Chart auditing for compliance and training

By Mike Enos, CPC, CPMA, CEMC, Nancy Enos, FACMPE, CPC-I, CPMA, CEMC
October 1, 2014

EHRs offer many benefits, from incentive programs (such as PQRS) and access to meaningful use incentives, to better notes for documentation to support billed procedures and clinical documentation that is essential for accurate diagnosis coding. Incorrectly billed claims for E&M services cost physician practices. Each claim that is under-billed by one level results in a practice missing out on $30 to $50 per claim on average, depending on the type of service. At the same time, the Centers for Medicare & Medicaid Services (CMS) has ramped up efforts to detect and recoup improper payments each year. By performing comprehensive error rate testing and working with recovery audit contractors, the government has identified millions of dollars in inappropriate claims. To keep auditors off your back while making sure your practice gets the reimbursement it deserves, establish a good compliance program and gain a comprehensive understanding of the requirements for documenting and billing E&M services as outlined below.

Risks in E&M documentation

In May 2014, a report from the Office of Inspector General (OIG) found that 55% of claims for E&M services were coded incorrectly and/or lacked documentation, which resulted in $6.7 billion in improper payments.

What does this mean to your practice? The OIG has sent a recommendation to CMS to follow up on claims for E&M services that were incorrectly billed, and to deliver provider education on the 1995 and 1997 guidelines for E&M services. Providers who contract with Medicare should have a compliance program in place, and the first step the OIG recommends is auditing and monitoring.

According to the same OIG report, 26% of all claims for E&M services were overcoded, which means that the documentation supported a lower level than what was billed. It also showed the following:

  • 15% of all E&M services were undercoded
  • 19% were lacking sufficient documentation or billed under the wrong category of code (for example, inpatient vs. outpatient).  
  • Some claims were both incorrectly coded and insufficiently documented.

The study also looked at the problem of cloned notes. Authenticity counts as much as completeness in supporting medical necessity and appropriateness of payment. Use of EHR systems present risks when providers overuse the copy/paste functions and auto-fill templates to create cloned notes. Each element of the review of systems (ROS) and physical exam must be supported by the history of present illness (HPI), which is documented personally by a provider for each visit. Using templates that automatically fill in a complete ROS with preselected content or physical examination with prepopulated normal findings does not support medical necessity. The coder’s adage is, “If it wasn’t documented, it wasn’t done.” The auditor’s adage here is, “If you didn’t do it, don’t document it.”

Auditing documentation to support E&M services

When selecting the level of an E&M service, the required components to bill for a level of service are referred to as the three key components: history, examination and medical decision-making complexity. Many providers who select an incorrect level of service did not overestimate the services they provided, but made a simple mistake in documentation that led to one of these required key components not being satisfied.

For the history component, physicians make a number of common mistakes in their documentation. First and foremost, the chief complaint must be clearly stated or easily inferred from the history to ascertain the type of service and support medical necessity. This is an area where many physicians struggle. The chief complaint can be in the patient’s own words (“my back is killing me”) or written in a way that explains the reason for the encounter (for example, “patient here for follow-up of hypertension”). Sometimes, the chief complaint is missing, invalid or actually indicates that a different type of E&M service is warranted. For example, a new patient office visit billed as a 99205 with the chief complaint “New patient here to establish care, no complaints” indicates a routine preventive exam, not a problem-oriented E&M service. 

The HPI can be easy to document for acute complaints, but often providers struggle when documenting history for patients with multiple chronic issues. Providers are allowed to give the status of three chronic conditions to get credit for an extended HPI. This is acceptable using the 1995 and 1997 documentation guidelines for E&M services published by CMS. Simply listing the conditions is not sufficient. Providers should give the status of each one to get credit. Note that the history of present illness must be recorded by a provider and that it is not acceptable to refer the reviewer to an earlier note to review the HPI.

Another common pitfall that many providers fall victim to pertains to the ROS. Many providers either forget or underdocument their ROS. This is a critical mistake because a complete ROS is required for a level 4 or level 5 new patient office visit or a level 2 or level 3 initial inpatient or observation service. To document a complete ROS, a provider might document findings in at least 10 systems.

CMS accepts documentation of review of the pertinent systems followed by a notation indicating that “all other systems are negative.” Avoid similar phrases that might seem to get the same message across but are not as clear. For example, the phrase “noncontributory” might be interpreted as something was reviewed and negative, or it might be interpreted as irrelevant and therefore wasn’t asked. This phrase is often used in the ROS or to describe a patient’s family history. Some carriers might accept the phrase when used to describe family history and some might not. We recommended that you document a pertinent negative finding to be sure credit is given.

Both the ROS and past medical, family and social history might be recorded by a provider, ancillary staff or on a form completed by a patient. To document that a physician reviewed this information there should be a notation supplementing or confirming the information recorded by others. If the note indicates that a patient intake form was reviewed but the form was left blank or incomplete, the provider gets no credit.


