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Practicing Small Potatoes
By Rachel M. Mitchell, CPC-H

The word is out that small practices typically think that the Centers for Medicare and Medicaid Services (CMS) will never audit them. Our consultants have even heard “I am small potatoes, they will never look at me”. This kind of thinking is exactly what caused two physicians in rural Virginia to pay a hefty pro-rated fine.

Three years ago the two physicians were flagged by the CMS computer system as charging the most comprehensive evaluation and management hospital visits in the entire state of Virginia. Naturally, the practice was audited. Lack of documentation was discovered and a significant fine was charged.

As coding and billing consultants we observe practices billing patients for disallowed amounts on insurances with which they are contracted. We see advanced beneficiary notices (ABN’s) filled out incorrectly or abused. Most recently, practices are neglecting to use the Center for Medicare and Medicaid Services required ABN that went into effect September 1, 2002. Our billers have even been asked to change diagnosis codes on claims that were originally denied for medical necessity. Some other interesting issues noted are billing for procedures and E&M’s in which no documentation exists, as well as offering discounts to patients with insurance. As you can see, serious problems do exist and coding and billing audits can help prevent them.

Coding and billing audits should be conducted at minimum twice per year. Most billing and coding consultants recommend that audits be performed quarterly. Audits will ensure a lawful as well as ethical billing practice. Something else to consider is that paying more money for employees who are highly qualified will prove to be more cost effective than hiring people with little to no experience and paying them significantly less. Hiring efficient and experienced staff reduces training time as well as errors leaving more time for focus on the work itself.

Despite focusing on healing the sick, physician practices are businesses. Physicians must concentrate on surviving in hard times. Because of this, practice decisions can be aggressive but must not lead to billing fraudulently or abusively. Don’t be fooled by the size of a practice. Small potato mentality is exactly what CMS is searching for at this moment and they are doing everything in their power to educate the public on reporting fraud, abuse and privacy breaches.

For more information regarding this article or other previous articles, contact Ms. Mitchell at rmitchell@ams-nc.com or 919-477-5152.