Posted: May 1st, 2025

Week Six Audit plan

AAPC
How to Perform
a Successful
Chart Audit
2010
AAPC
2480 South 3850 West, Suite B
Salt Lake City, Utah 84120
800-626-CODE (2633), Fax 801-236-2258
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How to Perform a Successful Chart Audit
Written by:
Deborah Grider,
CPC, CPC-I, CPC-H, CPC-P, CPMA,
COBGC, CEMC, CDERC, CPCD, CCS-P
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Perform a Successful Chart Audit
Disclaimer
This course was current at the time it was published. Although every reasonable effort has been made to assure the accuracy of the information within these pages, the ultimate responsibility lies with the readers to ensure they are using the
codes correctly. The AAPC’s employees, agents, and staff make no representation, warranty, or guarantee that this compilation of information is error-free and will bear no responsibility or liability for the results or consequences of the use
of this course. This guide is a general summary that explains guidelines and principles in profitable, efficient health care
organizations.
Notices
CPT® copyright 2009 American Medical Association. All rights reserved. Fee schedules, relative value units, conversion
factors and/or related components are not assigned by the AMA, are not part of CPT®, and the AMA is not recommendation their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The AMA assumes
no liability for data contained or not contained herein.
All Rights Reserved. CPT® is a registered trademark of the American Medical Association (AMA).
CPC®, CPC-H®, CPC-P®, CIRCC® and CPMATM are trademarks of the AAPC
© 2010 AAPC
2480 South 3850 West, Suite B, Salt Lake City, Utah 84120
800-626-CODE (2633), Fax 801-236-2258, www.aapc.com
All rights reserved.
ISBN 978-1-936095-33-9
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AAPC
1-800-626-CODE (2633)
Perform a Successful Chart Audit
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Is Medical Necessity and Why Does It Matter? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Medical Necessity and CMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Purpose of Auditing and Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Medical Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Why Perform the Audit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Internal vs. External Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Top Billing and Coding Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Top Evaluation and Management Coding Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Auditing Evaluation and Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Which E/M Guidelines Should You Use? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Auditing the Surgical Medical Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Global Surgery Package: What’s Included? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Medicare Surgical Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Minor Surgical Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Major Surgical Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Correct Coding Initiative (CCI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Unbundling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Unbundling Prevention Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Performing the Chart Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Audit Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Evaluating for Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Beginning the Audit Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
How to Conduct a Chart Audit Step by Step . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Step 1: Identify Audit Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Step 2: Sample Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Step 3: Develop or Select an Audit Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Step 4: Perform the Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Step 5: Complete the Review Analysis and Summary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Step 6: Meet With the Practitioner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Step 7: Make Recommendations for Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Step 8: Provide Monitoring and Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Perform a Successful Chart Audit
Audit Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
E/M Audit Form Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Score: Physical Examination Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The Audit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Medical Record Chart Audit Summary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Communicating Audit Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Risk Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Monitoring for Accuracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Corrective Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Beginning the Surgical Audit Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Auditing the Surgical Medical Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Surgical Coding Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Surgery Audit Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
The Detailed Analysis and Audit Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Sample Surgery Audit Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Summary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Detailed Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Auditing Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Case #1—Provider: Mark Welby, M.D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
E/M Audit Form Case #1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Score: Physical Examination Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Table of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Case #2—Provider: Mark Welby, M.D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
E/M Audit Form Case #2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Score: Physical Examination Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Table of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Case #3—Provider: Mark Welby, M.D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
E/M Audit Form Case #3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Score: Physical Examination Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Table of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Medical Record Chart Audit Summary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Recommendation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Surgical Coding Charge Ticket Case #4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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Perform a Successful Chart Audit
Surgical Coding Case #4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Surgery Audit Tool Case #4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Surgical Coding Charge Ticket Case #5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Surgical Coding Case #5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Surgery Audit Tool Case #5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Surgical Coding Charge Ticket Case #6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Surgical Coding Case #6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
E/M Audit Form Case #6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Score: Physical Examination Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Table of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Surgery Audit Tool Case #6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Surgery Audit Summary Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Surgery Audit Detailed Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Evaluation and Management Documentation Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Definition of Key Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
History Grid (meet three of three criteria) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
1995 Versus 1997 Examination Documentation Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Components of The Physical Exam 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
1997 General Multi-System Examination Guidelines Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Content and Documentation Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Medical Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Table of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Medical Decision Making Grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Instructions for Selecting a Level of E/M Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Slide Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Auditing Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Answer Key . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
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Perform a Successful Chart Audit
How to Perform a Successful Chart Audit
Introduction
Chart auditing is similar to coding, but differs in that the
coder actually is analyzing the medical record based on the
documentation. Chart auditing is a broad topic, ranging
from the basic patient encounter to determine the level of
service reported (along with correct diagnosis codes, ancillary services, and modifier usage), to an extensive review
of the entire chart to examine thoroughly all aspects of the
medical record.
Insurance carrier interpretation of evaluation and management (E/M) guidelines, modifier usage, and service bundling may vary; therefore, the auditor should review carrier
and/or contractor policy requirements and have them
available when auditing the medical record. For example,
if you are auditing physical therapy services for Medicare
patients, the medical policy for physical therapy should be
referenced for specific guidelines. For E/M services, the
1995 and 1997 Evaluation and Management Documentation Guidelines should be referenced.
This session will cover:
1. Medical Necessity
2. E/M Service Audits
3. Surgical Audits
4. The Audit Process
5. Audit Steps
6. Designing an audit report with corrective action
7. Hands-on E/M and Surgical Cases to audit
What Is Medical Necessity and
Why Does It Matter?
Services rendered to patients should be necessary to affect
a cure or a change in the condition for which the patient is
being seen.
The term “medical necessity” is difficult to define, and
there are almost as many definitions as there are payors.
Most definitions incorporate the principle of providing services that are “reasonable and necessary” or “appropriate”
in light of clinical standards of practice. The lack of objectivity in these terms often leads to widely-varying interpretations by physicians and payors that, in turn, can result in
the care provided not meeting the definition. The decision
whether the services were medically necessary typically is
made by a payor reviewer who never sees the patient.
Medicare defines “medical necessity” as services or items
reasonable and necessary for the diagnosis or treatment
of illness or injury or to improve the functioning of a
malformed body member. CMS has the power under the
Social Security Act to determine on a case-by-case basis if
the method of treating a patient is reasonable and necessary. For all payors and insurance plans, even if a service
is reasonable and necessary, coverage may be limited if the
service is provided more frequently than allowed under a
national coverage policy, a local medical policy, or a clinically accepted standard of practice.
Claims for services that are not medically necessary will be
denied—but not getting paid for these claims isn’t the only
risk. If Medicare or other payors determine that services
were medically unnecessary after payment has been made,
they treat it as an overpayment and demand that the money
be refunded, with interest. Moreover, if a pattern of such
claims can be shown— and the physician knows or should
know that the services are not medically necessary—the
physician may face large monetary penalties, exclusion from
Medicare program, and criminal prosecution.
ICD-9-CM codes form a crucial partnership with CPT®
procedural codes by supporting the medical necessity of
the CPT® procedure or service performed. Diagnosis codes
identify the medical necessity of services provided by
describing the circumstances of the patient’s condition.
Most payors use claim “edits,” or automatic denial/review
commands within their computer software, to review
claims. These edits ensure that payment is made for specific procedure codes when provided for a patient with a
specific diagnosis code or predetermined range of ICD9-CM codes. Neither the CPT® codes nor the ICD-9-CM
codes can stand-alone.
Apply the following principles to diagnosis coding to
demonstrate medical necessity:
1. List the principal diagnosis, condition, problem, or other
reason for the medical service or procedure.
2. Assign the code to the highest level of specificity.
3. For office and/or outpatient services, never use a “rule-out”
statement (a suspected but not confirmed diagnosis); a clerical
error could permanently tag a patient with a condition that
does not exist. If no definitive diagnosis is yet determined,
code symptoms and/or signs instead of using rule-out
statements.
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4. Be specific in describing the patient’s condition, illness, or
disease.
5. Distinguish between acute and chronic conditions, when
appropriate.
6. Identify the acute condition of an emergency situation (e.g.,
coma, loss of consciousness, or hemorrhage).
7. Identify chronic complaints, or secondary diagnoses, only
when treatment is provided or when they affect the overall
management of the patient’s care.
8. Identify how injuries occur.
These facts must be substantiated by the patient’s medical
record, and that record must be available to payors upon
request.
