. 
PROBLEMS  WITH  CODING  OF 
PHYSICIANS  SERVICES: 
MEDICARE  PART  B 
.  OFFICE  OF  INSPECTOR  GENERAL 

OFFICE  OF ANALYSIS  AND INSPECTIONS 
JANUARY  1989  PROBLEMS  WITH  CODING  OF 
PHYSICIAN  SERVICES: 
MEDICARE  PART  B 
Richard  P. Kusserow 
INSPECTOR  GENERAL 
OAI-04-88-00700  JANUARY  1989  EXECUTIVESUMMARY 

. 
PURPOSE 

Health servicesand supplies arereported and billed to Medicare by way of a numeric coding 

system. This inspection was conducted to: 

(1)  determine whether there are significant problems regarding coding of physician office 

and hospital visits; 
(2)  identify  and examine reasonsfor coding problems; and 
(3)  recommend corrective measures,asappropriate. 
BACKGROUND 
Medicare is a federally funded program providing health care to the aged and disabled. The 
program is administered by the Department of Health and Human Services,Health Care 
Financing Administration  (HCFA). 
Medicare is divided into two parts. Part A includes hospital servicesand supplies. Part B in
cludes physicians servicesand durable medical equipment such as wheelchairs. This in
spection deals with Part B.  Paymentsfor Part B Servicesand supplies are made through 
private insurancecompanies,known as carriers, working under contract with HCFA. 
In 1983, HCFA required all carriers to institute the HCFA Common ProceduresCoding Sys
tem (HCPCS). The useof HCPCS was intended to bring about uniformity  in interpretation 
and reporting of medical servicesand supplies provided to Medicare beneficiaries. Under 
HCPCS, physician servicesarereported asfive-digit  codesdefined in the American Medical 
Associations Current  Procedural  Terminology  (CPT).  Some services,such asphysician of
fice or hospital visits, are also designatedby a procedure level which takesinto considera
tion the wide variations in skill, effort, time, responsibility and medical knowledge required 
under different circumstances. 
This inspection examines the issueof uniform coding and factors which influence coding 
choices. It analyzes statistics on the frequency of specific procedurecodesbilled to Medicare 
carriers. As a meansto verify and interpret the statistical findings, interviews were held with 
142 personsknowledgeable of physician billing  habits, predominantly at the HCFA regional 
offices and Medicare carriers. 
FINDINGS 
. 	 There are wide variations in coding of office and hospital visits under what is intended 
to be a uniform coding system. Problems described here relate to coding of established  patient office visits and subsequenthospital care (daily visits to hospitalized 
patients). 
The principal reasonis differences in interpretation of the serviceseachcode represents. 
Differences in interpretation may be attributable to the large number of office and 
hospital visit codes available under CPT and a lack of clear distinction among code level 
descriptions. 
Reimbursement is also a factor, although code selection is intended to be basedsolely 
on the servicesrendered. 
RECOMMENDATIONS 
The HCFA should: 
.  Consult with the American Medical Association (AMA)  to reduce the number of codes. 
.  Consolidate codesfor payment purposes. 
.  Designate codesfor routine office and hospital visits. 
.  Consult with the AMA  on terminology changesand modification of the CPT manual. 
.  Educate providers on proper coding. 
HCFA COMMENTS 
The HCFA recognizes the problems which exist with coding of physician servicesand agrees 
with all of the OIGs recommendationsfor correcting them. A HCFA representativerecently 
presentedthe OIGs findings and recommendations to the AMAs CPT-4 Editorial Panel at a 
meeting in Washington, D.C.  Other discussionsbetweenHCFA and the AMA  regarding 
coding problems have also taken place over the past severalmonths. The HCFA believes 
theseactions I... will  have a positive  effect on resolving  the concerns  and issues raised  in this 
audit.  .,. , 
TABLE OF CONTENTS 
EXECUTIVE  SUMMARY 
INTRODUCTION  ........................................................................................................1 

Background  ...............................................................................................  1 

Purpose  .....................................................................................................  2 

Methodology  ..............................................................................................  3 

FINDINGS 
There  are wide  variations  in code  usage .................................................  4 

Principal  reason  is differences  in interpretation  ...................................  4 

Reimbursement  is also  a factor  ...............................................................  7 

