Department  of  Health and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
PHYSICIAN  USE  OF  NEW  VISIT  CODES  OFFICE OF INSPECTOR GENERAL 
The  mission  of the  Office of Inspector  General  (OIG),  as mandated  by Public  Law 95-452, as 
amended,  is to protect  the  integrity  of the  Department  of Health  and Human  Services (HHS) 
programs  as well as the  health  and welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission  is carried  out  through  a nationwide  network  of audits,  investigations,  and 
inspections  conducted  by three  OIG  operating  components:  the  Office of Audit  Services, the 
Office of Investigations,  and the  Office of Evaluation  and Inspections.  The  OIG  also informs 
the  Secretary  of HHS  of program  and management  problems  and recommends  courses  to 
correct  them. 
OFFICE OF AUDIT  SERVICES 
The  OIGS Office of Audit  Services  (OAS)  provides  all auditing  services  for HHS,  either  by 
conducting  audits with its own audit  resources  or by overseeing  audit  work done  by others. 
Audits  examine  the  performance  of HHS  programs  and/or  its grantees  and contractors  in 
carrying out  their  respective  responsibilities  and are intended  to provide  independent 
assessments  of HHS  programs  and operations  in order  to reduce  waste,  abuse,  and 
mismanagement  and to promote  economy  and efficiency throughout  the  Department. 
OFFICE OF INVESTIGATIONS 
The  OIGS Office  of Investigations  (01)  conducts  criminal,  civil, and administrative 
investigations  of allegations  of wrongdoing  in HHS  programs  or to HHS  beneficiaries  and of 
unjust  enrichment  by providers.  The  investigative  efforts  of 01  lead to criminal  convictions, 
administrative  sanctions,  or civil money  penalties.  The  01  also oversees  State  Medicaid  fraud 
control  units which investigate  and prosecute  fraud  and patient  abuse  in the  Medicaid  program. 
OFFICE OF EVALUATION  AND  INSPECTIONS 
The  OIGS Office of Evaluation  and Inspections  (OEI)  conducts  short-term  management  and 
program  evaluations  (called  inspections)  that  focus on issues of concern  to the  Department, 
the  Congress,  and the  public.  The  findings  and recommendations  contained  in these  inspection 
reports  generate  rapid,  accurate,  and up-to-date  information  on the  efficiency, vulnerability, 
and effectiveness  of departmental  programs. 
Oeis Atlanta  Regional  Office  prepared  this report  under  the  direction  of Jesse  J. Flowers, 
Regional  Inspector  General  and Christopher  Koehler,  Deputy  Regional  Inspector  General. 
Principal  OEI  staff included: 
REGION  HEADQUARTERS 
Joe  Townsel,  Project Leader  Tom  Noplock,  Program Analyst 
Betty  Apt,  Team Leader  Barbara  Tedesco,  Statistician 
Jackie  Andrews,  Program Analyst  Stuart  Wright,  Program AnaZyst 
Tammy Bonney,  R-ogram AnaZyst 
For  additional  copies  of this report,  call the Atlanta  Regional  OffIce at (404) 331-4108.  , 
Department  of  Health and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
PHYSICIAN  USE  OF  NEW  VISIT  CODES

fs SERVIC&$ 
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OEI-O4-92-O1O6O  EXECUTIVE  SUMMARY

