of care
    deemed medically necessary by UM reviewers. Your ICD-9 codes
    trigger a computer database which allows a programmed level of

   You need to relate your diagnoses (Box 21) with the CPT Code
    Diagnoses reference (Box 24e) you put on the form.

   For Medicare, you must diagnose a subluxation to be reimbursed.

   Always carry out your ICD-9 diagnosis codes to the 4th or 5th digit
    and do not use non-specific or non-classified codes.
          Updating Diagnoses
   As the patient’s condition improves from
    treatment, you must periodically re-
    evaluate the patient’s condition and
    update your diagnoses.
Documenting Medical Necessity
   Documentation is key to back up your treatment and

   Use the Standard SOAP format modified to SOAAP by
    adding an extra “A” for Activities of Daily Living.

   Medicare follows the “PART Format:
       “P” ain / Tenderness
       “A”symmetry / Misalignment
       “R” ange of motion
       “T” issue / tone changes
                   Medical Necessity
                  Documentation Tips
   Documentation is key! An insurance adjuster must be
    able to see what you see of the patient.

   1) Document how symptoms impact activities of daily
   2) Document goals for the patient and establish a
    reasonable timeline to reach those goals;
                 e.g. Patient will increase tolerance to sit for up to 60 minutes within the
                  next four weeks.
   3) Document the patients progress toward those goals in
    the daily SOAAP notes.
   4) Update your treatment plan every 30 days or 12 visits
    or any time there is a significant change in the patient’s
           i.e. exacerbation, new injury, discharge exam.
    Medical Necessity Documentation
              Tips (cont’d)

   5) Document functional measurements
    (i.e. Range of Motion) to document
    patient’s progress.

   6) Document measurements, comparison
    data, test results, co-morbidities, etc to
    paint a picture of what is going on with
    the patient.
       Expected Medicare CMT

   CPT 98940: 40%

   CPT 98941: 45%

   CPT 98942: 15%
    Medical Necessity Documentation
              Tips (cont’d)

   7) Full spine adjustments: You should
    prioritize your adjustment and code for
    the primary area of concern.

   8) Do not upcode or downcode your
    services as this is insurance fraud. Make
    sure your documentation supports your
 Audit Red Flags
Establishing Your Compliance
                  Red Flag #1
   Billing a 98941 or 98942 on every patient each
    visit because you are a full spine doctor:

   The insurance companies only want you billing
    for areas that the patient complained of, or
    where you diagnosed a problem and have
    objective findings. If you bill for an area where
    there is no problem or subluxation, it is
    considered up-coding.
                 Red Flag #2
   Full spine x-rays on each and every patient on the
    initial exam and then again as a re-check:

   Performing and billing these on every patient
    when there is no complaint or diagnosis in each
    spinal region. Re-x-raying all areas in order to
    view a patient’s “progress”. Only bill for x-rays
    which are considered “medically necessary”, and
    perform the minimum views needed to gauge a
    patient’s progress.
             Red Flag #3
   Billing out a 97140 manual therapy in place
    of a manipulation code because it pays

   If an insurance company does not see a
    manipulation code and only therapy codes
    a red flag might be triggered.
                 Red Flags # 4
   Billing an E/M code on each visit: 99211-5.

   In order to bill out an established patient 2 of the 3
    key components have to be fulfilled.

   If in fact you did not fulfill 2 or 3 of the 7 it should
    not be billed.
               Red Flag #5
   All new patients are billed as a 99204
    or 99205: these are complex
    examination codes that are used but
    not as frequently in a chiropractic office
                 Red Flag #6
   Billing for both a spinal and extremity
    adjustment on each patient:

   This sets up a pattern.

   The insurance companies knows that not
    every patient is going to need an extremity
    adjustment unless you’re a chiropractor for a
    sports team.
               Red Flag #7
   Spending less time than the
    guidelines state when doing timed
    codes: codes requiring 15 minutes
    of contact time with the patient
    require 15 minutes of time spent
    with them. Spending less time
    requires the use of a 52 modifier.
                    Red Flag #6

   Billing for attended electrical stimulation
    when in fact it was unattended:

   Bill the actual code that best describes the
    service performed.

   NEW PIP Regs:
       Unattended stimulation must now be reported
        using HCPCS Code G0283 which is part of the $99
        cap & not separately reimbursed.
                 Red Flag # 9
   Ghost billing:

   Billing insurance company when the
    patient wasn’t even in the office.

   This is per se fraudulent billing & will
    earn you an orange jumpsuit.
              Red Flag # 10
   Billing a new patient code if you have
    seen a patient within the last 3 years.

   You should bill the established patient
    E&M codes.

   This applies even if the patient has an
    auto accident, work injury, new insurance
    carrier, etc.
              Red Flag # 11

   Not collecting co-payments or

   If you are waiving co-pays or
    deductibles, have your patient sign a
    financial hardship form.
             Red Flag # 12

   Separating the diagnostic global
    fee into professional and technical

   Both components are included in
    the code and you should not un-
    bundle them .
               Red Flag #13
   Advertising free consultation and then
    billing out a new patient E/M code for the

   In New Jersey, you must put the
    approximate value of the free exam and
    cannot bill for services on the same day
    without a waiver form signed.
              Red Flag # 14

   Billing for manual therapy (97140),
    neuromuscular re-education (97112), or
    massage (97124) in the same area as
    the spinal adjustment on the same day.