RECOMMENDATIONS 
APPENDICES 
A.  Data sources 

B.  Carrier  billing  frequencies 

C. 	 Request  for  HCFA guidance  on coding  routine  visits 
D.  HCFA advice  on coding  routine  visits  INTRODUCTION 

BACKGROUND 
Medicare is a federally funded program which provides health care to the elderly and disabled. 
It is administered by the Department of Health and Human Services,Health Care Financing 
Administration  (HCFA).  Servicescovered under Medicare are divided into two general areas. 
The frst,  known as Part A, includes hospital servicesand supplies. The second,Part B, in
cludes physicians servicesand durable medical equipment such as wheelchairs. This in
spection deals with Part B. 
Reimbursement through Private Carriers 
Paymentsfor servicesor supplies covered under Part B are made through private insurance 
companies (carriers) under contract with HCFA.  Each carrier hasresponsibility for process
ing  claims in a designatedgeographic area. The HCFA provides direction to the carriers on 
all payment matters. It is also responsible for assuring that carriers are adhering to program 
policies and proceduresgoverning payment. 
Procedure Codesfor  Billing  _ 
In the past, physicians and suppliers submitted bills to carriers using narrative descriptions or 
numeric codes to identify  the servicesthey hadrendered. Many different coding systemswere 
used. Little  similarity  existed among the many methods used to bill Medicare. 
In 1983 HCFA required all carriers to adopt the HCFA Common ProceduresCoding System 
(HCPCS). The useof HCPCS was intended to bring about uniformity  in defining and report
ing medical services. This uniformity  would enable HCFA to analyze Medicare services 
nationwide and would provide reliable information for Medicare policy making.  Such 
analyseswere not possible under the former hodgepodgeof billing  methods. 
Present Coding System  ., 
Under HCPCS, physician servicesare describedthrough useof the American Medical 
Associations Current  Procedural  Terminology  (CPT). The CPT consistsof a seriesof five-
digit codeseachrepresenting a particular service(procedure). When the procedureis a 
physician visit, the extent of the servicerenderedis also designatedby a procedure level. 
These levels take into consideration the wide variations in skill, effort, time, responsibility and 
medical knowledge required under different circumstances. 
The following  table shows the code and corresponding level designations for established 
patient office visits (any visit after the first) and subsequenthospital care (daily visits in a  hospital after the day of admission). Recentdata obtained from HCFA indicates that thesetwo 
servicestogether account for nearly 25 percentof the total number of servicesbilled, and 
16 percent of the total payments made under Part B. 
CPT CODE AND CORRESPONDING  LEVEL 
. 
OFFICE  LEVEL  HOSPITAL 
90030  Minimal  N/A 
90040  Brief  90240 
90050  Limited  90250 
90060  Intermediate  90260 
90070  Extended  90270 
90080  Comprehensive  90280 
Reimbursement Amounts 
Reimbursement ratesfor the various code levels are set by each carrier for its own area. Car
riers establish their rates basedon prevailing chargelocalities, specific geographic areas 
where physicians chargesfor servicesare very similar.  In most instances,the higher the level 
of service billed the higher the reimbursement. 
Uniformity  Lacking 
The HCFA Part B Medicare Annual Data System (BMAD)  provides calendar-yeardata by pro
cedurecode for every procedureprocessedby eachcarrier for the year. Under a uniform 
coding system,one would expect to find similar billing patternsfrom carrier to carrier. 
Analysis of the 1984 BMAD,  however, revealsthat patternsof billings for establishedpatient 
office visits and subsequenthospital care vary greatly. Not even a semblanceof the unifor
mity sought under HCPCS is evident in the BMAD  statistics. 
PURPOSE 
This inspection examines in detail the lack of uniformity  in coding of claims in thesetwo high 
volume areas: physician office visits by establishedpatients, and physician visits to hospital
ized patients. 
The inspection has three main objectives: 
2 
 (1) 	 to determine whether there are significant problems regarding coding of office and 
hospital visits; 
to identify  and examine reasonsfor coding problems; and 
(2) 
(3)  to recommend corrective measures,as appropriate. 
I 
METHODOLOGY 
Findings reported here are basedon analysis of data contained in the Part B Medicare Annual 
Data (BMAD)  ProceduresFile for 1984-1986. Other documents and statisticsrelated to 
physicians coding of medical services,listed in appendix A, provided documentation of the 
coding processand the conclusions of prior studies. 
To help interpret the statistical findings, 142 personsknowledgeable of physician billing 
habits were interviewed.  Theseindividuals were: 99 persons(including 9 physicians) from 
all 47 Medicare carriers; 15 from HCFAs central office and 24 from HCFAs 10 regional of
fices; 3 from other government offices; and 1 from the American Medical Association. 
3 
 FINDINGS 
THERE  ARE WIDE VARIATIONS  IN CODE  USAGE 
An analysis of the 1985 and 1986 (latest available) BMAD  statisticsreveals that 1984 varia
tions in bilfing patterns among carriers continue. The following  charts illustrate someof these 
variations. 
Figure A shows, for example, that for code 90060 one carrier had 86 percent of its total bill
ings for establishedpatient office visits at this level.  Another hadjust 9 percent. The 
averagepercentageof this code reported by all carriers was approximately 31 percent. 
Information on patternsof billings at all carriers is contained in appendix B of this report. 
Bills  to  Carriers  for 
A  Established  Patient  Office  Visits  (1986) 
F@U~ 
Forcont  of  Total  (Froquonc~) 
90030  Qoo40  WOW  QoO60  00070  90080 
HCPCS  Code 
- Low  Curlu  =  High  Curlor  - Awag. 
PRINCIPAL  REASON  IS DIFFERENCES  IN INTERPRETATION 
Both Group Health Insurance (GHI) and Empire Blue Shield pay claims for portions of New 
York City.  The city is consideredone prevailing charge locality for purposesof setting reim
bursementrates. However, while GHI has 85 percentof its billings for subsequenthospital 
care at the intermediate level (90260), billings at Empire are more evenly distributed, with 
only 34 percent at the intermediate level.  Similarly, Blue Shield of Montana and Equicore of 
Wyoming both servepredominantly rural populations. Blue Shield, however, has53 percent 
of its hospital visits billed at the brief  level (90240), while Equicore hasonly 10 percent at 
4  this level.  These and similar comparisons show that differences in billing  patternscannot be 
attributed to differences in the geographic location of Medicare patients. 
The nature of the coding problem was examined in interviews with HCFA and carrier staff. 
These interviews revealed that the principal reasonfor variations in billing  patterns among car
riers is the differences in interpretation of codes by both carriers and providers. (Providers of 
Medicare Part B servicesare physicians and suppliers of medical services.) When carriers 
first converted to HCPCS, HCFA permitted them considerableflexibility  in translating the 
codes under their old systemsinto the new CPT codes. This flexibility  led, for example, to 
some carriers converting an old 9004 (routine fJllow-up  office visit) to the CPT code 90040 
while others converted this code to CPT code 90050. 
Bills  to  Carriers  for 