PURPOSE 
To  determine  whether  or  not  physicians  uniformly  and  accurately  use  new  visit  codes 
adopted  by the  Health  Care  Financing  Administration  in  1992. 
BACKGROUND 
The  Health  Care  Financing  Administration  (HCFA)  bases  Medicare  payments  to 
physicians  partly  on  a system  of five-digit  codes.  Generally,  the  codes  represent  type  and 
complexity  of service  provided,  and  patient  status,  such  as new  or  established.  Medicare 
payments  are  generally  higher  for  more  complex  and  longer  visits. 
Effective  in  1992,  HCFA  adopted  new  visit  codes  developed  by the  American  Medical 
Association  (AMA).  The  AMA  revised  the  previous  coding  system  used  by Medicare, 
and  redefined  physician  services  those  codes  represent. 
The  revised  codes  were  designed  to  improve  coding  uniformity  and  accuracy.  Uniform 
coding  is achieved  when  codes  physicians  submit  to  Medicare  reflect  a consistent  pattern 
throughout  a universe  of physicians.  Accurate  coding  is achieved  when  physicians  select 
codes  which  consistently  fit the  services  physicians  actually  provided. 
METHODOLOGY 
We  drew  our  data  from  two sources. 
First,  we surveyed  eight  randomly  selected  Medicare  carriers  to determine  how they 
implemented  and  monitored  the  new codes.  As part  of that  effort,  we asked  appropriate 
personnel  from  each  carrier  to code  clinical vignettes  to measure  carrier  accuracy  and 
consistency  in selecting  correct  codes.  All eight  carriers  responded  to our  survey. 
Second,  we randomly  surveyed  328 physicians  concerning  their  experiences  with  the  new 
visit codes.  Despite  a number  of follow-up  attempts,  only 61 physicians  (18 percent) 
responded  to our  survey.  Of the  328 physicians  surveyed,  101 were  primary  care 
physicians.  We  asked  the  primary  care  physicians  to code  five clinical  vignettes  designed 
to measure  how accurately  and  consistently  physicians  chose  correct  codes.  Of the  101 
primary  care  physicians,  14 (13 percent)  completed  the  vignettes. 
Because  of low response  rates  to the  physician  survey, we cannot  draw  definitive 
conclusions  regarding  the  experience  of physicians  in using new visit codes  or their 
understanding  of new visit codes.  Nonetheless,  we believe  the  data  we did obtain  may 
provide  useful  insight  to HCFA.  Therefore,  we presented  it in this report. 
i 
 .    ~  HAVE  DIFFICULTY  SELECTING  NEW  CODES 
None  of the  five vignettes  were  coded  the  same  way by all sampled  carriers,  which 
illustrates  carrier  difficulty  understanding  the  new visit codes.  The  vignettes  were  coded 
with  a one  level  discrepancy,  or carriers  conceded  they were  unable  to decide  between 
two possible  codes.  Further,  most  carriers  said  (1) code  definitions  are  not  clear,  and  (2) 
they  believe  that  physicians  are  not  using the  codes  uniformly  and  accurately. 
PHYSICIANS  HAD  DIFFICULm  SELECIING  CODES 
The  14 physicians  who  coded  our  test  vignettes  also  demonstrated  difficulty  selecting  the 
codes  accurately.  Only  1 of the  14 physicians  coded  all  5 of the  vignettes  correctly  as 
defined  by the  AMA.  Many  of the  61 physicians  who responded  to our  survey  frequently 
delegate  code  selection  to their  office  staff. 
CARRIERS  HAVE  TAKEN  LIMITED  ACTION  TO  ENFORCE  COMPLIANCE 
WJTH  NEW  VISIT  CODES 
Carriers  we surveyed  said that,  since  the  new visit codes  were  implemented  in 1992, they 
have  taken  virtually  no action  against  physicians  for submitting  improperly  coded  claims. 
RECENT  HCFA  GUIDANCXl  MAY  IMPROVE  CODING  UNIFORMITY  AND 
ACCURKX 
Since  the  time  of our  survey, HCFA  and  the  AMA  have  collaborated  on, and 
disseminated  medical  record  documentation  guidelines.  HCFA  staff  expect  the 
guidelines  to result  in more  uniform  and  accurate  coding.  The  guidelines,  issued  in 
November  1994, are  designed  to clarifi  criteria  for visit codes. 
CONCLUSIONS 
Because  of limited  responses  by physicians,  the  information  presented  in this report 
should  be viewed  as prelimina~.  We  make  no recommendations.  However,  our  data 
does  raise  concerns  or questions  about  use of new visit codes,  Those  concerns  are  (1) 
the  accuracy  of codes  selected  by physicians,  (2) the  ability  of carriers  to correctly  advise 
physicians  on coding  matters,  and  (3) the  extent  to which  carriers  effectively  and 
appropriately  monitor  physician  use of the  codes.  These  concerns  will be  addressed  in 
future  reports  by the  OIG. 
11 
  TABLE  OF  CONTENTS

PAGE 
mom.m. .a ... .  ............  .............................. 
I
  Carrier  Difficul~With  The  Codes  . . . . . . . . . . . . . . . . . .

. . . . . . . .m.mm 4

  Physician  Difficul~With  The  Codes  . . . . . . . . . . . . . . . . . . . . . . . . . . . ..7

  Limited  Enforcement  By Carriers  . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . .  8

  Recent  HCFAGuidance  . . . . . . . . . . . . . . . . . .

. . . ..O  . . . ..O  . . . . . . .  8

mN~USIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...9

APPENDICES

&  Vignettes  Coded  By Carriers,  hd  Family  hd  General  Practitioners  . . . . . .  A-1

B:  Vignettes  Coded  By Internists  . . . . . . . . . . . . . . . . . .