The physical exam can be scored using either the 1995 or 1997 guidelines. Using the 1995 guidelines, a comprehensive exam requires the examination of eight organ systems. There is some ambiguity regarding the difference between an “expanded problem-focused exam” and a “detailed exam.” Using the 1995 guidelines, this is only differentiated by the word “limited” versus “extended” to describe the exam. Novitas Solutions, an administrative services processing company for government-sponsored healthcare programs, offers some advice in the form of the “4x4 method,” which recommends identifying four elements examined in four body areas or four organ systems to consider an examination “detailed.” However, an exam that falls short of that can still be a detailed exam based on the reviewer’s clinical judgment.

Medical decision-making complexity is inherently subjective and difficult to quantify. CMS offers a list of factors that contribute to the overall complexity, but does not dictate precisely how these factors are scored. Some groups, including the Marshfield (Wis.) Clinic, developed guidelines for its local Medicare carrier to make scoring the decision-making complexity somewhat more objective, but it is important for physicians to know what to document to make sure they get the proper credit.

Problems that are new, worsening or poorly controlled are typically more complex than problems that are stable, resolving or resolved. Although it might seem obvious to a clinician, it is important to document the disposition of the diagnosis in the assessment and plan portion of the note, especially if the problem is worsening or not getting better with treatment.

Many providers are surprised to learn that history obtained from sources other than the patient add complexity to the case. It contributes to the overall amount of data that must be considered by a provider. Similarly, whenever a provider reviews old records, discusses the case with another provider or orders/reviews tests, more credit is given to the overall complexity of the medical decision-making. To get credit for reviewing old records or discussing the case with another provider, document a brief summary of the discussion or summarize the note that was reviewed. Whenever the provider independently visualizes an image, EKG tracing or specimen that also contributes to the complexity of data that is analyzed. The provider must make it clear that he personally visualized the X-ray image, EKG tracing or specimen under a microscope. Adding a few words to the description such as “to my view” will help the reviewer understand that a provider personally visualized the result.

Risk is often difficult to quantify, since it varies from patient to patient and case to case. The risk might be greatest due to the nature of the presenting problem(s) or management options selected. Some providers tend to underestimate the risk related to a given case because conditions might have become routine to them. For example, nocturnists in a hospital may routinely see patients complaining of chest pain and shortness of breath. This might become routine for them, and they might not consider it to be particularly complex in terms of their decision-making. However, to another observer, this could still be a potentially high-risk presenting problem that would be documented as moderate to high complexity medical decision-making.

Auditing documentation to support diagnosis codes

Diagnosis codes play a part in many of EHR functions, from entering orders to capturing charge data. Problems can arise when a diagnosis code is submitted on a claim for a problem that was not addressed in that date of service encounter. For instance, if a patient comes in for evaluation of a sprained ankle and requests a lab order for blood work for an upcoming appointment, the diagnosis must be entered in the system to generate the lab order, but it would not be mentioned in the E&M note in the history, exam or medical decision-making for that day. In this instance, the ICD-9 code (which might have been pulled in from previous visits) would not be supported by the note and should not be reported on the claim. However, some systems might not have the ability to suppress an ICD-9 code.

Some EHRs also link a diagnosis code to the problem list of chronic conditions, and the diagnosis codes should not be reported unless they are discussed or if a co-morbidity affects the treatment plan and is documented.

Chart audits often uncover the reporting of diagnosis codes that are not addressed in the encounter or diagnoses documented in the note that are missed as reportable diagnoses. This is why it’s so important to review the diagnosis codes when auditing notes.

Auditing documentation to support ICD-10 codes

The extensive requirements for documentation to support ICD-10 codes will dramatically increase the need to review clinical documentation. Coders and billers are being trained to avoid using unspecified codes and query the provider for more detailed information. Identifying chapters in ICD-10 that your providers use the most will enable you to review the details and teach providers what areas require specifics. (See box for details.)

Detailed feedback reporting on errors by ‘issues and recommendations reports’

Use your ICD-10 coding audit to identify areas of weakness and plan meaningful training for your providers, using their own notes as examples. Categorize the common types of documentation errors found and create a set of notes or “macros” to track the error occurrences by error type. The ICD-10 manual lists the details in each code range, often in brightly colored font, to illustrate the details. Create a crosswalk by reviewing your most frequently reported ICD-9 codes, reviewing the ICD-10 corresponding codes and sharing the expanded code lists with providers to give them an understanding of the additional codes and what documentation must support them.

Next step

Avoid putting your audit results on a shelf. Auditing your charts and putting the results in storage is like going to a physician and never filling your prescription. Use the information gained to improve coding and documentation for E&M services, procedures billed and as a valuable training tool for ICD-10. The benefits will be improved reimbursement and reduced risk.

Mike Enos, CPC, CPMA, CEMC

Nancy Enos, FACMPE, CPC-I, CPMA, CEMC, consultant, MGMA Health Care Consulting Group, MGMA

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