Medical necessity of a service must be reviewed when
selecting the level of E/M code, even if two of three key
components for the established patient are met.
When reporting a patient encounter, codes should be
selected that best represent the services furnished during
the visit. The common codes used to support and identify
these services are the diagnosis (ICD-9-CM) codes and the
procedure (CPT®) codes from the American Medical Association (AMA) CPT® manual.
CMS Internet Only Manual (IOM) 100-04, Medicare
Claims Processing Manual, Chapter 12, section 30.6.1
states: “Medical necessity of a service is the overarching
criterion for payment in addition to the individual requirements of a CPT® code. It would not be medically necessary or appropriate to bill a higher level of evaluation and
management service when a lower level of service is warranted. The amount of documentation should not be the
primary influence upon which a specific level of service is
billed. Documentation should support the level of service
reported. The service should be documented during, or as
soon as possible after it is provided in order to maintain an
accurate medical record.”
Medical Necessity and CMS
Medicare conducts an in-depth analysis of medical necessity for office visits, hospital visits, nursing home visits, and
procedures and services provided by physicians. The Centers for Medicare and Medicaid Services (CMS) developed
a program to determine national, contractor specific, provider compliance error rates, paid claims error rates, and
claims processing error rates. The program is known as the
Comprehensive Error Rate Testing (CERT) program.
Based on data gathered in 2009, CMS has determined that
4 percent of all claims reported were not medically necessity.
For example, if the physician documented a detailed history and examination for a diagnosis of rhinitis—even if
this is a new problem and the physician writes a prescription—it would not be medically necessary to report a
99214 for this service because the medical necessity based
on the presenting problem and management of the problem would be of low complexity.
For surgical and other procedures, as well, the diagnosis
must meet support medical necessity for the service(s)
rendered.
The Comprehensive Error Rate Testing Program also identifies “undercoding” when the service supports a higher
level of service based on documentation and medical necessity. When auditing these services, CMS will recode the
claims and reimburse at the appropriate level. These situations also are considered coding errors.
Table 1: Summary of Error Rates by Category (Improper Medicare Fee-For-Service Payments Report, November 2009)
Type Of Error
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Net
Net
Net
Net
Net
Net
Net
Net
Gross Gross Gross Gross Gross Gross
No Documentation Errors
1.9%
2.1%
0.4%
0.6%
1.2%
0.8%
0.5%
5.4%
3.1%
0.7%
0.6%
0.6%
0.2%
0.1%
Insufficient Documentation Errors 4.5%
2.9%
0.8%
2.6%
1.3%
1.9%
1.3%
2.5%
4.1%
1.1%
0.6%
0.4%
0.6%
1.9%
Medically Unnecessary Errors
5.1%
4.2%
3.9%
2.6%
2.9%
2.7%
3.6%
1.1%
1.6%
1.6%
1.4%
1.3%
1.4%
4.0%
Incorrect Coding Errors
1.2%
1.7%
1.3%
1.3%
1.0%
1.1%
0.9%
0.7%
1.2%
1.5%
1.6%
1.5%
1.3%
1.6%
Other Errors
1.1%
0.5%
0.7%
0.9%
0.4%
-0.2% 0.0%
0.1%
0.2%
0.2%
0.2%
0.2%
0.1%
0.1%
Improper Payments
13.8% 11.4% 7.1%
8.0%
6.8%
6.3%
9.8%
10.1% 5.2%
4.4%
3.9%
3.6%
7.8%
Correct Payments
86.2% 88.6% 92.9% 92.0% 93.2% 93.7% 93.7% 90.2% 89.9% 94.8% 95.6% 96.1% 96.4% 92.2%
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6.3%
Perform a Successful Chart Audit
When selecting E/M service levels, provider must make
certain that even if the documentation supports a level
4 or level 5 visit, the service level is medically necessary
based on the presenting problem and the management of
the patient. It is not enough to document a detailed or
comprehensive history and examination without supporting medical necessity. Medical necessity is determined with
documentation in the assessment and plan.
To support medical necessity, the assessment and plan
must define clearly the following:
1. all diagnoses the provider is managing during the visit,
2. for an established diagnosis; whether the patient’s condition
is stable, improved, worsening, etc,
3. when diagnostic tests are ordered; the rationale for ordering
the tests are either documented or easily inferred., and
4. management of the patient is documented clearly, (i.e., prescription drugs, over the counter medication, surgery, etc.)
The documented assessment and plan must support the
service level reported based on medical necessity. An
appropriate history and exam also must be documented.
The Purpose of Auditing and Monitoring
A chart audit is an examination of medical records to
determine what procedure(s) or service(s) is performed.
From this, the auditor determines if the documentation is
compliant, if the claim is correctly coded, and if all charges
are captured. Chart audits may measure:
yy adherence to clinical protocols
yy patient adherence with medication regimens
yy provider compliance with coding and documentation
requirements for E/M services, office procedures, modifier
usage, diagnosis code supporting medical necessity, and/or
surgical procedures
You can conduct a chart audit on virtually any aspect of
medicine and medical care: Chart audits even can review
the prevalence of symptoms and disease. The important
point is that the data you are reviewing should be accurate
and must be available in the chart.
Note also that a chart audit will involve reviewing data
that may be deemed confidential; therefore, it is necessary
to consult the appropriate institutional guidelines prior to
reviewing any medical record.
ducted on a regularly-scheduled basis and should include
such activities as auditing, reviewing utilization patterns,
reviewing computerized reports, and reimbursement. A
monitoring system usually is put in place based on findings
from the baseline audit.
The Medical Record
The medical record serves many purposes, and is essential
to the proper functioning of the medical practice. A medical record can be a paper chart, or in electronic format
using an Electronic Health Record (EHR). The medical
record details information that is pertinent to patient care,
including:
yy Demographic and insurance information
yy Progress notes
yy Laboratory reports
yy X-ray reports
yy Ancillary procedures, services, and tests
yy Diagnostic studies
yy Operative Notes (if applicable)
yy Medication information
yy Immunizations
yy Old medical records
The purpose of the medical record is to document services
provided to the patient, to verify the legitimacy of billable
services, and to serve as a legal document describing the
course of the patient’s treatment. Practitioners, including physicians and non-physician practitioners, face the
challenge of submitting correct coding information based
on the documentation in the medical record. Periodic
audits—whether internal or external—are vital to ensure
that the documentation will meet the standards and
requirements of the individual carrier to avoid repayment
and, in the case of government payors, additional fines and
penalties.
Reporting the highest level and correct type of service
provided ensures that no fraudulent activity has occurred,
and that all charges are captured, billed, and reimbursed.
A coding audit, along with ongoing monitoring and education, will assist the organization in meeting the goal of
compliance. Careful planning and implementation of the
audit process is worth the time and effort invested.
Auditing is the process of examining the medical record,
verifying information, and gathering baseline information
to identify risk areas. Monitoring is the ongoing process of
reviewing coding practices and the adequacy of the documentation and code selection. Monitoring should be con-
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Why Perform the Audit?
1. In addition to identifying potential risks to the organization,
an audit helps ensure compliance to organization policies and
procedures, payor regulations, and coding guidelines. An audit
should not be undertaken without the full support of the organization (including medical directors, board of directors, and
other administrative entities). It is beneficial to uncover potential problems before the organization is surprised by a request
from a payor, CMS contractor, Recovery Audit Contractor
(RAC), or the Office of Inspector General (OIG).
2. The audit also helps to identify problem areas so the organization can make corrections before further damage occurs.
A great deal of information can be gathered when the documentation is compared to the charge ticket/superbill and the
actual claim. A medical audit can reveal errors hidden in
the medical record, such as: services not provided, services
billed under the wrong provider, services not ordered by
the licensed professional, wrong procedures and diagnoses
reported, and other coding and billing errors.
Developing a clear plan of action makes sense, so that a
practice can be prepared for an eventual audit by an insurance carrier or CMS. The operative phrase is “eventual
audit.” Many carriers, including Medicare, have been gearing up compliance teams nationwide to enable frequent
and random on-site and off-site audits of hospitals and
medical practices. Many factors that trigger an audit by a
federal health care program or insurance carrier are based
on specific criteria, such as:
yy Consistently using one level of E/M service or routinely
using higher levels
yy Ordering excessive tests
yy Billing Medicare or another government program for care
not provided
yy Unbundling of procedures
yy Waiving coinsurance and deductibles in absence of financial
hardship
yy Changing codes to get paid
yy Coding based only on reimbursement and not medically
necessary services
yy Practitioner’s profile (utilization pattern) does not meet the
standards of the industry
You must understand how to perform a compliance audit
as a “preventive” measure.