Subsequent  Hospital  Care  (1986) 

Figure  B 
Percent  of  Total  (Freauencv) 
90260  90260  90270  90280 
HCPCS  Code 
m  Low  Carrier  m  High  Carrier  -A- Average 
No National  Policy on Coding Routine  Visits 
Variations in how carriers converted their old coding systemsinto the new are most evident in 
the differences in what CPT codesthey choseto designatethe routine level for office and 
hospital visits.  Routine is defined as the service a physician would normally be expectedto 
render most often. 
These differences for routine visits were noted severalyears ago by HCFAs Region VI office 
in Dallas.  Regional staff requestedclarification from the HCFA central office (appendix C). 
The HCFAs response(appendix D) statesthat the 90050 and 90250 (limited) levels of office 
and hospital visits are the most correct codesto designateroutine services. The responsefur
ther statesthat it is possible that some carriers, basedon reimbursement considerations,may 
have designatedboth the brief  and limited  levels asroutine.  While this is not the preferred  method, HCFA apparently considersit acceptable. According to HCFA staff, levels higher 
than the Limited level would not be correct. With the exception of Dallas, HCFA hasnot com
municated this position to any of its other nine regional offrces. 
As illustrated by the following  charts,carriers continue to consider a number of different 
codes,or combinations of codes,asroutine.  Only about half of the carriers indicated they 
would use the 90050 or 90250 code which HCFA considersto be most correct: 
Carrier  Respondent  Opinions 
Figure  C 
Routlne  Offko  Welt*  the=HoaplW  Vklt* 
%r  Z0 
Lack of uniformity  in the coding of routine servicescausesproviders to lose confidence in 
both the carriers and the Medicare program. The absenceof a national policy on the ap
propriate code to designatethe routine level also increasescarriers difficulties  in dealing with 
individual providers on coding problems. 
Too Many Co&s Are Available 
Many carrier staff statethat in their opinion physicians are often confused by the large number 
of CPT codesavailable to describeoffice and hospital visits (six and five respectively). Addi
tionally, many respondentsperceive a lack of meaningful distinction among the various CFT 
coding levels, particularly the brief  and limited  levels. This appearsto be a major factor 
in accounting for differences in interpretation of routine and other visit codes. 
Under most of the carriers previous coding systems,there were fewer codesthan under the 
presentCPT system. Some of theseformer systemshad codestermed routine for office and 
hospital visits.  Carrier respondentsindicate that many physicians preferred to usethesecodes 
almost exclusively rather than having to chosethe correct code from among several. Many 
believe that physicians still prefer this manner of billing. 
6 
 In consideration of thesepoints, respondentsrepresenting70 percent of the Medicare carriers 
feel that the number of codesfor office and hospital visits should be reduced. 
REIMBURSEMENT  IS ALSO  A FACTOR 
While differences in interpretation of codesby carriers and providers accountfor most of the 
variations in coding of office and hospital visits, other factors also contribute. 
Many carrier staff indicate that a number of physicians may seekto maximize reimbursement 
by billing  a higher level code than appropriate for the servicerendered. In numerouscases, 
this was substantiatedby carriers findings in postpayment review of physicians claims. 
Several carriers suggestedthat this problem may be accelerating as Congressimposes 
measures,such as fee freezes,to control spiraling Medicare outlays. 
Carriers also point out that the coding selection processwhich is usedin the physicians office 
frequently includes consideration of the amount the carrier will  reimburse for a billed service. 
Although code selection should be basedsolely on the type of servicerendered,those who 
prepare the bills often match the physicians normal charge for an office or hospital visit to the 
code which pays the sameamount, and bill accordingly. 
The attitude expressedby severalcarrier representatives,including one medical director, sup-
plied another example of the influence of reimbursement factors on coding. These persons 
noted that if physicians consistently bill just one code for establishedpatient office visits and 
one for subsequenthospital care, over time the reimbursement highs and lows will  balance 
out. 
One of the larger carriers explained that they urge physicians to usethe appropriate codes,but 
they routinely  acceptthe intermediate level code (90260) for  daily hospital visits throughout 
the hospital stay. Carrier representativesacknowledge that the patient should be improving 
