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Caveat Emptor

“The Truth About Evaluation and Management Services & Proprietary Algorithms”

by Sean Weiss, Partner & VP of Compliance

We have, and will remain in, an industry dominated by fancy terms like predictive analytics and artificial intelligence and words such as proprietary determined by marketing teams at various vendors trying to get their piece of the proverbial health care pie to grab your attention. So, I am guessing by now you have either googled the term caveat emptor, you knew it from the start or simply didn’t care. For those who do not know the term, Caveat emptor is the Latin phrase for buyer beware and I will say right out of the gate I call BS! By now you, my loyal reader, have figured out that I call it as I see it and after 25-years of working in this industry and surrounding myself with folks way smarter than me, I have seen just about every scheme, scam and unethical way someone can dupe a physician, unsuspecting manager or insurance company.

With all of that said, let’s discuss the possibilities regarding the development of an algorithm for selecting a level of Evaluation and Management Service (EM). Can it be done? Absolutely, but not in the way that some out there want you to believe it can be done. As you all know, when I talk about technical terms, I always want to make sure that I define them and, in this article, it is no different. The word proprietary means: is relating to ownership, that one was easy. The word algorithm means: A process or set of rules to be followed in calculations or other problem-solving operations, which are typically performed by computers. Since we are now on the same page with those terms, let’s talk about them with respect to EM services. Because outside of the American Medical Association (AMA) and The Centers for Medicare and Medicaid Services (CMS) (maybe Marshfield with their guidelines – keep this term in the back of your mind for later), I am not really sure anyone can claim proprietary rights to EM service codes. I am sure someone will argue that vendors and/or consultants are not claiming proprietary rights of the EM codes but instead their claim(s) are for what they call their “Proprietary Algorithm” for how they calculate levels of service. Fair enough. However, didn’t the AMA and CMS also determine how EM codes are supported at the various levels? Yeah, that’s right, they did do that:

  • For a 99204, all three major criteria (history, physical exam and medical decision making) must be met. A 99214 requires only two of the three major criteria.
  • For a 99204, the review of systems must include at least 10 systems or body areas. A 99214 requires a review of only two.
  • For a 99204, the past, family and social history must cover all three areas. A 99214 requires only one area.
  • For a 99204, the physical exam must cover at least 18 bullets from at least nine systems or body areas. A 99214 requires at least 12 bullets from at least two systems or body areas.
  • Both require 2 out of 3 (Number of Diagnosis or Management Options, Amount of Complexity to be Considered, and/or Overall Risk) components of Medical Decision-Making at a Moderate level.

Wouldn’t the above constitute an Algorithm? I mean, sure, you can create a source code within a program to take into account each element checked by a provider or their support staff in each of the categories and then sum it to tell you whether it’s a level III, IV or V. For those of us that have been around prior to the advent of Electronic Health Records (EHRs) remember that our algorithm was determined in our mind as we used a template with each element and its sub-parts broken out and we checked the boxes for what was documented and then, at the end, we counted it all up and arrived at the level. Now, granted some of us were better counters than others, but I think you get my point.

To further address the phrase “Proprietary Algorithm,” we also need to agree that the creation of one would strictly be based on an ability to quantify elements of the code(s) such as what I outlined above (History, Physical and/or Medial Decision-Making). The fact is, if Medical Necessity of the service is not established, the all the counting you do is really worthless. Why is “Medical Necessity” so critical? Simple – Medicare defines it in their Program Integrity Manual (PIM) as the “Overarching criteria in addition to the individual elements of the CPT code.” Beyond that, there is no weighting (Quantification) for “Medical Necessity” because it is all based on clinical qualification. Medical Necessity is subjective and any attempt to quantify it would be futile since, as you will see in just a bit, if the insurance companies don’t agree then all that fancy calculating was all for naught.

As always, I love to get others take on topics like this and to debunk claims of ability to create an algorithm to code for an EM based on medical decision-making, I reached out to my Yoda, Frank Cohen for a practical explanation – “This builds a model that codes by presumption rather than reliance on the guidelines. From a statistician’s perspective, they are saying that the null hypothesis (the status quo, per se), is that every code is a level four and the only way it isn’t is if there is evidence to the contrary. Correct coding, on the other hand, presumes that there isn’t any code and it requires an interpretation of the guidelines to create one. In my opinion, coding by presumption is the antithesis to coding by guidelines and we both know which one of those is the correct way to code.”

The other thing I often hear vendors trying to do is to interchange medical necessity with Medical Decision-Making (MDM); so, what about it? Sure, you can quantify MDM based on a combination of 2 of the 3 aspects as outlined above but again, the MDM is an element, nothing more than a vessel to help drive a level of service up or down (99201 – 99215) based on the work a provider performs. Again, outside of the overall risk, to a degree the MDM is objective, meaning you either did it or you didn’t. It is honestly that simple. In looking at Medical Decision-Making and Medical Necessity, folks love to use these terms interchangeably but at the end of the day they are not. As I have stated, Medical Decision-Making can be quantified where Medical Necessity has to be qualified by the treating provider. Medical Necessity most often is associated with Local Medical Review Policies (LCDs).