3. Audits also may identify missed charges that could be
reported, and encourage the review and correction of denials
and under-documented services (such as services that could
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be reported at a higher E/M level with more detailed documentation).
Internal vs. External Audit
Many practices today use a combination of internal and
external audits to maintain compliance; however, hiring a
full-time internal auditor is sometimes cost prohibitive for
the solo or small group practice. Another problem is finding an auditor with the necessary training and expertise
in auditing medical records for coding and compliance
(In the future, when the Electronic Health Record is the
standard in every medical practice, the role of the coding
professional may change from coding claims to reviewing
patient encounters for correct coding and documentation—which essentially is the “Audit function”).
One advantage of conducting an external audit is that it
provides an objective approach in determining whether
problems exist, and provides a framework for developing a
remedy for isolated issues. When a practice hires an external auditor, the auditor typically will conduct a “baseline”
audit—which is a sampling of various levels of E/M services, along with office or surgical procedures—to measure
the coding compliance for each practitioner. External
audits are performed quarterly, biannually, or annually,
depending on the results of the baseline audit.
An internal audit may be conducted periodically by the
coding staff trained in auditing medical records, or by a
practitioner trained to audit for coding and compliance. At
a minimum, the internal audit should be conducted annually (and more often if problem areas have been identified).
The decision to perform the audits internally or externally
is determined by each individual practice. One advantage
of an external audit is that the practice may realize more
objectivity than with an employed auditor, in some cases.
Type of Audits
yy Pre-payment (prior to submitting the claim)
yy Retrospective (after the claim is submitted and paid)
yy Focused Review (review of a significant number of chart
notes)
A pre-payment audit is performed prior to submitting the
claim to the insurance carrier. Typically the billing record
(charge ticket or superbill) is obtained, along with the
chart documentation and any supporting labs, medication
sheets, problem lists, etc. This type of audit may affect
claim turn-around time. Communication between the provider and auditor should follow the audit immediately.
A retrospective audit is performed after the provider has
submitted the claim to the insurance carrier and payment
Perform a Successful Chart Audit
is received. The auditor will review the billing record
(charge ticket or superbill), the Remittance Advice/Explanation of Benefits, and the medical record documentation,
along with other supporting documentation. A retrospective audit could lead to refunding payment or partial payment to the insurance carrier. This is the most common
audit method and charts can be selected based on utilization or frequency of the service provided. A cost might be
involved when using an external auditor, for attorney fees
when hired under “Attorney Client Privilege.”
After the audit is complete, the auditor will report findings
identifying:
yy the error and accuracy rate(s) for each procedure or service
performed
yy a list of each record in the sample
yy a comparison between reported and documented services
yy whether the provider’s documentation supports the service
that was billed, and
yy if the service was medically necessary based on the carrier’s
policy.
Focused Medical Review
Section 1 842(a)(2)(B) of the Social Security Act requires
carriers to apply safeguards against unnecessary utilization
of services furnished by providers. This is accomplished
by conducting prepayment and post-payment reviews to
identify inappropriate, medically unnecessary, or excessive services and take action where a questionable pattern
of practice is found. This identification effort is termed
Medical Review (MR).
In 1993, Medicare carriers implemented a new program for
medical review. This program is called Focused Medical
Review (FMR). FMR is the targeting and concentration of
more in-depth medical review efforts of claims for items,
services, or providers that present the greatest risk of inappropriate program payment.
The objectives of FMR are to maximize program protection, to avoid provider hassle, and to conduct the most cost
effective method of accomplishing MR.
Contractors develop components of their FMR program
(i.e., local MR policy, internal guidelines, and local
screens) by identifying aberrances and areas subject to
potential abuse or overutilization. They are responsible for
targeting specific aberrances, and the individual providers of service are responsible for excessive atypical billings.
This will help to eliminate the use of generic MR screens
that affect the entire physician population.
Physician education and policy development are the major
components resulting from FMR. A physician whose aberrant pattern cannot be explained logically may be placed
on prepayment claim monitoring if the physician fails to
take corrective action.
Medical Directors work closely with the Carrier Advisory
Committee in the development of Medicare policy.
A focused review can be conducted by a contractor, carrier,
or independent audit reviewer. A focused chart review is
performed after identification of a specific problem related
to inaccurate coding, based on documentation. Typically,
this is requested by a carrier that submitted claims that
were challenged. The questionable claims are selected and
reviewed against documentation in the medical record.
The result is a report that either supports or challenges the
carrier’s findings. Usually, a focus review consists of twenty
or more medical records per provider.
How often you audit depends on the practice and the
errors found during the “baseline” audit. The baseline
audit is the first audit performed to identify problem areas.
Again: An audit should be performed to maintain compliance at a minimum of once per year—if not more often.
Top Billing and Coding Errors
1. Duplicate claim submitted
Description: Claims submitted are exact duplicates of previous claims submitted. Claims often are denied as duplicates because:
 The claim was previously processed (i.e., no payment made, allowed amount applied to deductible
on the initial claim). The provider re-files the claim
to “correct” it. The second claim submitted is considered a duplicate because the initial claim was
processed correctly.
 The provider automatically re-files the claim to
seek payment if the initial claim has not been paid
within 30 days.
2. Non-covered services
Description: Billing for services not covered under the
Medicare program or by other insurance carriers.
 Medicare defines many, “exclusions” such as: personal comfort items; self-administered drugs and
biologicals (i.e., pills and other medications not
administered by injection); cosmetic surgery (unless
done to repair an accidental injury or improvement
of a malformed body member); eye exams for the
purpose of prescribing, fitting or changing eye-
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Perform a Successful Chart Audit
glasses or contact lenses in the absence of disease or
injury to the eye; routine immunizations; routine
physicals; lab tests and X-rays performed for screening purposes; hearing aids; routine dental (care,
treatment, filling, removal or replacement of teeth);
custodial care, services furnished or paid by government institutions; services resulting from acts of
war; and, charges to Medicare for services furnished
by a physician to immediate relatives or members of
the same household.
 Stay up-to-date on current exclusion policies by
checking with your Medicare carrier and/or its website for changes. Most contractors will post changes
to policies and their effective date.
3. Lack of medical necessity established
Description: The payor deems the services billed are not
medically necessary.
 The claim will be denied because the payor does
not deem the procedure for this diagnosis to be a
“medical necessity.” Check the particular carrier or
contractor for the list of covered diagnoses for a particular service.
4. Inappropriate bundling of services
Description: This indicates a lack of awareness of the
National Correct Coding Initiative (CCI) edits that govern
appropriateness of tests being performed together on the
same date of service. Alternately, it may indicate a lack of
understanding of the appropriate code status of a specific
CPT® code. For example, payment for “B” status code
services always is bundled into payment for other services;
whereas with “C” status codes, the local carrier determines
bundling and the appropriateness of the procedure and
subsequent reimbursement.
 Access the CCI Edits on the Medicare website
(www.cms.hhs.gov/NationalCorrectCodInitEd/)
to review which codes may be billed together on
the same date of service, as well as the appropriate
modifiers to use in those situations.
 Familiarize yourself with the payment status code of
the CPT® procedure codes you report.
5. Beneficiary eligibility
Description: You submit a claim for processing and the
beneficiary/patient does not have eligibility. Claims often
are denied for eligibility because:
 The beneficiary number is invalid on the claim
 The beneficiary is not eligible to receive benefits
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 The beneficiary’s claims must be filed to another
insurance plan
6. Incorrect carrier
Description: The claim was submitted to the incorrect
payor/contractor for payment.
It’s important to screen patients and be aware of the
types of services provided prior to submitting a claim to
the carrier. Check the patient’s insurance card and verify
the Health Insurance Claim (HIC) number on the card.
Patients with traditional Medicare coverage will have HICs
of nine digits followed, by an alphanumeric suffix.
7. Medicare is the secondary payor
Description: The care of a Medicare patient may be covered by another payor through coordination of benefits.
Medicare may be the secondary payor in our offices when
the Medicare patient is: 65 years or older, employed fullor part-time by an employer who has 20 or more full- or
part-time employees, and covered under the Employer’s
Group Health Plan (EGHP); or covered under the EGHP
of an actively employed, full- or part-time spouse whose
employer has 20 or more employees.