the closer he comes to the day of discharge. Thus, he should not require the more extensive 
servicesrepresentedby code 90260 at the end of his stay. However, the carrier reasonsthat 
reimbursement is about the sameusing code 90260 for each day as it would be using the 
higher level codes at the beginning of the stay and the lower codestoward the end. 
Other Factors Coirtribute to the Problem 
Still other factors which could lead to variations in coding were mentioned by carrier person
nel: 
. 	 Physicians may be reluctant to use the current CPT codesdescribing brief  or limited 
visits out of concern that theseterms imply inferior service. 
. 	 Many specialists believe they should bill the higher level codesbecausethey are 
specialists, regardlessof the actual servicerendered. 
7 
 . 	 Some physicians, as well as somecarrier staff, believe that the more time spent with the 
patient the higher the code that should be used. (The CRT already takes into 
consideration the time each service should take.) 
. 	 In the CRT booklet the definitions of code levels are in a different section than the codes 
themselves. Associating the two is somewhatinconvenient. 
HCFA and the Congress Consider Solutions 
Several activities are currently underway to addressspecific coding problems and their under-
lying causes. 
In order to deal with providers who may be coding servicesinappropriately, HCFA has man-
dated that all carriers useprepayment screensfor certain procedurecodes. These screens 
detect instancesof physicians billing  for more than a specified number of a single procedure 
for one patient over a given period of time.  When thesecasesare identified by the screening 
process,carriers must review all claims for medical necessitybefore making payment. 
However, there are problems with this approach. The samescreensapply to all carriers equal
ly.  They assumea uniformity  in application and definition of codeswhich doesnot exist. As 
an example, if HCFA required carriers to examine all claims for servicecode 90260 when 
over six per month are submitted, somecarriers would have to examine most of theseclaims. 
This would be the casefor carriers which consider 90260 the appropriate code for a routine 
hospital visit. 
The Omnibus Budget Reconciliation Act of 1986 (OBRA) requires that the Secretaryof HHS, 
by no later than July 1, 1989,  ...group the procedurecodescontained in any HCFA Common 
ProcedureCoding System for payment purposesto minimize inappropriate increasesin the in-
tensity or volume of servicesprovided as a result of coding distinctions which do not reflect 
substantial differences in the servicesrendered. If this requirement is applied to subsequent 
hospital care and establishedpatient office visits much of the coding problem will  be 
resolved. The HCFA, which is acting for the Secretaryin this matter, has not yet decided 
whether theseserviceswill  be included in the code grouping OBRA requires. 
R  RECOMMENDATIONS 
Consult with AMA  to Reduce Number of Codes 
Findings:  Carriers  report that physicians are sometimesconfused by the number of codes 
available under CPT for of&e  and hospital visits.  Carrier staff also perceive a lack of mean
ingful distinction among the various coding levels. Respondentsrepresenting70 percent of all 
carriers believe fewer visit codesare necessary.Physicians may prefer to usejust one code 
rather than chosethe correct code from among several. Finally, some carriers acceptbill
ings from physicians who use only one code even when it is apparentthat different level ser
vices were rendered. They rationalize that, for reimbursement purposes,the highs and lows 
will  balance out. 
Recommendation:  The HCFA should consult with the AMA  to reduce the number of codes 
available under CPT for establishedpatient office visits and subsequenthospital care. 
Impact:  This would bring the coding system more in line with actual billing  practices. It 
would also reduce the incidence of inappropriate coding, and its accompanying effect on reim
bursement, by providing fewer choices and greaterdistinction betweencode levels. 
HCFA  Comments;  The HCFA agreeswith this recommendation and has beenworking on this 
problem for some time.  Discussions focused on reducing the number of codeshaverecently 
taken place between HCFA and the AMA. 
Consolidate Codesfor  Reimbursement Purposes 
Findings:  Bills are often preparedin physicians offices by matching the physicians charge 
with the carriers reimbursement schedule,rather than with the appropriate code for the ser
vice actually rendered. Carriers have noted instancesof physicians using a higher level code 
than appropriate in order to increasereimbursement. Some carriers may be accepting a higher 