Listen, I, along with my team on behalf of some of the largest law firms in the country, handle more OIG Self-Disclosure Protocols, False Claims Act, and Health Care Fraud Statute cases than you can shake a stick at. So, stop worrying about counting elements and worry more about the quality of the information contained within the progress notes and whether or not the medical necessity of the encounter was established. The next time a vendor or a consultant tells you they can help you bill higher levels of service because they are “Less Conservative” in their scoring or they say they have developed a “Proprietary Algorithm,” call it what it is; total and utter BS and here is why. When you ask them to define what their proprietary algorithm is and what it is they actually “Developed,” once they stop speaking in circles, you will find that it is absolutely nothing! Please believe me, taking shortcuts or trying to find alternative ways to code services at higher-levels to achieve better reimbursements is not worth it unless your notes can truly support it. I am all for maximizing reimbursement through complete and accurate coding but when a vendor starts off with, “I can increase your profits significantly,” it’s best you move on without them. When someone calls me or our team, we begin with “Let’s look at your documentation to identify vulnerabilities or gaps that may result in overpayments and/or loss of revenue for the organization and insure we are compliant with the published guidance of your MAC and payor contracts” which I believe is the best, most honest and compliant way to operate. Again, call me conservative, but I can assure you none of my clients have ever paid back a dime to a payor because we took a conservative approach and encouraged the provider(s) to choose a lower level of service because their documentation failed to substantiate what they wanted to bill. We live and work in one of the most regulated industries with auditors and contractors of the government and private payors searching for pennies, nickels, dimes, and quarters under every rock they can lift so, taking unnecessary chances is just not worth it.

If I have offended any of you, my loyal readers, by using the term BS, before you get too upset know it stands for “Bull Slop” (after all, I am just a good ole boy from South Georgia). Now you know the next time a vendor tries to peddle their EM Calculator or EM Software or some auditing consultant trying to generate business for coding services based on some revolutionary, proprietary whatever you’ll know its Bull Slop!

Very few things in life anger me more than unethical and slimy people trying to make a quick dime off of gullible or unsuspecting physicians trying to get paid fairly for the services they render. I have been called a lot of names during my career, but the one I really appreciate is being called conservative; I honestly consider it a compliment! I have worked tirelessly for 25-years advocating on behalf of physicians from North to South and East to West and all points in between in this amazing country of ours. I have worked on a number of client cases in just the past 3-years based on demands for tens of thousands of dollars up to tens of millions of dollars where demands for refunds to the payors were made in addition to civil money penalties and criminal convictions simply because “physicians should have known” but put their blind faith into a “Consultant” who couldn’t code their way out of a CPT or ICD manual or some vendor claiming to increase their revenues exponentially. It is so frustrating and honestly, if I were one of these providers, I would seek legal remedies to the fullest extent the law allows.

So now that I vented, I will get off of the proverbial “Soap-box” and put some evidence behind what I previously stated regarding an inability to create an algorithm to determine “Medical Necessity”. In a published report by The Department of Health and Human Services “Medical Necessity in Private Health Plans,” a report was prepared by the Center for Health Services Research and Policy, Department of Health Policy, The George Washington University School of Public Health and Health Services under contract number 01M008689 for the Substance Abuse and Mental Health Services Administration (SAMHSA), U.S. Department of Health and Human Services (DHHS). The authors of the study argue the following three (3) points:

  1. “The first is that merely because a recommended treatment falls within the zone of professionally accepted medical practice does not mean it must be covered. Only one source (the National Health Law Program) confines the evidence to the opinion of the treating physician.
  2. The second is that a recommended definition of medical necessity should be multidimensional and should consider factors such as cost, convenience, and relative effectiveness compared to other treatments based on various forms of evidence.
  3. Third, the authors uniformly recommend broadening the scope of when an intervention can be considered necessary (i.e., not merely to diagnose and treat an illness but also to improve functioning, avert deterioration, and maintain functioning).”

