CPT® Medical Coding Done Right: Inside The Numbers.

If you want to make a living in today's E/M environment, you must master CPT® medical coding to maximize your revenue in the  undervalued relative value unit defined system.  Medicare recently eliminated consult codes for both in-patient and outpatient E&M medicine.  What this means is that all physicians performing consultative services in the hospital (at least for Medicare patients) will now bill the hospital admission codes CPT® 99221-99223 instead of the consult codes CPT® 99251-99255.  Make sure to get a copy of the AMA's CPT 2018 Standard Edition as the definitive resource on CPT® codes.  This resource is available below and to the right from the link to Amazon.

If the patient is not a Medicare patient, physicians can still submit consult codes to non-Medicare  insurance company as many may still be paying them.  Just imagine how complicated that gets as a physician when trying to decide which code to submit for  which patient based on which insurance they have.  We continue to submit our  consult codes as if none of our patients have Medicare and let our billing company figure it out.

But none of this madness compares to the blatant self sacrifice and destruction I heard a physician consultant tell me the other day.  I'm going to say it again.  If you want to survive in the fee for service  evaluation and management (E&M) system, you must master CPT®  coding and be your own expert on every patient  every time.  If you are concerned about getting audited, you must understand that E/M is about following the rules with good faith.  If you document appropriately, you should bill appropriately.    If you want to get paid for the work you do, you must understand the CPT® process works, regardless of where you fall on the bell curve.

After asking the physician what they have been doing for the last two weeks now that consult codes have been eliminated, the response was simply to "bill a level two admit instead of a level four consult for just about everyone".

I was stunned, shocked and floored by this response.
Happy:  You do realize that if you are billing a level four consult or a level two admit on your patients, just about every single one of them will qualify for a level five consult or a level three admit.  Doc, you are throwing away tens of thousands of dollars a year because you don't understand CPT® coding"
After I went through a brief  impromptu lecture on  how to bill CPT® 99232, the following conversation ensued:
Subspecialist:  "Happy, maybe you do know what you're talking about"
Happy:  Yes doc, I do, and you are throwing thousands  of dollars out your Lexus every day."
Let me run you through the mathematics of CPT® coding and how it relates to annualized revenue potential lost because you choose to bill a mid level CPT® code instead of  billing for the work you actually did and should have documented.

In my state, here are payments for some common E/M CPT® codes.

99222 Mid level hospital admit code:  $115
99223 High level hospital admit code:  $170
99232 Mid level hospital follow up code: $60
99233 High level hospital follow up code: $90

I went back and reviewed my 2008 admission data.  In 2008 I billed 313 high level admissions (99223) and two mid level admissions (99222).  That's because I know how to document and billing a level two admit when you do the work of a level three admit is not only irrational,  it's considered Medicare fraud to under bill.   Unfortunately for you, you'll never find a Medicare audit complaining that you under bill your CPT® codes.

What was my distribution of level two hospital follow up codes (99232) to high level hospital follow up codes (99233) in 2008?  Of approximately 1,400 inpatient hospital follow up codes I billed in 2008, the distribution was right about 50% for each.  The jump from a mid level  hospital follow up to a high level hospital follow up requires a little more documentation than it does for the admit codes, but doing so helps you get paid for the work you are performing.

What does this mean on an annualized revenue basis?  Let's run some numbers for my good E&M subspecialist friend I referenced above.

Coding Scenario #1
  1. Three consults a day being billed at midlevel (99222) and 10 follow up visits a day being billed 80% midlevel (99232) and 20% high level (99233)
  2. Converting this to all high level admissions (99223) and a 50% distribution for follow ups
On an annualized basis an office with these types of numbers seeing a 100% Medicare population, seeing patients 365 days a year could generate hospital revenue of (3*$115 + 8*$60 + 2*$90)*365 = $366,825 .  What could that revenue look like if coding was done appropriately?  This office could generate  (3*$170 + 5*$60 + 5*$90)*365 = $459,900.  That is a difference of $93,075  (25% )for doing nothing more than approaching CPT® medical coding with accuracy.

Coding Scenario #2
  1. Six consults a day being billed at midlevel (99222) and 15 follow up visits a day being billed at 80% (99232) and 20% high level (99233)
  2. Converting this to all high level admissions (99223) and a 50% distribution for follow ups
Here are your revenue numbers:
  • Before accurate coding:  (6*$115 + 12*$60 + 3*$90)*365=$613,200
  • After accurate coding:  (6*$170 + 7*$60 + 8*$90)*365= $788,400
If this office could get its doctors to optimize their CPT® medical coding under this simple but highly plausible scenario, they could realize an additional $175,200 a year in additional revenue, a 28% increase.

Coding Scenario #3
  1. 10 consults a day being billed at a mid level (99222) and 20 follow up visits with a 80/20 distribution between mid level and high level codes
  2. Converting this to all high level admissions codes (99223) and a 50/50 distribution for mid and high level follow up codes
Here are your revenue numbers:
  • Before accurate coding: (10*$115 + 16*$60 + 4*$90)*365= $901,550
  • After accurate coding : (10*$170 + 10*$60 + 10*$90)*365= $1.168,000
If the doctors in this scenario were able to learn corect CPT® medical coding and apply it to real world situations, they could increase their revenue by $266,450 a year, or 30%.  That's how much money doctors leave on the table when they allow their fear and ignorance of the CPT® process guide them in their lack of daily documentation.  With continued pressure to reduce costs and ever declining payments to doctors on an inflation and rising overhead cost basis, E/M is necessary to not only surivive, but to thrive.  Many doctors have implemented fancy EMR systems to help assist in this process.  You can see much more for free in my lectures on medical billing and coding and in my resource center for hospitalists.  


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