 Liability and auto/no-fault liability: Section 953 of
the Omnibus Budget Reconciliation Act of 1980
was amended by the Deficit Reduction Act of 1994.
It precludes Medicare payment for items or services
to the extent that payment has been made or reasonably can be expected.
 W here the primary claim should be filed under
auto, medical, Personal Injury Protection (PIP), nofault, worker’s compensation, or any liability insurance plan or policy including self-insurance plans.
 Workers’ compensation: Medicare will be the secondary payor for work-related illnesses or injuries
covered under a workers’ compensation plan.
 Veteran’s Affairs (VA): VA records are set-up by
information received by the Social Security Administration. Veterans who are entitled to Medicare may
choose which program will be responsible for payment of services covered by both programs.
8. Incorrect Diagnosis
Description: Services were denied because the diagnosis
listed as primary was not a covered diagnosis for the procedures performed.
 Having a covered diagnosis does not mean you
automatically can perform any procedure for which
the covered diagnosis exists. The medical record
must substantiate the service. For example, consider
Perform a Successful Chart Audit
routine anterior segment photography for a patient
who presents with allergic conjunctivitis. Despite
having a “covered diagnosis” for taking the photo,
there most likely is insufficient medical necessity to
take an annual photo of the allergic eye.
9. The claim is missing a modifier or has an incomplete
or invalid modifier
Description: The modifier necessary to process the claim
correctly is missing, incomplete, or invalid for the specific
procedure and diagnosis indicated on the claim form.
 K now how to apply CPT® modifiers for the specific condition or situation. CPT® modifiers are
defined in their entirety in Appendix A of the CPT®
manual.
 Misuse and abuse of modifiers—particularly modifiers 22, 25, and 59—is under OIG scrutiny and
can result in significant penalties.
Coding for physician services and materials is seemingly
complex, but keeping current with published policies and
guidelines that are obtainable easily should help ensure a
high degree of success within your practice.
Top Evaluation and Management Coding Errors
1. Upcoding
Documentation in the chart does not support the level
of service
2. Downcoding
Documentation in the chart supports a higher level of
service
3. Chief complaint or reason for the visit is missing from
the note
4. Assessment is not documented clearly
Providers cannot use rule out, probable, or suspected
conditions for a diagnosis; however, providers should
document suspected conditions to get credit for the
medical necessity for the service, while also documenting signs and/or symptoms.
5. Documentation is not initialed or signed
6. Tests ordered are not listed in the documentation, but
are billed on the encounter form/superbill
W hen tests are ordered, document in the medical
record for the date of service the tests were ordered.
7. A clear assessment and plan is not documented clearly
8. Diagnosis is not a referenced correctly
9. Documentation is missing
10. Lost dictation
11. Superbill/encounter form and/or charge (fee) ticket are
not available
12. Superbill/encounter is incomplete or incorrect
13. Documentation is illegible
When auditing medical records, the auditor should review
the documentation for coding errors the government and
other payors have identified as problematic.
Auditing Evaluation and
Management Services
The CPT® system for reporting office visits, consultations,
hospital visits, emergency department visits, and all the other
“visit” services provided by physicians was revised in 1992 to
correlate with the payment system instituted by the federal
government for Medicare claims. In the past, the reporting
of the physician’s professional encounters was subjective,
undefined, and easily manipulated for better description.
With the new method of payment, the entire structure of an
encounter had to meet measurable standards.
In 1992, all narratives and components changed, thereby
forcing the measurement of service intensity into the selection process. Intensity of service is measured as graduated
levels of service, but not given names equivalent to the terminology used in the past (e.g. brief, intermediate). Within
each level, CPT® lists specific components to measure service intensity.
Which E/M Guidelines Should You Use?
The Center for Medicare & Medicaid Services, local contractors, and commercial carriers have all supported the use
of either the 1995 or 1997 E/M documentation guidelines.
When auditing medical records, carriers will review both
sets of guidelines and give the provider credit for using
either set.
When reviewing your physician’s records, it is recommended that you encourage your providers to use the 1997
guidelines, so that when the final determination is made
by the insurance carrier, your provider will not have difficulty defending the service provided; however, when you
audit the medical record, you might want to use both sets
of guidelines. If the practitioner meets the definition of
compliance with the 1995 guidelines, it is compliant unless
your organization has a specific policy that the 1997 guidelines should be used.
An issue to consider when using the 1995 guidelines is that
there is no quantifiable number of body area(s) or organ
system requirements.
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Auditing the Surgical Medical Record
yy Insurers monitor physicians’ billing practices closely for possible inappropriate billing and/or unbundling. It is essential
that the coding description accurately describe what actually
transpired during the patient encounter.
Accurately translating surgical and medical services into
CPT® and ICD-9-CM codes is challenging. To audit the
surgical medical record accurately, the auditor must have a
good understanding of surgical terminology and anatomy.
The auditor also must understand the surgery coding
guidelines, insurance carrier rules, CCI edits, and how to
code an operative report.
Global Surgery Package: What’s Included?
Often, the time, effort, and services rendered when accomplishing a procedure are bundled together to form a surgery package. Payment is made for a package of services
and not for each individual service provided within the
package. The CPT® manual describes the surgery package
as including:
1. subsequent to the decision for surgery, one E/M visit on the
date immediately prior to or on the date of the procedure
(including history and physical)
2. local anesthesia: defined as local infiltration, metacarpal/
digital block, or topical anesthesia
3. the operation itself
4. immediate post-operative care, including dictation of
operative notes, talking with family and other physicians
5. writing orders
6. evaluation of patient in post-anesthesia recovery
7. normal, uncomplicated follow-up care
The following are some examples of what might be
included in a surgical procedure:
yy Cleansing, shaving, and prepping of skin
yy Draping of patient
yy Positioning the patient
yy Insertion of intravenous access for medication (IV)
yy Administration of sedative by the physician performing the
procedure
yy Local infiltration of medication – topical, or regional anesthetic
administered by the physician performing the procedure
yy Surgical approach, including identification of landmarks,
incision, and evaluation of the surgical field
yy Exploration of operative area
yy Fulguration of bleeding points
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yy Simple debridement of traumatized tissue
yy Lysis of a moderate amount of adhesions
yy Isolation of neurovascular tissue or muscular, bony, or other
structures limiting access to surgical field
yy Surgical cultures
yy Wound irrigation
yy Insertion and removal of drains, suction devices, dressings,
pumps into same site
yy Surgical closure
yy Application and removal of postoperative dressings including
analgesic devices
yy Applications of splints with musculoskeletal procedures
yy Institution of patient – controlled analgesia
yy Photographs, drawings, dictation, transcription to document
the services provided
yy Surgical supplies
Medicare Surgical Guidelines
Minor Surgical Procedures
A minor procedure is defined by Medicare as a service that
has 0 or 10 day postoperative period. Payment for minor
procedures includes same-day services (either preoperative
or postoperative care), intraoperative care, and care within
the defined global period.
Major Surgical Procedures
The major surgical procedure is defined as having a oneday preoperative period and a 90-day postoperative period.
Payment for a major medical procedure includes all related
preoperative care, postoperative care, and intraoperative
services. The global fee includes the following services:
yy Preoperative visits beginning with the day before the day of
surgery
yy Intraoperative services that are a usual and necessary part of
a surgical procedure
yy All additional medical or surgical services required of the
physician within 90 days of the surgery due to complications
that do not require additional trips to the operating room
yy Related follow-up visits made within the 90 day postoperative period
yy Post surgical pain management by the surgeon
yy Any related supplies, services, procedures normally required
for the particular surgery
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Correct Coding Initiative (CCI)
In 1996, CMS implemented a nationals policy aimed at
controlling improper or incorrect practices in the filing of
Medicare Part B claims. A comprehensive review of CPT®
code descriptors, CPT® coding instructions, national and
local coding edits, and Medicare billing history was followed by a comment period by specialty societies and the
AMA. After input from these groups and CMS’ review of
their comments, the code combinations became “correct
coding edits.” The CCI replaced a variety of rebundling
programs that were being used by local carriers. Many
third-party payors and other insurance carriers now rely
on the CCI when initiating policy for surgical procedural
coding.