level of coding than appropriate for routine services. The HCFA is required by OBRA to 
group (combine) procedure codesfor payment purposesin situations.where distinctions be-
tween levels are unclear. 
Recommendation:  Concurrent with seeking to reduce the number of codesavailable, HCFA 
should pursue consolidation of visit codesfor payment purposes. 
Impact:  This would reduce the impact that inappropriate coding hason Medicare outlays and 
fulfill  the intent of OBRA. 
HCFA  Comments:  The HCFA agreeswith this recommendation. A letter was recently sent 
from HCFA to the AMA  outlining potential coding consolidations. 
9 
 Define  routine  Level 
Findings:  There are large variations in usageof CPT codesfor establishedpatient office 
visits and subsequenthospital care. These variations are most evident where the routine 
level of service is being billed under a number of different codes. The HCFA hasdesignated 
the codesit believes most correct for routine servicesbut hasnot promulgated this informa
tion nationally. 
Recommendation:  The HCFA should inform all carriers and providers of the codesit con
siders most correct for routine office and hospital visits and then assureits instructions are 
applied consistently. 
Impact:  Consistency of interpretation from carrier to carrier will  improve the credibility  of 
the coding system. Consistency will  also strengthencarriers positions in dealing with coding 
problems with individual providers. Further, it will  allow HCFA to better usepayment data by 
visit codesfor trend analysis and policy making in such areasas fee schedules. 
HCFA  Comments:  The HCFA agreeswith this recommendation. A HCFA representative 
recently met with an AMA  Ad Hoc Committee on Visits and Levels of Service. The meeting 
focused on the need for uniform understandingsby Medicare carriers and the physician com
munity regarding what codesdescribe routine visits and consultations, as well as how codes 
should be used by physicians in the various specialty fields. 
Consult with AMA  on Other Changes 
Findings:  Carriers  report that some physicians may be reluctant to code their claims at the 
CPT levels termed minimal,  brief  and limited  due to the negative implications of these 
terms. Respondentsalso point out that the presentformat of the CPT book makesit incon
venient to associatethe description of the levdl of servicewith the corresponding code. 
Recommendation:  The HCFA should discusswith AMA changing the terminology usedto 
describe servicesso as to neutralize its effect on coding choice. Easier associationof code 
level with the codes, at least for higher volume areassuchasphysician visits, should also be 
discussedwith AMA. 
Impact:  Thesechangeswould eliminate two factors which appearto inappropriately bias the 
code-selectionprocess. 
HCFA  Comments:  The HCFA agreeswith the recommendation. At the recent meeting be-
tween a HCFA representativeand the AMA  Ad Hoc Committee on Visits and Levels of Ser
vice, the need to avoid terminology that hasnegative connotations in the narrative descriptions 
of certain codeswas discussed. 
rn  Educate Providers on Proper Coding 
Findings:  Carriers report that physician specialistsoften feel they should bill the higher level 
CPT codes simply becausethey are specialists. Some physicians believe the more time they 
spendwith a patient the higher the code level they should bill.  The current CFT system al
ready takes into consideration the time and level of skill neededto perform various levels of 
services.These should not be factored in again by the physician. 
Recommend&ion:  The HCFA, along with the carriers, should better inform physicians of 
HCFAs interpretation of proper use of CPT codes. 
Impact:  Better physician understanding of the CPT system will  help to reduce inappropriate 
coding of services. 
HCFA  Comments:  The HCFA agreeswith the recommendation. This concern was also dis
cussedat the recent meeting between a HCFA representativeand the AMA  Ad Hoc Committee 
on Visits and Levels of Service. 
11 
 -.  li  .  :  . 
APPENDIX A 
Data Sources 
Part B Medicare Annual Data (BMAD),  ProceduresFile, 1984,1985, and 1986 
Carrier Annual Management Reports asSubmitted to HCFA 
AMAs Physicians Current Procedural Terminology 
(4th edition), 1984-1988 
Physician Payment Review Commissions I988  Report. 
to Congress 
HCFA Common ProceduresCoding System, Conversion/Implementation Manual and User 
Guide 
Office of Technology Assessmentreport: Paymentfor  Physician  Services (1986) 
Various HCFA/Carrier policy memorandaand guidelines  APPENDIX B 
Carrier  Billing  Frequencies  for 
Office  and  Hospital  Visits 
(Computed from 1986 BMAD,  ProceduresFile) 
B 
 . 
.. 
16  . 
z 
12 
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g 
44  . 
oo780  eLLuI:sMIzLD-nmcmc~ 

