The Office of Inspector General recently released a report highlighting what should be a striking concern to physicians regardless of practice setting. In a report released by the OIG in May titled Improper Payments for Evaluation and Management Services Cost Medicare Billions in 2010, the OIG announced that Medicare inappropriately paid $6.7 billion for claims for E/M services in 2010 that were incorrectly coded and/or lacking documentation, representing 21 percent of Medicare payments for E/M services that year.

Additionally, the OIG indicated 42 percent of claims for E/ services in 2010 were incorrectly coded, which included upcoding and downcoding, and 19 percent were lacking documentation. Nearly 7 percent of claims for E/M services in 2010 were both incorrectly coded and insufficiently documented, translating into 55% percent of claims for E/M services in 2010 either were incorrectly coded and/or lacking documentation.

Given the fact Medicare paid $32.3 billion for E/M services in 2010, representing nearly 30 percent of Part B payments for that year, rest assured Medicare will be focusing significant resources through their Medicare Administrative Contractors to significantly reduce this error rate.

What can physician practice and hospital administrators do immediately to address any physician documentation deficiencies that may be prevalent in their practices? Design and implement a focused physician clinical documentation education training initiative to improve their physician’s awareness and knowledge of best practice strategies for effective clinical documentation that supports their clinical analytical skills, problem solving abilities and complexity of medical care provided. Most importantly, physicians need to appreciate and understand their duty to demonstrate medical necessity for all services provided or tests ordered.

One particular area physicians generally are lacking in understanding is the requirement to show and describe the patient care provided to the extent the documentation clearly demonstrates medical necessity for their work.  E/M services must be medically reasonable and necessary, in addition to meeting the individual requirements of the CPT code that is used on the claim.According to CMS, “[I]t would not be medically necessary or appropriate to bill [for] a higher level of [E/M] service when a lower level of service is warranted.”Physicians are responsible for ensuring that the claims they submit to Medicare accurately reflect the E/M services provided and the billing levels corresponding to those services.

DocuComp LLC is a physician owned and managed clinical documentation education organization that is dedicated to peer-to-peer physician documentation improvement in the office/ambulatory & inpatient settings.  Learn more about our Clinical Documentation, Physician Advisor, and Denials Avoidance & Appeals Management programs at

Betty B. Bibbins, MD, CHC, CI-CDI, CPEHR, CPHIT
CEO & Executive Physician Educator
DocuComp LLC

Leave a Reply

SMA Menu