Medicare Contractor Identifies the Risks of Undercoding

Most compliance professionals, providers, and coders are worried for “overcoding,” or reporting a service or process not correctly supported by documentation when it comes to the audit results. However, overcoding is surely a major issue—and one that can get you into dangerous hot water—that does not mean you are making the correct selection to “play it so securely” by undercoding, or reporting a lower-level service than is supported by the documentation.

A famous Medicare contractor in Delaware, Pennsylvania, New Jersey, Maryland, and Washington, D.C., Novitas, has recognized undercoding as major problem, in its own right.

Comprehensive Error Rate Testing (CERT) errors have been detected by Novitas in case to recognize areas where additional education may be required. There has been seen an increasing trend of under coding in evaluation and management (E/M) services during recent days. It is very significant to code the level service that is supported by your documentation…

The Medicare contractor i.e. Novitas goes on to appreciate that, far from offering “insurance” against blames of overcoding, undercoding results in improper payments that adversely impact the payer and providers

You’re most likely inquiring at this point: “Are not I saving Medicare program dollars by billing lower levels of services? What is the issue with under coding?” Comprehensive Error Rate Testing is believed to be a measure of inadequate payments. The aim of Novitas and CMS is to pay claims that meet the needs of Medicare and pay them at the correct level of service. We didn’t pay the claim correctly and it is counted as an improper payment error when there is an underpayment because of under coding…. Under coding errors can statistically affect the calculated error amounts in the tens of millions of dollars.

The undercoding also strongly impacts the patients and data negatively that Medicare and other payers utilize to calculate payments, going forward:

"The true level care that is given to Medicare beneficiaries is misrepresented by undercoding. To calculate future Medicare payments and detect trends in healthcare delivery, these statistics are used. The patterns of undercoding might be considered as aberrant and open your practice up to audits and reviews. Furthermore, your practice revenue is also affected by undercoding. You’re not being rightly paid for the level of service you give to your sufferers. To correct the under coded claims can mean very expensive appeals".

The moral of the lesson is that undercoding is the no way to keep assures the compliance—in fact, it is a compliance risk. The key to success is that practices should work hard to report services at the level supported by provider documentation, or what Novitas describes “correct coding.” “When you practice correct coding, coding the level of service supported by your documentation, we all win – you, your patients and the Medicare program”, the payer correctly summarizes.