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ooaas  8LUE  SUM-n 

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OCTY  .  r(JERTO  RICO--Qs 

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. 
.  APPENDIX C 
Request  for  HCFA Guidance  on 
Coding  Routine  visits 
C 
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-:*.. .-..  ., :.....;* .... ?. ... .:  . ..1 :.. .....  .--.*..- ; .:.*-.*t$ .. ---:-.  . ... .   ::  :.;. ..  .  . .  ?: . -C- .  :  . 
.  . -tip  NaAon,  &&-,  l *  .  .:  r  :  * ,  . 
.  .  hmof  Heal&  St&&-&d  Qua&    - :-..  - -.:-- - . . .  .  ...  . 
.  .a  .  p..,.;- i;  . . .-. ...  *..-.  ,  .-0. . : ..... I.- . :  . * -.;*.,lf  .-L . -;:y-,,,.  . ..  . ..- -.,.   :  . -.  -a. . .  .  _:.   ..   .  - :.  .  .  . .  .  -.j   . . .  . .  .  ...    :.:->...   .- . * ..  ..:  ...i*  .  .  .--...* -.* *.. : .-- e.i; -... -.*
. -&r-to  thi  hplem&aiiob  air *HCPC& we look&  bn codc;SOtiS (&r&e  follow- ..-:  : *:,:I; 
. 
offh  limit)  and  9024  butinc  hospital  visit)  as thi  codes  for  officc.and  hospital  vl&  -.  _  .y... 
. .  seMcu  we  wouid  normally  expect  a physician tu  provide  most of  the tima  If,  in  :  .  .,;,. :. 
. reviewing  a physi+n  *oughipostpayment  utilization  review,:  W;  found  a phyJidan -_  .  .  .-:_ 
;  - .  . who  was  biIhg  the  Medicare.  program  for  a  substantially  ku  cr  number  of  higkr  . 
ievd  service  (e.g.,  9005)  than  the  routine  mice  b.,  9CO4f ,  we  considered the  * :  -5 :. - 
phydciads  practkt  as  being  8  Potential  %pcodhqn  situation.  However,  with  the  .  . 
.  implementation  of  HCPCS, we &c  now  uncertain  u  to  what  the  routine  office  and  .. 
~hospital visit  codes are..  (For  example:  Would  the-routine  office  visit  code-now 
 	 (under HCE!CS  bi  90040, 90050, or  wouhi  it  depend  on  what  the  CRIB  to  HCPCS 
code.priciqg  conversion  was?  If  the  latter,  what  would  be considered- ihe  routhe  , 
cock  for-an  offke  visit  if  the  CRYS. 9004  charge  data  wasascd  to  price  both-the  .*  .  -. * 
.. 
-. 30040-ancf900~0  HCFCS co&s?)  - *.- -.- ..  i .,.  -..t::.  ::..- :  -.;z  - .J.-.  . :y:..:  : -.  o .  :., ./
.t  ..,e  ..  . .  ..  ..  - .  .  . . . .  _- - . .  ..-.. 
.  .s&- ;he  &&;m&~*&  &l*k&S,  auf  &ti~  a  &  w&fs  ir; &  r&i  b  *  .:.l  . . 
.  . 
been thqt  H&CS  codes 90040 and 90240  are to be considered the routine  office  visit  1- -. 
.  . 
.  and hospftaL+islt  codes,  respec%ivcIy,  for  up&ding  consideration.  We have taken this  ..:   --.  -
* 	 position  because .iF1s,o me cases allowingaphysidan  who wiFmsing:9004/?024  h  the::.  .  - * 
msuft
past as his routine  cdd&.tp  usi 9OOSOl9OZSnOow   under HCXS  witl  in a higher  - - -  : - -
. - Medic&e  allowan~~;E&insance;~  .wiii  ii&w  if. fhe  carrier  used  9004  to  price  :.-!z L =  . 
. 	 90040  and.  9005 6 prlci  90050..  However,.we  have  recentlye  s&en  44cdlcat~  2.  Fw . 
newtlctteti  that  Pto rudl enthi  and.  General  American  Life  have  sent  out  to  th&  4 
* * physician  cammt&tks  tit&h  indkatt  that  they  ate  considering  90050 and 902SG-as.  . -.  -.T.. 
the  routine  codes.  (Copies  of these ncwskttcrt  arc attxhcd  for your  reference.)  Wc.:  .  - ._.. 
arc  sure  that  .Prudcntiaf  and.Geneal  American  Life.  took  their  positions based onthe  . . . 
Cm-4  d&&ion  of  Timltcd  lcveiof  service?  which does seem to.support  the uic  of  me  :  *-.-
90050 and 9025Oxs rout&  service cadet,  .  ;  -.    :. .  . .  . 
. .  . .  .. w  . .  :.  .  .  .  m 
We would  a&eciatekeivinn,  your  comments iis to  which  HCPCS codes ;houid be 
considered the routfne  codes for  postpayment upcoding review!  ou~oses.  TVc plan to  . -
.  hold a utilization  review  work  group meeting  for  near future 
OUf  qZ?rkrS  lh  Lhc  and 
therefore  would appreciate  receiving  your responseby $ay  15, 1%?5J  . . 
. .
L  -
_-.  .- . 
u  wc CM p&idc  vou with  anv additional  information  on this  matter,  please contact 
John  Dela* ne: y..  ;-a. .t  .F @.   . .7. 2. 9-4441:- .  :  .  . .  .-. -....  ..  - .. ...  -. .  . 
.  .  . 
..  .:  hL J. Christenberry  . -
..
.  :  * Pronram Erector  *  . 
.  .  .  . . 
.  . . . .  -PO&~ a. nd. 
:. 
. 
.. 
.- - .w . ..  _- APPENDIX D 