. . . . . . .OO...  . . . . . .  B-1

..  INTRODUCTION

PURPOSE 
To  determine  whether  or not  physicians  uniformly  and  accurately  use new visit codes 
adopted  by the  Health  Care  Financing  Administration  in 1992. 
BACKGROUND 
The  Health  Care  Financing  Administration  (HCFA)  bases  Medicare  payments  to 
physicians  partly  on a system  of five-digit  codes.  Generally,  the  codes  represent  type  and 
complexity  of service  provided,  and  patient  status,  such as new or established.  Medicare 
payments  are  generally  higher  for more  complex  and  longer  visits.  For  example,  a 
Medicare  patient  visit involving  an in-depth  examination  for symptoms  indicative  of 
cancer  would  receive  a higher  payment  code  than  a less complex  visit for symptoms  of a 
common  cold. 
Medicare  Pre-1992  Visit  Codes  and  Related  Problems 
From  1983 through  1991, the  coding  system  used  by HCFA  did not  result  in uniform  and 
accurate  billing by physicians.  Over  that  time  period,  various  organizations,  including 
Medicare  carriers,  Office  of Inspector  General  (OIG),  and  HCFA  identified  coding 
problems  that  led  to inappropriate  Medicare  payments. 
For  example,  in 1989, an  OIG  inspection  report  (OAI-04-88-O0700)  showed  that  the 
coding  system  did not  evidence  even a semblance  of the  uniformity  sought  in physician 
billing.  Physician  use  of codes  for billing Medicare  varied  widely.  Based  partly  on the 
OIG  report,  the  American  Medical  Association  (AMA),  HCF~  and  other  agencies  have 
studied  the  coding  system  over  the  last several  years.  The  OIG  and  other  reviewers 
generally  described  the  coding  problems  as follows. 
Vague  code  descriptions  resulted  in differences  in physician  interpretation  of 
k	
services  each  code  represented. 
~	 Physicians  apparently  sought  to maximize  reimbursement  by billing  a higher  level 
code  than  appropriate  for services  rendered. 
HCFA  and  Medicare  carriers  did not  consistently  review  and  challenge  coding 
F	
practices  by physicians. 
1
 vii 
New  axk 
Effective  in 1992, HCFA  adopted  new visit codes  developed  by the  AMA.  That  is, AMA 
revised  the  previous  coding  system  Medicare  and  other  insurers  use.  The  AMA  also 
redefined  the  physician  services  those  codes  represent.  Like  the  previous  codes,  the  new 
codes  consist  of five digits. 
The  revised  codes  were  designed  to improve  coding  uniformity  and  accuracy.  Although 
coding  uniformity  and  accuracy  are  related  goals, the  terms  are  not  synonymous. 
Uniform  coding  is achieved  when  codes  physicians  submit  to Medicare  reflect  a 
consistent  pattern  throughout  a universe  of physicians.  For  example,  five new codes 
represent  the  five alternative  levels of complexity  which  gauge  services  physicians  provide 
during  office visits with  established  patients.  If, nationally,  physicians  select  the  third 
level  code  about  52 percent  of the  time,  but  physicians  in several  States  select  it only 
about  30 percent  of the  time  -- that  would  be  a lack  of uniformity. 
Coding  accuracy  is achieved  when  physicians  select  codes  which  fit the  services  actually 
provided.  Using  the  above  scenario  as an example,  any time  a particular  physician 
selects  a code  which  represents  an office visit of lesser  or greater  complexity  than  that 
which was actually  provided  -- that  is inaccurate  coding.  Generally,  to assess  coding 
accuracy,  a Medicare  carrier  must  review  a physicians  medical  records  supporting 
specific  services  that  were  billed. 
The  pre-1992  visit codes  included  virtually  no descriptive  information  which  physicians 
could  use  to accurately  select  a code.  Those  codes  represented  services  which were 
described  only as brief,  limited, or similar  subjective  wording.  Contrastingly,  the 
revised  definitions  established  much  more  specific,  but  elaborate,  criteria  for each  code. 
The  revised  definitions  included  up  to  seven  components  of a visit.  They  were  (1) 
medical  history,  (2)  examination,  (3)  medical  decision  making,  (4)  counseling, 
(5)  coordination  of  care,  (6)  nature  of the  presenting  problem,  and  (7)  an  estimated 
amount  of time  physicians  typically  spend  providing  a service.  The  codes  for  the  more 
complex  services  require  more  components  than  do  codes  for  less  complex  services. 
The  new coding  system  also reduces  the  number  of codes  available  for use.  This  change 
was designed  to reduce  opportunities  for erroneous  interpretation  of codes  when 
physicians  bill for services. 
METHODOLOGY 
We  conducted  structured  interviews  with HCFA  headquarters  staff to determine 
procedures  HCFA  used  to implement  the  new visit codes. 
We  surveyed  eight  randomly  selected  Medicare  carriers  to  determine  how they 
implemented  and  monitored  the  new codes.  We  mailed  each  carrier  a standardized 
questionnaire.  All eight  carriers  completed  our  questionnaire.  However,  we 
supplemented  the  written  responses  by visiting one  carrier  and  telephoning  the  remaining 
2  seven.  We  also asked  appropriate  personnel  from  each  carrier  to code  five clinical

vignettes  to measure  carrier  accuracy  and  uniformity  in selecting  codes.

We  surveyed  328 physicians  to determine  how they  used  the  new codes.  We  used

HCFAS automated  Unique  Physician  Identification  Numbers  file to randomly  sample  360

physicians  who were  served  by one  of the  eight  Medicare  carriers  we had  selected.

However,  we dropped  32 physicians  from  our  sample  because  of unknown  addresses,

deaths,  and  retirements.  We  mailed  standardized  questionnaires  to the  remaining  328

physicians.  A total  of 61 physicians  returned  completed  questionnaires,  for a response

rate  of 18 percent.  Physician  participation  in our  survey was voluntary.

Our  sample  of 328 physicians  included  101 primary  care  physicians.  Primary  care

physicians  are  those  in family and  general  practice  and  those  in internal  medicine.  To

determine  if physicians  uniformly  and  accurately  use the  new codes,  we asked  the

primary  care  physicians  to code  five clinical vignettes  as they would  code  an actual  office

visit.  We  did not  send  test  vignettes  to sampled  physicians  in other  specialties  because

the  number  of sampled  physicians  in any one  specialty  was very small.

The  101 primary  care  physicians  to whom  we sent  vignettes  included  56 family  and

general  practitioners  and  45 internists.  We  sent  one  set of five vignettes  to family and

general  practitioners,  and  a different  set of five to internists.  The  set we sent  to family

and  general  practitioners  was the  same  as the  set we sent  to carriers.  Fourteen

physicians  coded  and  returned  the vignettes  -- a completion  rate  of 13 percent.