The CCI constantly reviews code combinations and makes
recommendations for addition and deletion of combinations from the correct coding edit list. After input is solicited and evaluated from specialty societies and the AMA,
the edits are updated quarterly. The absence of a combination from the edit tables does not imply coverage. All
changes are controlled and approved by CMS. Local carriers may not add or delete code combinations.
The code combinations fall into two categories and are
listed on two tables: Correct Coding (often referred to
as rebundling) and Mutually Exclusive. Correct coding
edits are established to deny component procedures that
should not be reported separately with more comprehensive
procedures. Mutually exclusive edits are established to
deny one of a combination that would not or could not
be performed at the same time on the basis of CPT® code
description or standard medical practices.
In those instances where it is proper and necessary to
report a code combination performed on the same day that
is normally prohibited by CCI, the CPT® modifier 59 Distinct procedural service should be applied.
Unbundling
Unbundling occurs when multiple procedures are billed
separately when the services are covered by a single comprehensive code. Never divide the components of a procedure when one code covers all the components. Procedures
should be recorded with the CPT® and or HCPCS level
II code(s) that most comprehensively describe the services
performed by the practitioner.
Unbundling can result from two problems:
1. Unintentional—results from not having a good
understanding of coding.
2. Intentional—when practitioners manipulate the coding to
maximize payment.
Medicare closely monitors physician billing practices for
possible abuse or fraudulent billing. Private payors also
watch for unbundling.
Unbundling Prevention Tips
1. Use current CPT®, ICD-9-CM, and HCPCS Level II code
books, as well as the current rules, regulations, and provider
manuals for Medicare and for private payors with whom you
have a contractual arrangement.
2. Educate yourself on CPT® guidelines, as well as the rules
and regulations of your payors. The Health Care Insurance
and Portability and Accountability Act (HIPAA) does not
excuse lack of knowledge for incorrect coding.
3. When using an encounter form/superbill/charge ticket,
specify the exact CPT® code and description. Always
have an area on the encounter form to add procedure and
diagnosis codes.
4. Code directly from the chart note or operative note.
5. Update codes annually. Remember: Guidelines and codes
are added, deleted and revised each year.
6. Avoid fragmented billing. Use your encounter form as key to
correct coding. You might add an “SP” next to the separate
procedures (discussed below) on your encounter form.
7. Make sure physicians provide the person coding the encounter with complete documentation and concise information.
Consult the physician if documentation is not adequate or if
documentation will not support the code selected.
8. Use correct modifiers to clarify or append circumstances
that can arise within the global package.
9. Coders must exercise caution when reporting integral
procedures. Medicare and Medicaid closely monitor
physicians’ billing practice for possible abuse or fraudulent
billing. Private payors also have the mechanisms in place to
scrutinize claims.
Performing the Chart Audit
The medical record serves a variety of purposes, and is
essential to the proper functioning of your practice—
especially in today’s complicated regulatory health care
environment. The medical record should contain detailed
information pertinent to the care of the patient, document
the performance of billable services, and serve as a legal
document that describes a course of treatment. Periodic
audits, whether internal or external, ensure that the record
adequately serves these purposes and meets with federal
and state regulations.
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Perform a Successful Chart Audit
Auditing your charts can be a valuable learning experience.
Four of the most important reasons to audit your medical
records are:
1. To assess the completeness of the medical record
2. To determine the accuracy of the physician’s documentation whether is be an E/M service, radiology report, surgical
report, etc.
3. To identify under-documented services
4. To uncover lost revenue
An auditor (internal or external) examines the documentation to determine whether it adequately substantiates the
service billed, and identifies medical necessity. If you do
not check the quality of your charts on an ongoing basis,
you may be unaware of incorrect or inappropriate documentation and coding practices, and areas of noncompliance with government and private payor guidelines.
There are five parts to auditing a medical record:
1. Performance of the audit
2. Reporting
3. Meeting and discussing results with the practitioner
4. Identifying any repayment or submitting missed charges
5. Ongoing periodic auditing and monitoring to identify
problem areas and areas that have improved
A medical record chart audit has no value unless all steps
are performed.
Audit Objectives
Prior to performing a chart audit, identify specific goals.
You can divide chart audit objectives into two main categories: 1.) revenue, and 2.) compliance with correct coding
policies.
Revenue
An audit’s revenue objectives involve examining coding
practices for lost revenue due to the improper use of codes.
This process also may reveal inappropriate billing to gain
higher reimbursement (which is an open invitation to a
payor audit). When considering revenue, look at:
yy underbilled services
yy overbilled services-frequency or upcoding
yy undocumented services
yy denied services
yy downcoded services
yy services not billed or missed charges
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Services Not Billed or Reported
Compare the medical record to the billing to identify services that are documented in the medical record, but are
not coded. This often is caused by ineffective communication between the provider and the billing staff, or lack of
knowledge on the part of the coders.
Overbilled and/or Underbilled Services
As with non-billed services, the search for overbilled or
underbilled services begins with comparing the chart
documentation to the billed codes. All services, including
E/M services, ancillary procedures or services, and surgical
procedures should be documented with sufficient detail to
allow coders to select the proper CPT®, HCPCS Level II,
and ICD-9-CM codes.
Undocumented Services
A good audit (review) will identify instances where codes
are billed without proper supporting documentation.
When a private payor, Medicare, or Medicaid requests
written proof of billed charges, the provider must be able
to substantiate the service. Some examples of commonlymisplaced information are laboratory test results, X-ray
reports, problem lists, and medication lists. You must be
able to defend documentation to support medical necessity
and be prepared to defend the documentation upon carrier/
contractor appeal, or in a court of law.
Under-documented Services
These are services that support a higher E/M service level
or other services, but the documentation does have enough
detail to report the service at the appropriate level, or to
report any additional ancillary or office procedures.
Denied or Downcoded Services
Downcoded services are services the payor determines
should be paid at a lower level of service. Analyze those
services that are denied or downcoded by payors to discover the cause. This information comes from comparing
the billed services to the Explanation of benefits (EOB) or
Remittance Advice (RA) portion of the payor statement.
Evaluating for Compliance
The second set of audit objectives involves evaluating the
documentation for compliance with Medicare, Medicaid,
and/or private payor standards. Not only are compliance issues important to the overall good management of
patients, they are also important for expedient and accurate
reimbursement.
Perform a Successful Chart Audit
When looking at compliance issues, consider:
yy Current patient data or patient demographic form
yy Superbill/charge ticket/encounter form
yy Physician signatures
yy Signed patient consent forms
yy Medicare limitation of liability waiver-Advanced Beneficiary
Notification
yy CMS 1500 or UB-04 claim forms
yy Individual Carrier Policies if applicable
yy Correct reporting of CPT®, ICD-9-CM, and HCPCS coding
yy Utilization patterns
Current Patient Data
The patient information sheet will identify the patient
demographics, as well as updated and complete insurance
information.
yy date of birth
yy address
yy nearest living relative
yy complete insurance information including copy of the card
in the chart
The patient information should be updated regularly.
Request that the patient with insurance sign the assignment of benefits form to ensure direct payment of insurance benefits to the provider. Update this record yearly.
Physician Signatures
A thorough audit will verify that all services and procedures
provided to a patient are signed or initialed by the provider.
The signature of the provider acknowledges that he/she has
performed or supervised the service or procedure.
An unsigned entry in a medical record may be viewed
by an insurance payor as nonperformance of that service.
Some areas of the country do not currently require an
original signature or the initials of the provider of the service. Some carriers will allow electronic signatures, initials,
and full signature. It is a good idea to check with each
local carrier in your area to determine the requirement.
However, CMS along with most major carriers have now
disallowed the use of rubber stamps (CR # 6698 and PIM
100-08 6698.3 and MM 6698).
Chart entries that are not in the physician’s handwriting
should be countersigned by the attending physician. This
includes medical services performed by:
yy Nurses
yy Medical assistants
yy Physician assistants
yy Nurse practitioners
yy Other staff
Signed Consent Forms
The medical record of each patient that undergoes a procedure involving significant risk should contain a written
consent form. Always obtain consent before conducting
an invasive procedure. The consent should state that the
patient has been informed about the procedure, its risks
and benefits, and any alternatives. It should also indicate
that the patient understood the issues discussed and has
given consent to treatment. This information may be kept
in a separate section or accompany the documentation of
the procedure.