The special report continues by addressing the standards created by The American Medical Association “The American Medical Association (AMA), representing physicians (including psychiatrists), has created a prototype medical necessity definition as part of its Model Managed Care Contract project: Section 1.9 defines medically necessary/medical necessity as health care services or products that a prudent physician would provide to a patient for the purpose of preventing, diagnosing, or treating an illness, injury, disease, or its symptoms in a manner that is a) in accordance with generally accepted standards of medical practice; b) clinically appropriate in terms of type, frequency, extent, site, and duration; and c) not primarily for the convenience of the patient, physician, or other health care provider.” I find it fascinating how the authors of this special report further analyze the AMA position on “Medical Necessity”: “Like the others, this definition is multidimensional but it focuses the utilization review on what a prudent physician would conclude based on the evidence rather than what the insurer would determine. While the definition is crafted in such a way as to transfer more medical decision-making power back to the provider, the practical impact of this distinction is difficult to assess, since the decision remains reviewable and the review is multidimensional. (WOW! Read that last sentence again) However, cost considerations as an explicit measure are removed. By using the “prudent physician” rather than the insurer as the standard of measurement where judgment is concerned, the definition seeks to focus the determination on “generally accepted” medical opinion (and thus the phenomenon of multiple schools of thought) rather than the opinion of utilization review professionals who may or may not be physicians and who view their task as selecting the single best form of treatment. Thus, in an appeal made under the AMA definition, a claimant would be able to introduce a wide range of schools-of-thought evidence from “prudent physicians” to show the variation in treatments that prudent physicians might recognize.” Given the above, is there anything in this language that would lead any of you reading this to believe that you can create some sort of “Algorithm” to determine the medical necessity? Yes, I know someone will say, “Sean, what about the Nature of Presenting Problem, can’t that be used to create an algorithm?” The answer is maybe/probably not if you look how it is laid out. There is not much there to lead someone to a quantifiable outcome unless they come up with their own weighting but again, the big question is whether or not an insurance company would agree with it and adjudicate the claim. The information on the Nature of Presenting Problem comes from: https://fpnotebook.com/manage/billing/EmNtrOfPrsntngPrblm.htm

 

II.     Nature of Problem: Minimal

A.     Criteria

1.     Problem does not require physician presence

2.     Service provided under supervision of a physician

B.     Related Codes

1.     E/M Established Outpatient: CPT 99211

III.     Nature of Problem: Self-limited or Minor

A.     Criteria

1.     Minimal number of diagnoses or management options

2.     Minimal or no data to be reviewed

3.     Minimal risk of complications, morbidity, mortality

B.     Related Codes

1.     E/M New Outpatient Visit

a.     CPT 99201

2.     E/M Established Outpatient Visit

a.     CPT 99212

3.     E/M Emergency Services

a.     CPT 99281

4.     E/M Consultation Services

a.     CPT 99241

IV.     Nature of Problem: Low Severity

A.     Criteria

1.     Limited number of diagnoses or management options

2.     Limited amount or complexity of data to be reviewed

3.     Low risk of complications, morbidity, mortality

B.     Related Codes

1.     E/M New Outpatient Visit

a.     CPT 99202

2.     E/M Established Outpatient Visit

a.     CPT 99213

3.     E/M Emergency Services

a.     CPT 99282

4.     E/M Consultation Services

a.     CPT 99242

V. Nature of Problem: Moderate Severity

A.     Criteria

1.     Multiple diagnoses or management options

2.     Moderate amount or complexity of data to be reviewed

3.     Moderate risk of complications, morbidity, mortality

B.     Related Codes

1.     E/M New Outpatient Visit

a.     CPT 99202

b.     CPT 99203

c.     CPT 99204

d.    CPT 99205

2.     E/M Established Outpatient Visit

a.     CPT 99213

b.     CPT 99214

c.     CPT 99215

3.     E/M Emergency Services

a.     CPT 99283

4.     E/M Consultation Services

a.    CPT 99243

b.    CPT 99244

c.     CPT 99245

VI.     Nature of Problem: High Severity

A.     Criteria

1.     Extensive diagnoses or management options

2.     Extensive amount or complexity of data to be reviewed

3.     High risk of complications, morbidity, mortality

B.     Related Codes

1.     E/M New Outpatient Visit

a.     CPT 99204

b.     CPT 99205

2.     E/M Established Outpatient Visit

a.    CPT 99214

b.    CPT 99215

3.     E/M Emergency Services

a.     CPT 99284

b.    CPT 99285

4.     E/M Consultation Services

a.    CPT 99244

b.    CPT 99245

 

Earlier, I talked about the term “Guidelines” – “Guidelines may be issued by and used by any organization (governmental or private) to make the actions of its employees or divisions more predictable, and presumably of higher quality.” (https://en.wikipedia.org/wiki/Guideline) Hmm, so that means a guideline is just a guideline, right? Unless of course these guidelines have gone through a formal rule-making process or have been promulgated into law. So, this means that EM Guidelines are just guidelines and what was outlined in the special report above rings true in that Medical Necessity is ultimately determined by the payor and their medical director or other qualified health care professionals leaving open the door to interpretation based on the subjective nature of the information contained within the guidelines thus eliminating the probability that an algorithm would be of any value. So, the next time a vendor tells you they have a better way to code EM Services resulting in more money to your practice based on a proprietary algorithm, respond with Bull Slop, if my providers documented better they would qualify for the higher levels of service.

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