Appendix  A shows the  vignettes  we sent  to family and  general  practitioners  and  carriers.

Appendix  B shows the  vignettes  we sent  to internists.

The  vignettes  we used  were  furnished  to us by the  AMA.  The  AMA  also provided  the 
appropriate  visit code  for each  vignette.  We  used  AMAs coding  as a standard  for 
determining  if physicians  coded  the  vignettes  accurately. 
Because  of the  low response  rates  to the  physicians  survey, we cannot  draw  definitive 
conclusions  regarding  the  experience  of physicians  in using new visit codes.  Nonetheless, 
we believe  the  data  we obtained  will provide  useful  insights  to HCFA  and  are  therefore 
presented  in this report. 
We  conducted  this inspection  in accordance  with the  Quali&  Standards  for  Inspections 
issued  by the  Presidents  Council  on Integrity  and  Efficiency. 
3
 FINDINGS

CARRIERS  HAVE  DIFFICULTY  SELECIING  NEW  CODES 
Lack  of Cothg  Uniformity among Cam% 
To  assess  coding  uniformity,  we analyzed  responses  to five test  vignettes  coded  by the 
eight  sampled  carriers. 
The  vignettes  we sent  to carriers  described  office visits provided  by a physician  to an 
established  patient.  Five new visit codes  represent  various  levels  of complexity  for office 
visits with such patients.  The  codes  are  99211, 99212, 99213, 99214, and  99215. 
Notably,  none  of the  five vignettes  were  coded  the  same  way by all sampled  carriers. 
The  vignettes  were  coded  with  a one  level  discrepancy,  or carriers  conceded  they were 
unable  to decide  between  two possible  codes.  The  following  pattern  was typical. 
In coding  one  of the  vignettes,  three  carriers  selected  code  99214, while  three 
b	
carriers  selected  99215.  The  other  two carriers  were  unable  to decide  between 
those  two codes.  The  correct  code,  according  to the  AMA,  was 99215. 
For  another  vignette,  four  carriers  selected  code  99214, and  three  carriers  selected 
F	
99215.  The  remaining  carrier  was unable  to decide  between  99214 and  99215. 
The  correct  code  was 99214, according  to AMA. 
For  another  vignette,  three  carriers  selected  code  99213.  Four  carriers  selected 
b	
99214.  The  remaining  carrier  was unable  to decide  between  99213 and  99214. 
The  correct  code  was 99214, according  to AMA. 
The  lack  of uniform  coding  was similar  to HCFA  findings  in 1992.  To  assess  uniformity, 
HCFA  staff in a regional  office had  4 Medicare  carriers  code  14 actual  physician  visits. 
The  carriers  coded  the  visits based  on medical  records  supplied  by physicians  who had 
submitted  Medicare  claims.  The  visits were  for hospital  and  other  types  of medical  care. 
None  of the  14 visits, however,  were  coded  the  same  way by all 4 carriers.  HCFA  found 
that  the  4 carriers  selected  between  2 and  4 different  codes  for each  of the  14 visits. 
Ten  visits were  coded  two different  ways. 
b 
Three  visits were  coded  three  different  ways. 
b 
One  visit was coded  four  different  ways. 
b 
4
 Luck of Clear Code De@tions 
Six of the  eight  carriers  we surveyed  said the  new visit codes  are  not  clear.  Most  of those 
carriers  said lack  of clear  definitions  was the  root  cause  of most  coding  problems. 
For  example,  one  carrier  specified  that  a clearer  definition  was needed  to differentiate 
two levels  of medical  history  and  examination  -- problem  focused  history  and 
examination,  as opposed  to extended  problem  focused  history  and  examination.  Those 
terms  are  part  of the  definitions  for office visit codes  99212 and  99213, respectively. 
The  terms  are  supposed  to help  physicians  differentiate  the  levels  of complexity  those 
two codes  represent.  Specifically,  the  levels of history  and  examination  are  two criteria 
for selecting  code  99212 or 99213. 
Further  describing  the  lack of clarity  in the  code  definitions,  another  carrier  stated  that 
clarification  was needed  regarding  how to properly  evaluate  medical  decision  making. 
The  carrier  also stated  that  clarification  was needed  on how to determine  the  degree  of 
documentation  needed  to support  each  code  level.  For  example,  what  documentation  is 
needed  on initial  examinations  as opposed  to subsequent  examinations.  Some  carriers 
also said they  need  examples  of proper  support  documentation.  (Subsequent  to our 
survey, HCFA  issued  medical  documentation  guidelines  to carriers.) 
Citing  another  aspect  of the  new codes  for which  they believe  clarification  is needed, 
several  carriers  said that  they  and  physicians  need  more  published  vignettes  giving 
examples  of proper  coding.  They  especially  cited  a need  for vignettes  on services  to 
elderly  persons  with multiple  ailments. 
Carriers Repti  tick  of  Coding  Un~ormity and Accuracy  among Physkians 
We  also asked  carriers  for their  views about  coding  uniformity  and  accuracy.  As Tables 
1 and  2 indicate,  only carriers  #  2 and  #  4 in our  sample  believe  that  physicians  are 
using the  codes  uniformly  and  accurately.  The  eight  sampled  carriers  based  their 
opinions  that  physicians  used  the  new codes  inaccurately  or accurately  on reviews  of 
physician  coding  practices  and  medical  records  of patients.  All of the  carriers  reported 
reviewing  samples  of Medicare  claims  and  supporting  documentation,  as required  by 
HCFA.  However,  in light of their  own difficulties  with choosing  correct  codes,  carrier 
opinions  should  be viewed  with some  caution. 
5
 TABLE  1

