Avoid OIG Medical Coding Audits

Posted by David Blanchard on Dec 18, 2018 4:03:00 PM
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Whether you are dealing with a commercial payer, Medicare, or Medicaid, there are certain types of improper claims that should be avoided if you want to reduce your risk of a medical coding audit. That bit of wisdom comes from an entity that ought to know: the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG).Avoid OIG Medical Coding Audit

The OIG has released a roadmap to help new physicians avoid medical billing fraud and abuse in the Medicare and Medicaid programs. But this advice also broadly applies to how you approach reimbursement from commercial payers, and can also serve as a helpful reminder for physicians with years of experience in practice.

The agency warns, sternly, about consequences, noting in bold type that “when the federal government covers items or services rendered to Medicare and Medicaid beneficiaries, the federal fraud and abuse laws apply.”

When it comes to medical coding errors, the broad categories of “fraud” and “abuse” have distinct meanings. Fraud involves intentional misrepresentation. Abuse means “the falsification was an innocent mistake, but nonetheless representative,” according to the AMA’s Principles of CPT® Coding, ninth edition.

In its guidance, the OIG calls out upcoding for special attention in a separate box lined with yellow caution tape. This “refers to using billing codes that reflect a more severe illness than actually existed or a more expensive treatment than was provided.”

The agency calls special attention to proper reporting for evaluation and management (E/M) services. The OIG guidance offers as an example of upcoding “an instance when you provide a follow-up office visit or follow-up inpatient consultation but bill using a higher level E/M code as if you had provided a comprehensive new patient office visit or an initial inpatient consultation.”

The OIG notes misuse of modifier 25 as another example of upcoding. The modifier allows for extra payment for a separate E/M service provided on the same day as a procedure. Upcoding may happen if you append modifier 25 on claims in which the care you provided was “not significant, was not separately identifiable, and was not above and beyond the care usually associated with the procedure.”

The OIG also warns against billing for services:

  • You did not actually render.
  • Were not medically necessary.
  • Were performed by an improperly supervised or unqualified employee.
  • Were performed by an employee who has been excluded from participation in the federal health care programs.
  • That were of such low quality that they are virtually worthless.
  • That were already included in the global fee, such as billing for an E/M service the day after surgery.

Fraudulent billing can result in severe consequences. The OIG notes the case of an endocrinologist who billed routine blood draws as critical blood draws. He had to pay nearly $500,000 to settle allegations of upcoding and other violations.


The AAFP tells healthcare organizations keeping their error rate (the percentage of claims payers deny) below 5% is “desirable.” 

Internal coding audits can help you bring your error rate down. Yes, they’re time-consuming and costly, but it’s better to find problems before the OIG does so you can fix them.

Better yet? Prevent coding problems in the first place. Fewer errors mean not only increased compliance with coding guidelines (meaning less regulatory headache down the road), but also more accurate patient records (meaning they get better care) and greater revenue for the services you provide (meaning a healthier bottom line for your organization). 

Implementing an internal review process seems difficult, but we assure you, and have evidence signaling, that is just not the case. To make it simple, you will need an external resource, which makes sense given the fact you are auditing your own work. Whether it be code quick or some other third party auditing company, they can help you create a monthly, quarterly, or even annual audit plan. A simple baseline audit of 10 charts per provider each quarter will help you identify any hot spots or potential problems that might be going unnoticed. In many cases (again we have evidence) the audits can actually have a positive impact on your revenue! In most cases we will identify RVU opportunities in which you can generate more revenue! 


Whether you are trying to increase revenue, or avoid an audit. Third party coding reviews are a MUST HAVE within any healthcare organization. The simplicity of this can be achieved when working with a company such as  Code Quick or others. 


About Code Quick

Code Quick is a technology enabled coding service helping physician practices maximize their reimbursement and compliance Get pricing in 30 seconds, get your records uploaded in 5 minutes, and quality results back within 48 hours. Visit www.CodeQuick.com to learn more.


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Topics: Medical Coding Services, medical audits, ICD-10, medical coding, Medical Coding Compliance, HCC Coding