Internal Audits-Undercoding is a good strategy, right ?

Overcoding is an obvious audit finding. Most internal and external audits are focused on overcoding as a high risk topic. The risks are typically listed as submitting a “False Claim,” potentially being flagged as an audit candidate, being charged for overpayments, and being an “outlier.”

Due to these often touted compliance concerns, many practices choose a strategy of undercoding.

Is undercoding a good strategy to stay  “under the radar”?

Noviatas, a CMS Medicare contractor responsible for providers in AR, CO, DC, DE, MD, LA, MS, NJ, NM, OK, PA, TX, Indian Health & Veteran Affairs sees undercoding as “aberrant.”

CERT is a measure of improper payments. The goal of CMS and Novitas is to pay claims that meet Medicare’s requirements and pay them at the proper level of service. When there is an underpayment due to under coding, we did not pay the claim correctly and it is counted as an improper payment error. You are reimbursed for the higher level of service. Under coding misrepresents the true level of care provided to Medicare beneficiaries.

Under coding errors can statistically impact calculated error rates in the tens of millions of dollars. These statistics are used to calculate future Medicare payments and track trends in healthcare delivery. Patterns of under coding may be viewed as aberrant and open your practice up to audits and reviews. In addition, under coding impacts your practice revenue. You are not being appropriately paid for the level of service you provide to your patients. Correcting under coded claims can mean costly appeals.

Auditors at Healthcare Compliance Network (HCN) an healthcare compliance and RCM firm provides this perspective.

… the golden rule of coding is, and always will be, to code to the highest specificity. The payers don’t want you to lowball – they want the most accurate code which reflects the service performed. Without that, they cannot effectively rate policies, understand the risk burden, accurately set premiums, etc.

An undercoding error is still an error, and it will be graded as such in the event of an audit. That’s important because an unacceptable error rate will keep you on the radar, even if it’s due to undercoding.

Plus, it’s worth reiterating the adage that too much of anything is bad. Audits are often triggered by aberrant billing distribution patterns by CPT code. If you submit an abnormal number of claims with lower-level codes it is, in effect, no better than generating an abnormal volume of high-level codes. It implies that something is not right because you are outside the norm.

What is your percentage of undercoding?

What is the impact of undercoding on your practice’s revenue?

Are you describing your practice’s risk burden properly, so you can best serve your patients?

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