CARRIER  OPINIONS ON UNIFORMITY  OF CODING BY PHYSICIANS 
CARRIER  UNIFORM  NONUNIFORM  DOIWIKNOW 
Carrier #  1 x

Carrier #  2 x

x

Carrier #  3
Carrier #  4 x

Carrier  #  5 x

Carrier  #  6 x

Carrier  #  7 x

Carrier  #
 8
m  3 : 1

TABLE  2

CARRIER  OPINIONS  ON ACCURACY OF CODING BY PHYSICIANS

CARRIER  ACCURATE  INACCURATE  DONT KNOW 
Carrier #
 1 x 
Carrier #
 2 x 
Carrier #
 3 x 
Carrier  #
 4 x 
Carrier #
 5 x 
Carrier #
 6 x 
Carrier  #
 7 x 
Carrier  #
 8
m
 3 :  2 
6
 PHYSICMS  HAD  DIFFI~~  SELE~G  CODES 
The  14 physicians  who coded  the  test vignettes  included  in our  survey also had  difficulty 
selecting  proper  codes  (see  Table  3).  The  14 physicians  each  coded  5 test  vignettes. 
Only one  physician  had  a perfect  score,  with five of five coded  correctly  as defined  by the 
AMA. 
TABLE3 
PHYSICm  CODING  OF  TEST  CLNCfi  VIG~m 
#  OF  PHYSICIANS 
5 of 5 correct 
1 
4 of 5 correct 
2 
3 of 5 correct 
6 
2 of 5 correct 
3 
1 of 5 correct 
1 
0 of 5 correct 
Physician  total  % 
P
 II  14 
II 
tick  ofPhysicianInvolvement  in selectin~  ~d~. 
---0  -. 
Our  survey of physicians  showed  that  most  do not  personally  select  codes  for Medicare 
claims.  Table  4 shows that  only about  48 percent  (29 of 61) of the  physicians  who 
responded  to our  survey said  they selected  the  codes  for billing Medicare  100 percent  of 
the  time.  About  16 percent  of the  physicians  said they  never  select  the  codes.  Thus, 
they  always delegate  code  selection  to their  staff. 
TABLE  4 
PHYSIC~  INVOLVE~~  IN CODING  MEDIC- CLAIMS 
FREQUENCY  OF  CODE 
#  OF PHYSICIANS 
% OF  PHYSICIANS 
SELE~ON 
100 % of the  time 
29 
48 % 
75-99  % of the  time 
13	
21 % 
1-74  % of the  time 
15 % 
0 % of the  time 
16 % 
Total 
100%
&  ~ 
7

.  CARRIERS  HAVE  TAKEN  LIMK13D  ACTION  TO  ENFORCE  COMPLIANCE 
WITH  NEW  VISIT  CODES 
Carriers  report  that,  since  the  new visit codes  were  implemented  in 1992, they  have  taken 
virtually  no  action  against  physicians  for submitting  improperly  coded  claims. 
During  the  first  few  months  of  1992,  HCFA  instructed  carriers  to  review  claims,  detect 
coding  errors,  and  educate  physicians  accordingly.  During  1992,  at  least  four  of the  eight 
carriers  we  surveyed  found  error  rates  in  excess  of 25 percent.  Such  error  rates  might  be 
expected  the  first  few  months  after  the  new  codes  were  implemented.  Accordingly, 
HCFA  took  the  approach  of educating,  rather  than  penalizing,  physicians  who  used  the 
wrong  codes.  However,  since  early  1992,  physicians  have  had  ample  time  to  learn  the 
new  codes.  Yet,  carrier  oversight  and  corrective  actions  have  been  minimal  to  date. 
HCFA  told  us that  carriers  and  physicians  were  disadvantaged  without  guidelines  on visit 
code  criteria  and  related  medical  documentation.  However,  HCFAS position  is that 
earners  could  take  corrective  action  if physicians  egregiously  miscode  claims. 
Notwithstanding  HCFAS position  on corrective  action,  the  carriers  we surveyed  clearly 
indicated  an understanding  to the  contrary.  For  example,  carriers  said  they  believed  that 
HCFA  had  instructed  them  not  to correct  codes  erroneously  billed  by physicians,  and  not 
to take  corrective  action.  Further,  one  carrier  expressed  an opinion  that  HCFA  had 
even  discouraged  monitoring  of the  new visit codes.  Information  from  another  earner 
illustrates  carriers  understanding  of HCFAS instructions  regarding  corrective  actions. 
That  carrier  told  us in May  1994 that  some  physicians  were  miscoding  their  claims  and 
cited  as an  example  a physician  who billed  all visits at the  highest  reimbursement  level. 
The  carrier  did not  complete  an audit  of the  physicians  claims  until  February  1995.  The 
audit  showed  that  all of 60 claims  reviewed  should  have  been  denied  or downcoded.  In 
spite  of such  an egregious  finding,  however  the  carrier  still felt  the  need  to seek  further 
guidance  from  HCFA  HCFA  responded  by acknowledging  that  carriers  have  been 
restricted  in enforcing  compliance  with  the  new codes.  However,  HCFA  restated  its 
position  that  carriers,  at their  discretion,  could  take  corrective  action  in egregious  cases. 
RECENT  HCFA  GUIDANCE  MAY  IMPROVE  CODING  UNIFORMITY  AND 
ACCURACY 
Subsequent  to  our  surveys, HCFA  issued  guidelines  to carriers  on visit code  criteria  and 
supporting  medical  documentation.  The  guidelines,  effective  in November  1994, 
elaborate  on visit code  components  such as medical  history,  examination,  and  medical 
decision  making.  HCFA  reports  that  carriers  are  now engaged  in an effort  to  educate 
physicians  about  the  new  guidelines.  HCFA  staff expect  the  guidelines  to result  in more 
uniform  and  accurate  coding  and  more  consistent  medical  review.  Further,  HCFA  has 
provided  carriers  with  computer  software  which  can help  them  identify  aberrant  physician 
billing patterns.  Potentially,  carriers  can use the  software  to lay a foundation  for 
corrective  actions  against  physicians  who miscode  Medicare  claims.  Beginning  in August 
1995, HCFA  expects  carriers  to step  up enforcement  of the  new visit codes. 
8
 CONCLUSIONS