   Insurers consider these as redundant
    when performed in the same area on the
    same visit.
             Red Flag # 15

   Multiple or on-going passive
    modalities (97010-97039).

   Patients should be progressed to
    active care as their treatment
    progresses (97110-97530).
               Red Flag # 16

   Services rendered beyond maximum
    therapeutic benefit or billing for
    maintenance/preventive care.

   Insurance companies will pay for therapeutic
    or supportive care which has a defined
    clinical end point.
            Protecting Yourself

   2) If you bill a five region CMT code, make sure
    your SOAP notes support all five regions.

   3) Make sure your notes support any extra-
    spinal manipulation.

   4) Make sure level five consults meet CPT
    Manual Criteria (
          Compliance – Audit Exposure

Drilldown into CPT Code for all claims within the    Red, if max times/pat > limit.
selected provider period set with month of service
                                                     Orange, if max times/pat = limit.
= October 2005, and CPT code = 99201.
                                                     Drilldown for all patients with CPT code = 98941 and
                                                     max times/pat = 25 times.
   Compliance – Audit Exposure

                                              If max times/pat > limit, drilldown for all patients above the limit.
                                              (e.g., if limit = 15, drilldown for all patients with 98941 18 times in
                                              that month)

                                              If max times/pat < limit, drilldown for all patients that are at the max.
                                              (e.g., if limit = 15, and current max/pat = 12, drilldown for all patients
                                              that have with 98942 12 times in that month)

The drilldown into CPT Code returns all claims
within the selected provider period set with that
month of service and CPT code.
                  Bill S. 2824
   1) Took effect July 11, 2006. Regulations are
    still being written by DOBI.
   2) Limits post-payment review look backs to 18
    months except in the case of fraud or a pattern
    or inappropriate billing or claims.
   3) Insurers must post on the internet all clinical
    guidelines relied upon in utilization management
    and they may only be used as a screening tool.
   4) UM denials must be made by a practitioner
    licensed in NJ.
             Bill S. 2824 (cont’d)
   5) Insurers have 15 days maximum to respond
    to authorization requests or the request is
    deemed approved.
   6) If care is properly preauthorized, insurer
    cannot later deny reimbursement absent fraud
    or misrepresentation.
   7) Insurer cannot change any diagnostic codes
    without written justification.
   8) External appeal program remains for medical
    necessity appeals with interest rate raised from
    10% to 12%.
                    Bill S. 2824 (cont’d)
   9) New binding arbitration system set up (similar to PIP) for non-
    medical necessity appeals with award of attorneys fees and costs.
            A) 90 days to file from receipt of denial;
            B) Must be at least $1,000 in issue.
            C) DANGER – arbitrator can award insurer a refund plus 20% interest if they
             find doctor engaged in a “pattern and practice of improper billing.”
   10) Insurer can be assessed a penalty of $10,000 per day for
    violating the Act.
   11) Insurers cannot use “extrapolation” of data in post-payment
    reviews unless:
            A) A lawsuit or arbitration is filed;
            B) An administrative proceeding is initiated;
            C) There are altered / reconstructed records or a material number of records
             are unavailable;
            D) There is clear evidence of fraud & the insurer refers the matter to the
             Office of Insurance Fraud Prosecutor.
                Bill S. 2824 (cont’d)
   12) Claim Blocks are permitted.
          A) Can delay imposition of block by appealing and
           arbitrating except in the case of fraud referral to
   13) Post-Payment audits can be submitted
    to binding arbitration following an internal
        A) Must appeal within 45 days and exhaust
         internal appeal process.
        B) DANGER – extrapolation allowed.
         What Do I Do if Audited?
   1) Cooperate with the audit – stonewalling will get you a more
    intense audit.

   2) Don’t volunteer information or talk substance with the auditors.

   3) Do not ever “touch up” or otherwise change your notes or chart.

   4) It is your job to ensure auditors get all of your supporting

   5) Only send notes for the time frame being audited and do not
    send original, only copies.
    What to Do if Audited (cont’d)
   6) Avoid the audit in the first place by avoiding the audit
    red flags.
           Billing Precision offers automatic audit flagging of your claims.
           Set up a compliance program in your office to ensure proper coding
            and compliance with laws and regulations.