Insurance Forms
An auditor should check claim forms—whether submitted
electronically or by hard copy—to see that they are completed correctly. Include all pertinent dates, and diagnostic
and procedural coding information necessary for payors to
generate reimbursement. If claims are submitted electronically, the medical billing system is a tool to generate the
insurance claim that was submitted.
Superbill/Charge Ticket
These forms are used to record the patient billing information. This may include the procedure and/or the diagnosis
code. Not all physicians use superbills, especially when
using the Electronic Medical Record. Reference this form
identifies the intended coding of the practitioner and helps
to identify data entry errors.
Beginning the Audit Process
A well thought-out plan is essential to carrying out a chart
audit that will yield useable data. The first questions to consider are:
yy What is the focus of the audit (e.g., new patient visits,
consultation, office, hospital, etc.)?
yy Are you performing a prospective or retrospective audit?
yy What is the number of charts you are going to review?
yy Is there a measure for the focus such as utilization patterns?
yy Has the provider been audited before where data is available?
 If “yes,” then a benchmark or standard exists;
 If “no,” then a standard for comparison may not exist.
yy What type of audit tool will you use?
 Electronic
 paper
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Chart auditing is an iterative process: Do not be discouraged if the answers to some of the questions above change
several times before being finalized. It is always a good
idea to inform the medical records manager or compliance
officer when you are conducting a chart audit. The records
manager can help locate the appropriate charts, arrange
an ideal time to review charts, and can assist with issues
related to confidentiality.
How to Conduct a Chart Audit
Step by Step
Before beginning the audit process you must do your
homework. You must analyze and determine what type of
records to audit; how many (sample size), and how you will
summarize and present results. Review the following issues
to consider:
1. Select type of services to review, which might include:
a. Office or Hospital
b. New versus established patients
c. Consultation
d. Nursing home visits
e. Surgical procedures
2. Identify measures (levels of services)
3. Identify patient population based on insurance carrier
4. Determine sample size (typically 10-20 charts)
5. Create or obtain audit tool (s) paper or electronic
6. Collect data (Perform the audit)
7. Summarize results
8. Analyze and apply results
9. Meet with the practitioner to discuss results and offer solutions for improvement
10.Refund overpayments and submit claims for missed charges
if applicable
The Steps
Although the chart audit process is not always necessarily
linear, this list represents the general steps involved.
Step 1: Identify Audit Objectives
An audit helps facilitate the maintenance of an accurate
and complete assessment of the organization’s coding and
reimbursement practices. The audit helps ensure compliance with external regulations and internal policies by
accurately reporting correct coding to insurance carriers.
Potential risk areas and areas for improvement that have an
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impact on the financial and clinical aspect of the practice
may be identified. The audit is also conducted to ensure
the documentation in the medical record supports the
CPT®, HCPCS Level II, and ICD-9-CM code(s) assigned.
Practitioners must have an opportunity to get involved
and support the coding and/or billing teams. Physicians
routinely should assign the code(s) for all services, and the
coding and billing team is best utilized to keep track of
the rules for the practitioners, and to make sure they have
the appropriate tools to code and document accurately.
Documentation is crucial to code selection, and physicians
must have help to cope with the overwhelming demands of
paperwork that they may believe adds little value to patient
care. Physicians appreciate feedback in coding because they
are interested in receiving the correct reimbursement, and
understand that coding directly affects payment for their
services.
When problem areas are identified, the focus can then
turn to education where most needed. Training needs vary,
and auditing allows the organization to design an education model to specific needs. Auditing also will provide
information on patterns and trends that may affect the
organization.
The Baseline Audit
A baseline audit informs the organization how it fairs in
relation to correct coding and billing, and serves as a tool
to identify errors. Most baseline audits are random and
should include all coding practices. The audit should be
a resident sampling of all records and services and should
include all physicians and practitioners in the organization.
Begin by auditing a random sample of records. A random
sample is one in which each record has an equal probability of being chosen for review (random sampling). If
you select specific records or levels of service, the audit is
not random, but a focused review. An example of selecting
a random sample would be to select dates of service and
a specific number of patient records for each practitioner. The records also should be recent (within past three
months), and are flagged for review upon completion of
the documentation and billing process.
Step 2: Sample Size
The audit sample should include a certain percentage of
patient encounters to ensure a representative sample. Auditing too few records may distort results, while auditing
too many records becomes too time consuming and labor
intensive, and normally is not any more effective. The compliance officer, office manager, and/or practitioner should
help determine the appropriate number of medical records
Perform a Successful Chart Audit
to review. A good sample size is 10 to 20 charts. It is a good
idea to concentrate on visits that took place during a specific
time period so that trends can be observed. Merely pulling charts at random will not always accomplish this goal.
Reviewing charts that are six months to a year old serves no
benefit. The OIG recommends five to ten random charts
per physician when conducting an audit.
Where Do You Perform the Audit?
An audit can be performed on-site, which gives the auditor
access to the entire medical record, as well as any pertinent
information the auditor might need when reviewing the
patient encounter. This is the preferred method of auditing. With an off-site audit, the auditor will only have
access to what was provided to review, such as the superbill/charge ticket, the claim form, and the patient record
for the date of service. There may be other documents
referenced in the note that are not available. In a facility
audit, many facilities will not allow records or copies to
leave the facility. These must be analyzed on site.
Different Type of Audits
As with prospective, retrospective and focused reviews,
there are different types of samples.
yy Random sample (any type, level of service, visit, or procedure)
yy Controlled sample (a specific level or type of service)
yy High volume services
yy High risk services
yy Frequent denials
yy Past errors
If the practice has conducted previous audits, past audit
reports might identify focus areas; whereas, if this is the
first audit conducted, the auditor might focus on a random
sampling initially.
Step 3: Develop or Select an Audit Tool
A good audit tool is important when auditing the medical record. If the auditor is conducting an evaluation and
management audit, for example, the auditor must identify
which set of guideline the practitioner is using, and the
tool needs to reflect the guidelines. If the auditor is reviewing surgical notes, a surgical audit tool should be used.
If an audit of psychiatric or ophthalmology records are
reviewed, the audit tool used would be specific to the specialty, and so forth. There are several samples of audit tools
in the addendum of this chapter you can copy and use.
Some auditors use an electronic audit tool to audit records.
This is generally in the form of software that will print
audit reports and analyze the data after you enter the detail
of the E/M level. Keep in mind: Medical necessity also
must be determined when reporting an E/M level. The
computer software does not have the capability to analyze
medical necessity. Sometimes the level selected by the
audit software affords a higher level of service based on
documentation alone, and the medical necessity element
cannot be incorporated into the software. This element is a
“thinking” process. A good clinical background is imperative when analyzing medical necessity.
Other Necessary Tools
You cannot audit successfully without additional tools to
help guide you. In addition to the audit tool (s) described
above, the auditor will need:
yy Evaluation and Management Documentation Guidelines
(1995 and 1997)
yy CPT® code book
yy ICD-9-CM code book
yy HCPCS Level II code book
yy Payer guidelines
yy Payment policies
yy CPT® Assistant references
yy AHA Coding Clinic references
yy Frequency reports by physician (utilization of levels of service obtained by the medical billing software)
yy Utilization based on specialty
(can be obtained by insurance carrier)
yy Physician’s fee schedule by insurance carrier
yy Medical Dictionary
yy OIG Workplan
yy Other coding references
Step 4: Perform the Audit
As stated earlier, auditing your charts can be a valuable
learning experience and provides much needed analysis for
compliance. Four of the most important reasons to audit
your medical records are to:
1. Assess the completeness of the medical record
2. Determine the accuracy of the physician’s documentation
3. Ensure the coding is correct (both procedure and diagnosis)
4. Uncover lost revenue
An auditor (internal or external) examines the documentation to determine whether it adequately substantiates the
service billed and identifies medical necessity. If the quality of the medical record is not reviewed on an ongoing
basis, incorrect or inappropriate documentation and coding
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practices may not be uncovered. Because compliance with
government and private payor guidelines is important, the
audit or medical record review is critical in all medical
practices. Be consistent when choosing a sampling of medical records to eliminate confusion.
Select patient encounters (chart notes) to review that are no
more than three months old. If you are auditing services
before the claim is submitted, audit services performed the
same week as the audit. If performing a retrospective audit,
for each patient encounter you will need the superbill/
charge ticket, patient chart or date of service, claim form
or billing record (validates what was submitted), and the
explanation of benefits or Remittance Advice.