Because  of the  limited  physician  response  to our  survey, we are  not  making 
recommendations.  In light of the  low response  rates,  the  information  we developed
. . 
should  be viewed  as preliminary  in nature.  However,  the  data  we collected  in the  course 
of our  study raise  certain  questions.  Among  those  questions  are: 
How  accurate  are  codes  selected  by physicians  and/or  their  staffs when  submitting 
claims  to the  Medicare  program? 
In light of their  own difficulty  in selecting  codes  accurately,  to what  extent  do 
carrier  personnel  have  the  ability to pro;ide  good  advice _tophysicians  and  their 
staffs on coding  matters? 
To what  extent  are  carrier  personnel  effectively  and  appropriately  monitoring 
physicians  use of codes? 
Future  OIG  work  is planned  in all three  of these  areas  to assess whether  HCFAS new 
guidelines  have  the  i;tended  effect,  and  if so, how.  HCFA  expects  its new guidelines  to 
improve  physician  coding  accuracy,  carrier  accuracy  in giving advice,  and  carrier 
monitoring. 
9
 APPENDIX  A 
VIGNETTES  CODED  BY  CARRIERS,  AND  FAMILY  AND  GENERAL 
PRAmoNERs 
A-1  A.	 A sixty-six year  old white  male  presents  to the  family physicians  office  for a 
routine  four  month  follow-up  of his long standing  hypertension  and  stable 
coronary  artery  disease.  His past  medical  history  is otherwise  benign,  and  these 
chronic  problems  have  remained  stable  for one  to two years  on  single long acting 
calcium  channel  blocker.  The  patient,  however,  related  the  onset  of new 
symptoms  over  the  past  four  to six months  including  significant  nocturia,  hesitancy, 
and  postvoid  dribbling.  A detailed  examination  is conducted  including  cardiac, 
pulmonary,  and  funduscopic  examinations.  All are  within  normal  limits  and 
unchanged.  His abdominal  exam,  however,  suggests  a distended  bladder  and  his 
rectal  examination  reveals  a significantly  enlarged  prostate  which  is smooth, 
symmetric,  and  not  suggestive  of carcinoma.  The  patient  is continuing  on his 
usual  medications  but  is counseled  regarding  a presumptive  diagnosis  of benign 
prostatic  hypertrophy.  A routine  urinalysis  is obtained  along  with  an electrolyte 
panel,  including  renal  function  studies.  The  patient  was scheduled  for a urological 
consultation  regarding  the  need  for a transurethral  resection  of the  prostate.  He 
is scheduled  for routine  follow-up  in one  month  following  the  urology  evaluation. 
Duration  of the  visit is 12-25 minutes. 
Code:  99214 
B.	 A sixty-eight  year  old white  female  presents  to the  family physicians  office with  a 
known  history  of moderate  hypertension  and  Type  11 diabetes  mellitus.  She has 
missed  her  two previous  scheduled  appointments.  The  patient  is known  to be 
relatively  noncompliant  with her  medical  regimen.  She is complaining  of excessive 
fatigue  over  the  past  two months  and  increased  frequency  of urination 
accompanied  with  polydipsia  and  polyphagia.  Her  chronic  medications  are 
supposed  to include  a calcium  channel  blocker  and  an oral  hypoglycemia  agent. 
She  does  have  the  facilities  at home  to monitor  her  blood  pressure  at home  as 
well as a home  glucose  monitor.  A detailed  history  and  physical  are  completed 
during  this visit and  it is obvious  that  she has  again  been  noncompliant  with her 
medical  regimen  and  noncompliant  with her  diet.  A review  of her  blood  pressure 
readings  from  home,  as well as her  blood  glucose  readings  have  revealed  poor 
control  both  of her  hypertension  and  her  diabetes  mellitus.  Appropriate 
arrangement  are  made  through  a home  health  agency  to provide  dietary 
counseling  and  to provide  nursing  visits to assist in the  assurance  of medication 
compliance  as well as for blood  pressure  and  diabetic  monitoring  at  home.  A 
return  appointment  is made  for one week  to assure  improvement  in her  clinical 
status.  Duration  of the visit was 20-25 minutes. 
Code:  99214 
A-2
 c.	 A seventy-seven  year  old black  man  presents  to the  family physician  with  a three 
month  history  of episodic  substernal  chest  tightness  with exertion.  The  patient  is 
an established  patient  having  been  seen  previously  for routine  physical  exams  and 
for other  acute  episodic  illnesses.  A complete  history  reveals  the  patient  to be  a 
long term  abuser  of tobacco,  and  he also has  a very strong  family history  of 
coronary  artery  disease  and  hypertension.  He  states  that  his episodes  of chest 
discomfort  have  been  more  progressive  over  the  previous  three  months  and  now 
