BP - Health Care Compliance Association

sampling methodology is vital in determining
any flaws in the system and to ascertain that
the appropriate sample is being reviewed. The
proper sampling methodology ties back to the
type of review that you are performing. The
frequency and type of review, whether payment
or coding related, should be determined
before setting the sample size. There are
several mechanisms and methodologies that
can be used to determine sample sizes. A
common method is to use software to assist
with the sampling. RAT-STATS (statistical
software available through the Office of the
Inspector General website) assists in selecting
random samples and evaluating results. 2
In addition to reviewing the process of an
effective auditing and monitoring program,
organizations should review common
and potential risk areas that Compliance
departments face. Common issues that are
often missed or not addressed properly are
the overuse and misuse of modifiers, claims
scrubbers, and thorough review of charges
and payments. The misuse of modifiers 24
and 25 leads to overpayment for services that
are either included in an E&M visit or part
of the global surgical package. In this case,
the sampling method needs to be carefully
analyzed to make sure various factors are
reviewed as well as the frequency of use. If
only high level evaluation and management
codes are sampled, a potential exists for missing
the use of modifier 25. Another sampling
issue can lie with pulling procedure codes and
not breaking them down to individual global
period days to determine if there were distinct
services provided where the modifier would
have been appropriate.
Use of modifier 25 (to identify a significant
and separately identifiable service was provided
on the same date as another service) 3
requests additional reimbursement from
payers when performing additional work. It’s
imperative to monitor so inappropriate payment
isn’t received. The frequency of the use
of this modifier should be monitored closely.
OIG published a report on “Modifier 25”
in November 2005, and in this report, OIG
indicated that if modifier 25 is appropriately
appended in an encounter when an E&M
service and a minor procedure were performed
on the same day. It should not exceed
more than 50% of the billable items. 4 The
requirements for the proper use of this modifier
should be carefully reviewed to prevent
incorrect application. Some areas to watch
for are:
n Is the modifier being used every single
time there was a procedure and E&M
performed?
n Is the modifier being appended by alternate
staff, such as billing staff, through
claim scrubber edit work queues?
Modifier 24 poses another issue of receiving
payment for services that are encompassed
with in the global surgical package and
separately billable. Part of the problem begins
with not knowing the global period associated
with certain procedures, and there is often
confusion with how physicians are designated
when they belong to the same group specialty
and practice. Physicians are often unaware
that they are considered one physician when
they belong to the same specialty/department
within the organization. Medicare defines
the “same physician,” within the definition
of modifier 24, as the same physician who
performed the procedure or a member of the
same group within the same specialty. 5 Application
of modifier 24 should not be done
automatically during a post-operative period.
The modifier should be appended by the
physician or by coding staff who have access
to the surgical dates and are able to review
medical records to determine if the service
provided during the post-operative period was
unrelated to the surgery. Understanding the
appropriate use of modifier 24 allows providers
to append the modifier correctly and helps
reduce compliance risks.
An auditing and monitoring process should
also include a review of the use of claims
scrubber edits to ensure that there are no hard
stop edits that will randomly append modifiers
24 and 25. Overview of billing work
queues to resolve modifier edits is essential in
ensuring proper reimbursement. This can be a
daunting task, because some of these reviews
can require review of the medical record to
make certain procedures were unrelated to the
E&M service, or in the case of modifier 25, if
the procedure was indeed separately identifiable
from the original service provided.
Ensuring processes are in place to monitor
your audit program and the frequency of
modifier use is critical. Monthly reporting
will allow the organization to monitor
various departments and processes to ensure
billing, coding, and operations are compliant.
Reporting is one step to improve your
program, in addition to having a comprehensive
communication mechanism to assist
in improving overall processes. An effective
auditing and monitoring program requires
expertise from several individuals and areas
within an organization. Compliance departments
that decide to partake in a thorough
audit program will benefit from step-by-step
planning that will help determine the fundamentals
that are needed to provide direction
for an accurate and compliant review.
Participation from everyone with in the
organization is central to having a successful
program and facilitating any recommendations
and changes. n
1. 2009 OIG Work Plan is available at: http://www.oig.hhs.gov/publications/docs/workplan/2009/WorkPlanFY2009.pdf
2. RAT-STATS software is available at: http://www.oig.hhs.gov/organization/oas/ratstats.asp
3. Current Procedural Terminology 2009, AMA
4. OIG report, No.OEI-07-03-00470, Nov.1, 2005 retrieved from http://
www.oig.hhs.gov/oei/reports/oei-07-03-00470.pdf
5. Medicare Claims Processing Manual, Chapter 12: Physician and nonphysician
practitioners
Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
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March 2009