Familiarize yourself with the chart organization, special
forms including the history form, problem list, medication
sheet, etc., and be familiar with the coding criteria for services provided.
yy New versus established patient
yy Consult versus transfer of care (referral)
yy Time based code requirements
yy Critical care services
yy Hospital services
When auditing a group of 10-20 charts, be sure they services are comparable. Hospital and critical care services
are like services, for example, as are office visits and office
consults. It is not recommended that you mix hospital, surgical, and office services on one audit report.
Audit a minimum of 10-20 medical records for each provider. Identify problem areas, such as:
yy Improper use of CPT® codes
yy E/M code(s) not supported by the documentation
yy Diagnosis code that is incorrect or does not support medical
necessity
yy Missing modifiers and/or incorrect modifier usage
yy Other procedures or services improperly reported
yy Incorrect diagnosis linkage
yy Services performed but not billed
Step 5: Complete the Review Analysis and
Summary Report
Complete the summary report identifying the number of
encounters documented correctly and incorrectly, other
coding issues, and suggestions for improvement. Audit
reporting mechanisms will be discussed later in the chapter.
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Step 6: Meet With the Practitioner
Schedule a meeting with the provider to review coding
errors, offer suggestions, and answer questions. Allow
enough time to review all the medical records in which
you found incorrect coding based on documentation. Provide handouts with official carrier and/or coding guidance
to the provider that will help him or her maintain compliance. Suggest periodic audits to monitor and maintain
compliance.
Step 7: Make Recommendations for
Improvement
An audit is not effective after completed if the auditor does
not develop constructive recommendations for improving
documentation. This might be accomplished by creating
“cheat sheets” or templates to help the physician/practitioner capture all the services provided during the patient
encounter, and to ensure that the documentation supports
the level of service based on the complexity of the patient
treated. A good way to identify recommendations is in the
report you develop for the provider after the audit is completed. You can identify utilization pattern abnormalities,
coding errors, and documentation errors when developing
your report.
Step 8: Provide Monitoring and Guidance
After the baseline audit the auditor—along with the practitioner, compliance officer and/or practice administrator—should decide, based on the audit results, how often
the practitioner’s documentation should be reviewed. For
example, if auditing 10 medical records and 40 percent
(four records) meet the documentation guideline requirements, it would be beneficial to perform audits more
frequently than for the practitioner who is 90 percent compliant with coding and documentation. The physician who
has more documentation and/or coding errors will need
help and guidance more frequently than the practitioner
who has minimal errors.
Perform a Successful Chart Audit
Audit Tools
The audit tool is a “must have” for any medical record auditor. There are a variety of pre-packaged audit tools for general use; however, it is beneficial for the auditor to create his or her own audit tool and tailor the tool to the specialty that is being audited.
A paper tool can be created in a template format in word or other software programs. Keep in mind that the tool should be compliant with coding and documentation guidelines.
Make sure before conducting the audit, you use a chart review checklist to help guide the scope and type of audit you will perform.
The sample audit tool on the next few pages outlines elements pertinent to the E/M guidelines. This is just a sample audit tools for
a general multi-system patient exam encounter for either the 1995 or 1997 guidelines. Review the chart review checklist and audit
tool below. You will use this audit tool when performing all exercises.
Chart review checklist
YES
NO
N/A
Consider the following items when preparing records for review:
1. Chart note/hospital note for date of service
2. Any previous notes referenced in chart being audited (e.g., “No change from 2/02/20xx”)
3. Supporting/supplemental information (history form, patient-assessment form, technician form, medication list)
4. Reference material, including an abbreviation list, common terminology, and signature list
5. Billing information indicating Current Procedural Terminology (CPT®), and International Clinical
Documentation, Ninth Revision, Clinical Modification (ICD-9-CM) codes submitted for service
6. Copies of claims of services reviewed
7. Remittance advice
Coding review
E/M coding review should encompass the following:
1. Review of the medical records, claims, and payments
2. Reconciliation that demonstrates items and services ordered by the physician or practitioner were
documented, rendered, and billed accurately
3. Review of physician coding and documentation:
4. Verification CPT® E/M coding assignment
5. Review of ICD-9-CM code assignment
6. Review of the chart for medical necessity
Comments:
The E/M audit form on next page may be used to complete an E/M coding review.
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Perform a Successful Chart Audit
E/M Audit Form Example
Patient Name:____________________ Date of service:
#:________________
HISTORY
/
/
Provider__________________ MR
 Chief complaint (required all levels):
History of Present Illness (HPI)
 Brief (1-3)  Extended (4 or more or update of 3+ chronic illnesses)
 Location
 Severity
 Timing
 Modifying factors
 Update 3+ chronic
 Quality
 Duration
 Context  Assoc. signs /symptoms
Review of systems (ROS):  None
 Problem pertinent (1)
 Extended (2-9)
 Complete (10+)
 Constitutional
 Cardiovascular
 Gastrointestinal
 Integumentary
 Endocrine
 Eyes
 Respiratory
 Genitourinary
 Neurological
 Hematologic/lymphatic
 ENT
 Musculoskeletal
 Psychiatric
 Allergic/Immunologic  All others negative
Past, family, and social history (PFSH):  None  Pertinent (1 of any)  Complete est. (2 of 3)  Complete new (3 of 3)
 Past: Allergies, current medications, immunizations, previous trauma, surgeries, previous illnesses/hospitalizations.
 Family: Health of parents, siblings, children. Family members w/ diseases related to the chief complaint.
 Social: Drug, alcohol, tobacco use. Employment. Sexual history. Marital status. Education. Occupational history.
SCORE: HISTORY COMPONENT
 Problem focused
 Expanded problem focused
CC; Brief HPI (1-3)
CC; Brief HPI;
ROS: None
Problem Pertinent (1 system)
PFSH: None
PFSH: None
 Detailed
CC; Extended HPI (4+)
ROS: 2-9 systems
PFSH-1 history area
 Comprehensive
 Not Documented
CC; Extended HPI;
Complete ROS; 10+
PFSH – 2 established patient
3 new patient
Body
Areas
Organ Systems
PHYSICAL EXAM
General multi-system examination (Body area/organ system elements of examination)
 Constitutional:  Vital signs: sit/stand BP, sup BP, temp, pulse rate, resp, ht, wt or  General appearance
 Eyes:  conjunctivae/lids,  pupils/irises,  optic discs
 ENT:  ext exam ears/ nose,  ext aud canal/tymp memb,  hearing assessment,  nasal mucosa/septum/turbinates,
 lips/teeth/gums,  oropharynx—oral mucosa, palates
 Respiratory:  resp. effort,  chest percussion,  chest palpation,  auscultation of lungs
 Cardiovascular:  palpation heart,  auscultation, exam of:  carotid,  femoral arteries,  abdominal aorta,
 pedal pulses,  extremities
 Gastrointestinal:  abdominal,  liver/spleen,  hernia,  stool sample taken,  anus, perineum, rectum
 Genitourinary:  Male: scrotum,  penis,  digital rectal exam of prostate
 Female:  pelvic,  ext genitalia,  urethra,  bladder,  cervix,  uterus, adnexa/parametria
 Musculoskeletal:  gait/station,  digits/nails,
Exam of head/neck or spine/ribs/pelvis, Rt upper or Lt upper or Rt lower or Lt lower:  inspect & palpate,
 stability,  motion,  strength & tone
 Skin:  inspect skin/sub-q tissue,  palpation skin/subcutaneous tissue
 Neurologic:  cranial nerves,  deep tendon reflexes,  sensation
 Psychiatric:  judgment/ insight,  orientation,  remote & recent memory,  mood & affect
 Hematological/lymphatic  neck, axillae, groin, other,  immunologic:
 Head, including the face  Neck:  neck (masses, symmetry, etc  thyroid  Chest (breasts):  inspection breast,
 palpation breast/axillae  Abdomen  Genitalia, groin, buttocks
 1 or more in detail
 Back, including spine
 Left upper extremity
 Right upper extremity
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Score: Physical Examination Component
o Problem focused
o Expanded problem focused
Medical decision making
Number of diagnoses and management
options
Self limiting or minor problems (stable,
improved, or worsening); maximum of 2 points
Established problem—stable, improved
Established problem—worsening
o Comprehensive
o Not documented
Amount and complexity of data
Pts Total
1
Ordered and/or reviewed clinical lab
1
1
2
Ordered and/or reviewed radiology
1
Ordered/reviewed test in the CPT®
1
medicine section
Discussed tests with performing or
1
interpreting physician.