include  radiation  into  his left  shoulder  and  neck  after  limited  exertion  activity. 
The  discomfort  will usually  subside  within  two or three  minutes  after  exertion.  A 
complete  physical  examination  is undertaken  which  is unremarkable.  Laboratory 
data  reveals  a normal  chest  x-ray and  normal  resting  electrocardiogram.  A 
presumptive  diagnosis  of coronary  artery  disease  is made  and  the  patient  is 
prescribed  a calcium  channel  blocker  with  the  prn  use  of sublingual  nitroglycerin. 
He  is advised  to  discontinue  his smoking  and  to limit  his activities  such  that  it is 
not  to include  heavy  exertion  or lifting.  Specific  counseling  was also  undertaken 
with the  patient  for  coronary  artery  disease,  risk factor  modification.  An 
appointment  is made  with a local  cardiologist  to schedule  a submaximal  exercise 
treadmill  test  and  a follow-up  appointment  is scheduled  in two weeks.  Duration 
of time  is 20-35 minutes. 
Code:  99214 
D.	 A fifty year  old white  female  presented  to her  family physician  because  of the 
onset  of erythema,  edema,  and  pain  in the  area  of the  plantar  surface  of the  right 
third  metatarsal.  This  is an established  patient  known  for her  insulin  dependent 
diabetes  who is taking  a split dose  of Humulin  N each  day.  The  patient  also has 
hypertension,  which  is well controlled  on Procardia  XL 30 mg daily.  The  patient 
does  have  the  capacity  to monitor  her  glucoses  at home.  The  patient  denies  any 
fever  but  has begun  to note  red streaks  radiating  up the  medial  aspect  of her 
foot.  A complete  physical  examination  is performed  and  was benign  except  for an 
area  of deep  cellulitis  on the  plantar  surface  of the  right  foot  near  the  distal  third 
metatarsal.  There  was evidence  of ascending  lymphangitis.  The  patients  random 
glucose  taken  in the  office was 250.  The  patient  and  her  family were  counseled  at 
length  regarding  the  acute  diagnosis  and  the  ability  to provide  appropriate  care  at 
home  as an outpatient.  Coordination  of patients  care  was then  initiated  through 
a home  health  agency  to provide  intravenous  home  antibiotic  therapy  and  to assist 
the  patient  in monitoring  her  blood  glucose  control.  Arrangements  were  also 
made  for  daily outpatient  whirlpool  treatments  for appropriate  debridement  and 
cleansing  of the  right  foot  if an ulcer  were  to develop.  A follow-up  appointment 
in two days was assigned  to the  patient.  Duration  of the  visit, including  face-to-
face  time  with the  patient  and  her  family, was 30 to 50 minutes. 
Code:  99215 
A-3
 E.	 A seventy  year  old female  is brought  to the  family physician  by her  daughter 
because  of the  onset  over  a two-month  period  ofconfusion,  agitation,  and  short 
term  memory  loss.  The  patient  iswellknown  tothephysician  because  of the  long 
standing  history  of hypertension  and  diet  controlled  diabetes  mellitus.  Her  only 
medication  is a thiazide  diuretic.  The  patient  is ambulatory  but  is clearly 
disoriented  and  becomes  easily agitated.  History  obtained  from  the  daughter 
suggests  a possible  history  of a fall at home  three  to four  months  prior  to this visit 
and  no other  trauma  can be  ascertained.  A history  and  physical  examination  are 
conducted.  This  includes  an extensive  necrologic  examination  which  reveals 
significant  changes  in the  patients  mental  status  examination  but  no focal 
necrologic  findings.  Bilateral  carotid  bruits  are  detected  but  there  is no cardiac 
murmur.  Multiple  diagnoses  are  considered  including  multi  infarct  dementia, 
subdural  hematoma,  Alzheimers  dementia,  etc.  Diagnostic  testings  is initiated, 
including  a head  scan  and  appropriate  biochemical  studies.  A consultation  is 
scheduled  for  a necrologic  second  opinion  and  a follow-up  appointment  is 
scheduled  in two to three  weeks.  Her  daughter  is counseled  concerning  her 
mothers  potential  differential  diagnosis  and  suggestion  are  made  concerning 
increasing  her  support  and  stimulation  at home  through  semices  offered  by a local 
home  health  agency.  A referral  is made  to this agency  to assist the  daughter  with 
care  of the  patient  at home.  Duration  of the  visit spent  with  the  patient  and  her 
family is 30-50 minutes. 
Code:  99215 
A-4
 VIGNEl!lE  CODED  BY  INTERNISTS 
B-1  A.	 This is a 79 year  old man  who has had  multiple  basal  cell carcinomas  of the  head 
and  neck  removed  in the  past.  He  is seen  today  in a cancer  surveillance  follow-up 
