Advanced Revenue Cycle Analytics: An Overview

Recently, I’ve been asked more and more about correctly billing New or Established patient visits.  You can find the answer buried deep within a 227 page Medicare Claims Processing Manual. If a patient has been seen within the last three years, by a physician in the same practice and the same sub-specialty then you cannot bill a new patient visit.

Essentially there are three questions that need to be answered.  If the answer to all three questions is yes, then it is an established patient visit.  If the answer to any of the three questions is no then you can bill a new patient visit.

Have we had a face to face visit with this patient:

  1. In this practice (TaxID)?
  2. In this subspecialty?
  3. Within the last three years?


Cost to Your Practice When E&M Codes are Billed Incorrectly?

When practices incorrectly bill for a new patient visit this results in a quick denial from the payer.  This results in an AR adjustment for the lower expected reimbursement and the revenue cycle work to correct and resubmit the claim.  The estimated total cost for a denied claims is $25.  For a physician that sees 20 patients per day, incorrectly billing a new patient visit on 2% of their encounters costs $2,640 per year.

Physician time is strained, and the complexity of coding is not high on most physician priority lists.  Even if this is done correctly 97% of the time, the mistake can be a costly gift directly back to Medicare and commercial payers.  The average Medicare reimbursement for a Level 3 New Patient Visit (99203) is $35 more than the same Level 3 Established Patient Visit.  For a physician that sees 20 patients per day, failing to bill for the new patient visit on 3% of their encounters costs over $5,544 in lost revenue each year.

While incorrectly billing a new patient visit can be headache, it is not nearly as dangerous and difficult to detect as failing to bill for a new patient visit.  Payers will deny the incorrectly billed new patient visit, however if you submit an established patient visit when a new patient visit could have been billed the payer will simply pay the established patient visit and that revenue will be lost forever.  With rising operating costs and reimbursements continuing to decline many practices can no longer afford to ignore these mistakes.

For a 10 physician practice who correctly chooses the new vs established patient visit 95% of the time the 5% error rate costs the practice $26,400 in denied claims and lost revenue of $55,440.

Can my Practice Bill E&M codes correctly?

How can practices eliminate these mistakes?  The answer cannot be to place this coding burden on physicians.  Physician burnout is already at an all-time high and asking physicians to be coders is bad for physician productivity and revenue cycle outcomes.  Practices cannot afford to hire coders to review all of these encounters looking for the 5% errors, as the labor cost would be too high to justify correcting the mistakes.

White Plume helps physician practices improve revenue cycle outcomes to correct these mistakes while protecting physician productivity.  AccelaSMART retains patient history to alert revenue cycle staff only in the event that an E/M code is billed incorrectly.  For the 10 physician practice mentioned above, revenue cycle staff could correct all of the errors, prevent unnecessary denials and capture additional revenue in less 1 minute per day.  Have questions about E/M coding, or improving revenue cycle outcomes?  We would love to hear from you!