HCFA Advice  on Coding  Routine  Visits 

D 
 . 
Hdrh  cafe 
. .
DEPARTkENT O&&IMLTH a HUMAN  SERVIC=.  laflcing~~
,-- . 
. 
.  ._ 
. 
*.:  .  ..  .  .  .  -.  .*  . . 
Your  request io  HSQB inquihing  should bc considcrcd tk  krtinc  .. : . 
. .  .  .. .
. ._- codes for  post  payment. upcoding  review  purposes has been rcfcrred  to  this ,office. 
-*.  . ..  .. 
. ;.  .. . . -. .. :  This  response. w  coodnatcd  with  the  Bureau  of  Eligibility,  Rumburscmyt  and  _  -
.-z.5 .  ;.*- . .  .  .(. 
:.. . *-.- . ..I. f* *.   .  .  Coverage (B.E  RC).  .  .  .    .  .  .  .  z  . .  1..   . . . ..   : 
:- . 
. Ai  you know,  the&  curr&itiy  is nit uniform  national  translation  table  for  cartiers  to  -.. 
: :-
. -*  follow  in converting  formerly  used visit  codes to  HCPCS  Also, as you +ve  pointed
:  - .. . 
i  ..__  -.  .  out,  the  definitions  of  the  Icvels  of  services in  the  American  Medical  Association%  _. : ._
. . -_-..:
-:.  . r;..   *,...  Current  Procedurai  Terminology  (CPT) could  lead  to  a concfusion  that  CPTIHCPCS  .. ..  ._
..  . codes  90050  and  90250  represent the routine  follow-up  visit  services, rather than codes 
. a-
90040 and 90240.  It  seems to us, therefore,  that  which  HCPCS visit  codes arc for  the  . 
a _.  -0  routine  scrViccs  dcpcnds primarily  on what  a carrier%  Charge data  convcrsh  was. 
-.  ,.  . 
., .  Conversely, whcthcr  it  used the appropriate  charge data in cstabkhing  the.rcasonablc
.:.  . . 
i -c . .  . : .;  ..  charge  seas  for  the  HCPCS  visit  codes dcpcnds on which  of  them  lt,  and the  .  .
phyrsiciaruinitstetvicearea,contidertobetheonesfortheroutine~~  -__  . 
flq.;_  - l  .- .. ....  .  .  ._  .  . . .  .  .  . . 
:. 
-.  :- :  ;... outlined.bcIo~,  arc some  of th~~al&na&&  carriers  may have followed  k  this rigard,  . . 

. :  ,:..  .:. .  .. ..and our ,oommcnts:  . . ... ..   ,*.  .  .  *-.  ;  . . .  .  :  ... .  .  1:::.  1. 

.-:...  :  .  . .  ;  -,..  . 