program.  He  has no complaints. 
You  examine  his skin and  note  no new lesions  or recurrence  of lesions  from 
previous  excision  sites.  You  again  educate  him regarding  sun exposure  and 
schedule  a follow-up  appointment. 
You  spend  15 minutes  face-to-face  with the  patient  and/or  family. 
Code:  99213 
B.	 This  is a 62 year  old white  female,  established  patient  who is followed  by you for 
primarily  systolic hypertension.  She presents  in your  office  for a scheduled  follow-
up visit.  She is on Dyazide.  She has no complaints  except  for  some  urinary 
frequency.  You  obtain  an interval  history  relating  to her  hypertension  and  GU 
symptomatology. 
You  check  her  blood  pressure  which is well controlled  and  order  a potassium  and 
a urinalysis. 
You  advise  her  to call tomorrow  for the  results. 
You  spend  15 minutes  face-to-face  with the  patient  and/or  family. 
Code:  99213 
c.	
A 55year  old obese  white  male  established  patient  comes  to your  office  for 
routine  follow-up  six months  following  an anterior  myocardial  infarction.  His 
medications  include  Procardia  XL 30 mg. p.o.  q.d., and  Tenormin  25 mg. for 
hypertension.  You  obtain  an interval  history  which  is unremarkable. 
On  examination,  you note  that  his weight  is down from  285 to 265 pounds.  His 
height  is 61 and  his blood  pressure  is 105/65.  He  appears  obese.  His lungs  are 
clear.  You  note  an atrial  diastolic  gallop. 
You  counsel  him with regard  to cholesterol  management  and  advise  him to 
continue  his weight  reduction  and  activity level.  You  make  a note  to  consider 
dropping  the  Tenormin  if his blood  pressure  remains  stable.  You  schedule  a 
return  visit in one  month. 
You  spend  15 minutes  face-to-face  with the  patient  and/or  family. 
Code:  99213 
B-2
 D.	 A  68year  old  white  female  established  patient  presents  to  your  office  with  a 
known  histo~  of moderate  hypertension  and  Type  II diabetes  mellitus.  She  has 
missed  her  two  previous  scheduled  appointments.  She  is known  to  be  relatively 
noncompliant  with  her  medical  regimen.  She  complains  of  excessive  fatigue  over 
the  past  two  months  and  increased  frequency  of urination  accompanied  with 
polydipsia  and  polyphagia.  Her  chronic  medications  are  supposed  to  include  a 
calcium  channel  blocker  and  an  oral  hypoglycemic  agent.  She  has  the  equipment 
at  home  to  monitor  her  blood  pressure  and  her  blood  glucose.  You  perform  a 
detailed  history  and  determine  that  she  has  again  been  noncompliant  with  her 
medical  regimen  and  her  diet.  You  review  her  blood  pressure  readings  from 
home,  as well  as her  blood  glucose  readings  and  note  poor  control  of her 
hypertension  and  her  diabetes. 
You  perform  a detailed  physical. 
You  adjust  her  hypertensive  medication  and  arrange  dietary  counseling  and 
nursing  visits through  a home  health  agency  to assist in the  assurance  of 
medication  compliance.  You  make  a return  appointment  for one  week  to assure 
improvement  in her  clinical  status. 
You  spend  35 minutes  face-to-face  with the  patient  and/or  family, 
Code:  99214 
E.	 An unemployed  60 year  old man,  a chronic  heavy  drinker  of ethanol  and  smoker 
of cigarettes  (two packs  per  day for 40 years),  is brought  to your  office by his 
daughter.  He  has  had  gradual  progressive  shortness  of breath  for  2 years  and  a 
long-term  daily cough,  usually  productive  of clear  phlegm.  However,  5 days ago, 
after  binge  drinking,  he notices  that  the  phlegm  was no longer  clear  but  purulent 
and  occasionally  streaked  with blood.  The  patient  was told  that  he  had  a positive 
tuberculin  skin test  many  years  ago, but  he never  received  antituberculosis 
medication. 
Your  physical  examination  reveals  the  patient  to be  alert  but  weak,  disheveled, 
and  ill-appearing.  His mouth  and  gums  are  in poor  condition.  There  is no 
adenopathy.  Examination  of the  chest  reveals  scattered  wheezes  and  a prolonged 
expiatory  phase.  There  is clubbing  of his fingers,  but  the  rest  of his physical 
examination  shows no abnormalities. 
You  order  laboratory  studies  and  send  the  patient  to the  second  floor  of your 
professional  building  for a chest  x-ray.  Within  20 minutes  the  radiologist  reports 
that  the  roentgenograph  of the  chest  shows an irregular,  thick  walled  cavitary 
lesion  in the  right  lung. 
The  patient  and  his daughter  come  into your  office where  you tell  them  of the 
findings  on the  x-ray and  suggest  hospitalization.  The  patient  becomes  agitated, 
B-3