Independent visualization and direct view of 2
image, tracing, specimen
1
Decision to obtain old records/additional
HX from other than patient, e.g., family,
caretaker, prev. phys.
Reviewed and summarized old records and/ 2
or obtained history from someone other
than patient.
Total points:
Pts
New problem—no additional work-up planned 3
Maximum of 1 problem given credit
New problem—additional work-up planned
4
Total points:
o Detailed
Total
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Table of Risk—The highest level in ONE area determines the overall risk
Level
Presenting problem(s) or
Diagnostic procedure or
Management options
Minimal
o One self-limited or minor
o Laboratory tests requiring
o Rest o Gargles
o Elastic bandages
o Superficial dressings
o
problem, e.g., cold, insect bite,
tinea corporis
Low
o Two or more self-limited or
o Physiologic tests not under stress, e.g.,
o Over-the-counter drugs o
minor problems
pulmonary function tests
Minor surgery with no identified
o One stable chronic illness, e.g., o Non-cardiovascular imaging studies with risk factors
well controlled hypertension or
contrast, e.g., barium enema
o Physical therapy
non-insulin-dependent diabetes,
o Superficial needle biopsies
o Occupational therapy IV
cataract, BPH
o Clinical laboratory tests requiring arterial fluids without additives
o Acute uncomplicated illness
puncture
or injury, e.g., cystitis, allergic
o Skin biopsies
rhinitis, simple sprain
o
Moderate
o
High
o
18
venipuncture
o Chest x-rays o EKG/EEG
o Urinalysis
o Ultrasound, e.g., echo o KOH prep
o One or more chronic illnesses o Physiologic tests under stress, e.g., car-
with mild exacerbation, progres- diac stress test, fetal-contraction stress test
sion, or side effects of treatment
o Diagnostic endoscopies with no identio Two or more stable chronic
fied risk factors
illnesses
o Deep needle or incisional biopsy Cardioo Undiagnosed new problem
vascular imaging studies with contrast and
with uncertain prognosis, e.g.,
no identified risk factors, e.g., arteriogram
lump in breast
cardiac cath
o Acute illness with systemic
o Obtain fluid from body cavity,
symptoms, e.g., pyelonephritis,
e.g., lumbar puncture, thoracentesis,
pneumonitis, colitis Acute compli- culdocentesis
cated injury, e.g., head injury with
brief loss of consciousness
o One or more chronic illnesses o Cardiovascular imaging studies with
with severe exacerbation, progres- contrast with identified risk factors Cardiac
sion, or side effects of treatment
electrophysiological tests
o Acute or chronic illnesses or o Diagnostic endoscopies with identified
injuries that may pose a threat
risk factors
to life or bodily function, e.g.,
o Discography
multiple trauma, acute MI, pulmonary embolus, severe respiratory distress, progressive severe
rheumatoid arthritis, psychiatric
illness with potential threat to self
or others, peritonitis, acute renal
failure
o An abrupt change in neurologic status, e.g., seizure, TIA,
weakness or sensory loss
AAPC
1-800-626-CODE (2633)
o Minor surgery with identified
risk factors
o Elective major surgery (open,
percutaneous or endoscopic) with
no identified risk factors
o Prescription drug management
o Therapeutic nuclear medicine
o IV fluids with additives
o Closed treatment of
fracture or dislocation without
manipulation
o Elective major surgery (open,
percutaneous or endoscopic with
identified risk factors)
o Emergency major surgery
(open, percutaneous or
endoscopic)
o Parenteral controlled substances
o Drug therapy requiring intensive monitoring for toxicity
o Decision not to resuscitate
or to de-escalate care because of
poor prognosis
Perform a Successful Chart Audit
Decision-making total: —2 of 3 must be met
Pts
Number of DX Amount of data Risk of complications
1
o Minimal
o Minimal
o Minimal
2
o Limited
o Limited
o Low
3
o Multiple
o Extensive
4
o Moderate
o Extensive
o Moderate
o High
Medical decision-making level
o Straight forward
o Low complexity
o Moderate complexity
o High complexity
Score: E&M service
History
Exam
Medical decision-making level
o Problem focused
o Expanded problem focused
o Detailed
o Comprehensive
o Problem focused
o Expanded problem focused
o Detailed
o Comprehensive
o Straightforward
o Low complexity
o Moderate complexity
o High complexity
Number needed: o 2 of 3 (MDM must be 1 of 2 to support medical necessity)
Please review the medical record for the following elements:
Yes
No
N/A
o
2. Is the medical record legible?
o
3. Is the attending/teaching physician’s note written by the billing physician?
o
4. Does the date of service billed agree with the date of the progress note?
o
5. If a resident was involved in providing this service, review teaching physician documentation o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
1. Was the medical record for this service found?
and answer the following questions:
A. Does this service meet the primary care exception?
B. Does the medical record demonstrate teaching physician involvement?
C. Does the teaching physician’s note link to the resident’s note?
6. Does the documentation support the ICD-9 codes billed?
7. Does the documentation support the level of service billed?
o Dictated o Handwritten EMR o o Form o Illegible o Note signed
o Signature missing o Diagnosis Code(s) supported o Other Service provided
TIME o A description of what was discussed must also be detailed
Face-to-face time: Indicate the total face-to-face time (or total floor time for inpatient services) spent with the patient
Counseling/Co-ord. Time: Time spent counseling or coordinating care (must be greater than 50% of total face-to-face/floor time)
Code (s) selected: _____________ Code(s) audited: ___________ o Over
o Under o Correct o Miscoded
Dx code(s) billed: _ ____________ Dx code(s) documented: _ ____________ Other services _______________
Comments:
Auditor’s Signature ______________________________________________________
www.aapc.com
19
Perform a Successful Chart Audit
The Audit Report
The audit report should be quick and easy for the practitioner to read. A 50-page report is less likely to be reviewed. You can design
your own report, but listed below are elements that must be included:
1. Practice name
2. Physician or provider audited
3. Auditor’s name
4. Date of audit
5. Findings
6. Recommendations
7. Summary based on findings and recommendations
Review the example of a simple audit report that is easy to read and understand, below:
20
AAPC
1-800-626-CODE (2633)
Perform a Successful Chart Audit
Medical Record Chart Audit Summary Report
Practice: ABC Medical Group
Date of Audit: 09/15/20xx
Provider: Mark Welby, MD
Auditor: Annie Taylor, CPC, CPMA, CEMC
A total of 10 records were reviewed using the 1997 Cardiovascular System and 1995 General Multi-system E/M Guidelines, CPT®
Coding rules, and Insurance carrier guidelines. Chart notes were received for the following physicians:
John Doe, M.D
The findings and recommendations based on the review of the office, and diagnostic procedures are as follows:
Findings
E/M documentation in the record appeared to support service billed
6
E/M documentation in the record appears to support a lower level of service than billed
3
Documentation appeared to be missing or could not be located in the Record
1
Findings and Recommendations:
1. Three medical records reviewed (chart #1-3) for a comprehensive level consultation (99244) did not contain all the key component requirements. The documentation requirements for a level four office or other outpatient consultation (99244-99245) require the following three
elements to be met:
 Comprehensive History
 Comprehensive Examination
 Medical Decision Making Moderate
The documentation concerned contained a comprehensive history with decision making supporting the comprehensive consultation
(99244), but the examination did not appear to meet either the 1995 or 1997 guidelines for all three consultation codes reported.
Recommendation: Review the exam requirements for comprehensive level of service for both the 1995 and 1997 documentation
guidelines.
2. One date of service (chart #7), the history met the detailed level for the established patient level four (99214 visit), but the examination was
expanded problem focused and the medical decision making was low complexity. Two of three key components must be met to report the
level of service. Medical necessity did support a 99214, but one of the other key components must contain the detail to support the level of
service billed.
Recommendation: Review the documentation requirements for a level four new and established patient visit for both the 1995 and
1997 documentation guidelines.
3. For one patient, a level four established patient visit was reported, but the documentation supports billing the EKG, Echo, and Doppler studies in addition to the evaluation and management service. There was evidence the services were provided to the patient on the date of service
reviewed.
Recommendation: Review the importance of capturing all charges and service performed and documented during the patient
encounter.
4. One date of service (chart #7) the documentation was not available and could not be located by the compliance manager. After further investigation it was disc…