- .: 
.  ... . 
:*  .i  1.  If  a Qtti&  Age  data  &nvksion  k&  from  1964 CRVS  9Og4/9024 to
..-  .: ,- codes 
.  . - .   HCPCS codes 9OOa/90240, then the changes in the rcf+tive  frequency of seqviccs  . 
;a. . .  f.  reported  under the  iattcr  codes are as you have indicated,  the  appropriate  basis
.t..  ~~.fo&kntifjfing  possible %pCddi&  h  this  instance, it  akosccms  to  us 
SituatiOnS. 
.. ..  that  charge  data previously coilcotcd  under 1964 CRVS cod? 9003 (brief follow-up 
. 	 office  visit)  would be used to establish the  reasonable charge ccns  for  HCPCS  .. 
code 90030 (minimal  service).  : i.  :...  .  .  ,  -
. . 
2 	 If B car&r  has identified  HCPCS  90050/9OUO as the routine visit services, 
codes 
then  the  reasonable charges screens for  these codes should have been based on 
data  from  charges  previously  made  by  physicians  under  1964 CRVS  codes 
9004/9024.  As you have pointed  out,  there  would  otherwise  bc an unwarranted 
escalation  in  the  charges allowed  for  routine  visits.  Consistent  the above,  . 
with 
we think  in this alternative,  the charge data for  1964 CRVS code 9003 (brief 
&at 
follow-up  visit)  should be  used to  establish  the  reasonable  charge screens  for 
.  HCPCS  code  90040 (brief  scrvice)  and  possible  also  for  HCPCS code  90030 
.(mi-$m&  service).  In the latter  event, HCPCS code 90040 should be announcedto 
. 
.
I, 
. 
:  . 

.  .:-

. .. -,r  _  pfty&&ns  as being equivalent  to  !96(! CRVS code 9003, with  the  ~ectatiar  that 
.  . 

. .  : lower  charges will  be  made for  code  90030.  Alternatively,  the  lllsttuctl -0ns in 

.  .. .-.  .1.. 
Medicare  tarriers  Manual  section  5205  (Charges  for  Rare  or  Unusual  Procufures)

..  ...

.I * :  -I.&:.  .  should  be  followed  in  cstabiishing  a lower  reasonable charge sqecn  for  HCPCS  .  -

.  . code 90030.  Fur&r,  we would cxpcct  that  @uugc dat+.for  the  1964CRVScodc~ 

. 
.  :.,.  ..  9005, 9006, 9007, 9025, and 9027, etc,  would be used TV establish  the  reasonable. 

. .  -.:.
 .  barge  scrtpens for  the  HCPCS  codes for  more uctcn$c  follow-up  visits..  . .  , 
.: .) .i ,.; . ..  .  -
 .  ..   .  --  . . 
 . :  - M 
*:- .*  .  9 

. 
 .. .- :3;  If  a &iv  has used  charge  data  for  1964 CRVS codes  9004/9024  to price  semi&s  ;. 
l 

:  .:.  . 
 under: the  90040 and  90050/90240 and  90250 HCPCS codes it  has, in  cffcct,
.-*.. :  f.. ._.  . ,  ?  . 
.,- :. -. :_  idcnti&d  a set  of  two  HCPCS  office  visit  codes and a set of two HCPCShospital  *
.:y. .  -visit  codes, with  each set  d?cribiig  a single,  i.e.,  routine  service.  In suds a case 

. 
 *...  . 
- .,.,:.  the  frequency  of  scrviccs  under  these sets of  codes should be raed to  .  .: 

.. .  relative 
-.  .  .- ... . .. ,:..
. . .  li i.d cnq  .  possible %pcoding situ. ations.  f -. .  ;  . . ..   .._..   .  . .  ._.    :I*   --... :  _. .
;--

.-_ 
 . .  . 
 We prcfh  &at  the carriers  use the  second  altema~tivc  because  &r  medical QxlSultant  I--- . 

I  .  . .  . 
 *. 
thinks this  may be most corrc&  translation,  Also,.wc  cmphasizc that  it  is  . - --. 

important 
-	  for  eacfi carrier  to  make sure through iU  professiorkl  rciations  activitics/ncwsktcrs
 .  .I

. 
 that  physicians in its  service  arca tiw  what  coding and charge data conversionswcrc 
. .  . ..  1..  
 .  - . . 

.  made;  and  which  HCPCS  cod&  should be  used to  describe  whatwer6  miously  -
 .  . . 

.  -
 .  . 
- i...  called brief  and routine . etc.. ,
  visits.  ..  .  . .  . . 
.. 

.: 
Pkasc rcf&  any questions  to H&y  L. iavitt  at FTS 9872322.  -..-;   ..  :  -:
. 
t .;  ..	 .  .  ..  -_. 
... .  ... 
 -.-

.-  .  .  . .
  ....  .  .  .. 
 - :  .  Tho-mas- _T:. . McCloskcy   7  . -.
. . --..  
 .*
. 

-. .  - ,  : 

..  .  -cc  L  Terry,  DRP, HSQS - .- *_.  ..  :  .  .  . 
 : ,. 
 . 

. .  .:  Regional Office  Program Directors  .  . I. * ,.  I .  ;  -c.. 

. .  I  ..  - : .-.I. .... 

. 
 ~~PoiicyandOpcra~on~  a  - .  ..,I .:  .  .;.  .  - .  ,. *  .- l 
:.  .  . .  .:  - -
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. .:  .:  . _. .
 . . .  .. 

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