   7) Prepaid Audit Defense Plan
           Many general prepaid legal plans exist but only one deals
            specifically with audit defense.
           Your malpractice and general liability insurance policies do not
            cover audit defense legal fees and costs, leaving you fully exposed
            to audit liability.
           An audit prepaid defense plan does not indemnify you for any
            monies you ultimately owe based upon an audit, but provides free
            and discounted legal defense coverage and financial preventive care
            for your practice.
Compliance Programs
   What does implementing a compliance
    program entail?
       Performing a baseline audit on your practice.
       Preparation of a self-audit report and
        recommendations to bring office into compliance.
       Incorporating self-audit results into an office
        compliance manual.
       Training yourself and staff on compliance
        standards through team meetings.
       Ongoing monitoring of your practice compliance.
   Tell me more about the baseline self-audit.
          Your office fills out a comprehensive compliance
           questionnaire regarding your billing practices, practice
           structure, network affiliations, etc.
           An attorney and a certified coding expert with experience in
           chiropractic coding and billing will come to your office to go
           over the questionnaire and have the coder review a random
           sampling of patient files.
          All network participating provider contracts are reviewed by
           the attorney and relevant provision summarized.
           A baseline audit report will be written by the attorney
           incorporating the findings of the baseline audit and making
           specific recommendations to reduce your practice exposure.
   (cont’d)
        A conference call or in-person meeting is held to
         review the baseline audit report and discuss your
         plan of action to make your office fully compliant.
        You are provided a Practice Compliance Manual
         incorporating the baseline audit findings and
         recommendations and a monitoring schedule will
         be set up to ensure you are following the manual
         on an ongoing basis.
        You take over monitoring with only periodic, as
         needed, intervention by the attorney/coder.
   Why do I need an attorney to prepare the
    baseline audit report and manual?
        Anything revealed is protected by the attorney
         client privilege.
        If the coder is retained by the attorney, their work
         product is also protected by the privilege.
        Make sure you retain an attorney experienced in
         health care law, not your uncle who does real
         estate closings even though he may do it for
         cheaper or free.
   What exactly does the baseline audit report
          i) corporate structure;
          ii) leasing arrangements;
          iii) practice area overview;
          iv) a review of all managed care participating provider
          v) licensed professional staff employment practices review;
          vi) company education and training;
          vii) company employment practices, including but not limited
           to workplace harassment, anti-discrimination policy,
           background checks, and licensure verification procedures;
   (cont’d)
          viii) history of administrative or legal problems;

          ix) referral relationships;

          x) diagnostic testing policies;

          xi) audit history;

          xii) clinical treatment guidelines;

          xiii) insurance & patient billing procedures;
   (cont’d)
          xiv) billing, coding, and documentation review of a
           random sampling of files performed by a certified
           chiropractic coding expert;

          xv) financial waiver policy and practices;

          xvi) company delegation policies; xvi) policy on
           treatment of family and staff; & xviii) company
   If you are audited and settle the case, you
    will most likely have to institute a
    compliance program

   Having a pre-existing compliance program
    makes it easier to settle an audit
    reimbursement case and may be the
    difference between just owing money
    back and a criminal fraud action.
   10) The most important question: How
    much will this set me back?

         Depends on size of practice, number of network
          affiliations, whether you are multidisciplinary, and
          how compliant you already are.

         Standard fees average from $1,500 for a sole
          proprietorship with few compliance issues to
          $3,500 for a multidisciplinary practice with major
          compliance issues.
    2006 PIP Regulation Amendments
    $90 daily cap raised to $99, an approximately 10% increase, but
     CPTs 97112 (neuromuscular reeducation), 97530 (therapeutic
     activities) and 98943 (extraspinal mani.) are added to the cap.
     Osteopathic manipulation is added to the $99 cap.

    Fee Schedule set at 130% of Medicare (RBRVS) rates, increased
     10% from 120% as originally proposed.

    Non-Fee Schedule codes are no longer to be paid at 120% of
     Medicare rates but rather are still paid at the providers usual and
     customary rate as determined by the insurer. PIP Carriers are
     authorized to use Ingenix database to determine UCR.
    2006 PIP Regulation Amendments
    CPT 97014 (unattended electrical stimulation) not reimbursable
     and must be reported using HCPCS Code G0283 which is part of
     $99 cap.

    Nerve Conduction Studies must be interpreted by the physician
     that performs it on site or directly supervises its performance.

    Needle EMG interpretation must be performed by the same
     physician that performed or directly supervised the Nerve
     Conduction Studies and must be performed on the same day.

    EMG/NCV results must be reported in a single, unified report.
    2006 PIP Regulation Amendments
    Mechanical traction (DRX/VAX-D) must be billed under CPT 97012
     which pays $24.60 in the North and $23.64 in the South.

    Low level / cold laser must be billed under CPT 97026 which pays
     $7.22 in the North and $6.86 in the South.

    MUAs are fee scheduled codes where previously they were UCR.
     Fee schedule reimburses primary doctor $197.57 in the North,
     $190.58 in the south and facility fee of $1,694.39 in the North
     and $1,569.61 in the South. Assistant is reimbursed at 20% of
     primary doctor’s fee. Previous UCR fees were approximately
     $1,500 primary doctor, $750 assistant, and $5,000 facility.
      Question & Answer
       Jeffrey B. Randolph, Esq.
       Labady & Randolph, LLC

           T: 201-505-1733

           F: 201-505-1186
   E-mail:

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