Article Date: 12/1/2011

Coding Fraud: Are You at Risk?
coding and billing

Coding Fraud: Are You at Risk?

Any one of these six actions can ruin you.

Richard S. Kattouf, O.D., D.O.S., Bonita Springs, Fla.

An optometrist in a northeastern state retained Kattouf Consulting Services (KCS) to appraise a practice at which he was employed and wanted to buy. In addition, he wanted KCS to negotiate the agreement between the parties. The sellable agreed-upon value for this practice was $900,000.

Prior to the contract signing, however, six FBI agents raided the practice during hours of operation. They instructed the doctors and staff not to leave and released patients after individual questioning.

The reason for the raid: The senior doctor, the seller, had been under investigation for insurance fraud. After learning of this, I immediately called the seller and reduced my client's bid to $500K. After all, in one fell swoop, the practice's excellent reputation had plummeted. The senior doctor accepted the new offer. (Incidentally, my client was not implicated in the investigation, as he was compliant in his billing and coding methods).

In addition to losing an additional $400K for his practice, the senior doctor's fraudulent practices also resulted in a ruined reputation, penalties and interest payments that will likely take all his retirement income, and he's facing possible incarceration.

The 2009 and 2010 amendments to the False Claims Act along with the agencies involved in enforcing the Act (e.g. FBI, Office of Inspector General, Centers for Medicare & Medicaid Services, the Administration on Aging, the Assistant Secretary for Public Affairs and the Department of Justice) emphasize the importance of compliance in the eyes of Medicare, Medicaid and TriCare.

Something else to keep in mind: Through a three-year period (2008 to 2010), the audit agencies return on investment was $6.80 for every $1.00 spent.1 The bottom line: They are on a mission to uncover non-compliance.

Here, I discuss six actions that place you at risk for an insurance fraud investigation.

1. No or outdated compliance manual

Studies were performed on improper utilization of CPT codes 99201-99205 for new office visits reported to Medicare. The overall error rate for a probe review was roughly 40%.2 An effective way to avoid this, and, thus, ending up on the non-compliance radars of the aforementioned agencies: Keep an up-to-date compliance manual in your practice. To accomplish this, get in the habit of checking the Centers for Medicare & Medicaid Services website ( as well as the insurance carriers' websites.

2. Complacency

Some cases of medical insurance fraud are the result of unintended negligence, rather than greed. You may have the best of intentions with your billing and coding practices, but unless all the numbers add up, the federal government could care less. Many times, this unintended negligence stems from complacency with the billing and coding process itself. Specifically, some optometrists and their medical insurance coordinators get into “history” and “habit” on their methodology of billing and coding. As a result, many times they fail to recognize recent changes in coding. As the owner, you have an obligation to protect yourself, your staff and your practice. Therefore, get out of the “history” and “habit” mindset, and undergo a coding compliance evaluation. You can find companies that specialize in this via your favorite search engine with the words “ophthalmic coding compliance” + “consulting.” (See “Reasons for Denial/Partial Denial of Payment for Services,” below.)

3. Belief in a popular falsehood

The popular belief among optometrists is that as long as you perform a comprehensive history and 14-bullet examination, the level of medical decision-making isn't relevant. Not true. In fact, the Centers for Medicaid & Medicare Services says: “Federal law requires all expenses paid by Medicare are ‘medically reasonable and necessary,’ and at audit Medicare will deny or down-code Evaluation/Management (E/M) services that exceed the patient's documented medical needs.

Dr. “Johnson” fell victim to this popular falsehood. Specifically, he had been utilizing retinal photography at a higher rate than colleagues who practiced in the same area and belonged to the same insurance. Due to this higher rate, the insurance carrier came knocking to investigate and found that the patient's documented medical needs were not in order. This insurance carrier, along with Medicare, requires a written order for the photography showing medical necessity. Further, the order should have been followed by the results of the photography and a separate interpretation and report. Then, the results should have been incorporated into a plan showing how the photography was helping to manage and treat that patient in going forward. But, without the supporting documentation, the insurance carrier asked for more than $200,000 back in reimbursement, removed the doctor from their panel and added fines and penalties. Dr. “Johnson” appealed and was reinstated, but he will not be paid for 92250s by the insurance carrier ever again, period.

4. Relying on EHR

Many physicians, optometrists included, believe that EHR will save them from having to understand and follow E/M services guidelines, as it will do the coding for them. This belief places these practitioners at risk for an insurance fraud investigation because these devices are not the diagnosticians. In other words, the practitioner is still required to exercise clinical judgment regardless of what these devices say. “Upcoding” is a common result of doctors relying on their EHRs to “code for them.”

For example, Dr. “Jones,” utilized his EHR to obtain a comprehensive history level with each patient. He sat patients behind a slit lamp, and hit nine exam bullets on every patient, regardless of medical-decision making. For a significant number of patients, he also measured intraocular pressure, reviewed optic discs and posterior segments. This resulted in these office visits skewing to a majority of level four (99214) and more than 900 level five (99215) — a definite red flag and potential for fraud, as again, insurance pays for medical necessity alone.

5. Double billing

Billing both the patient's vision plan and medical plan places you at risk for an insurance fraud investigation as well.

For instance, Dr. “Smith” would utilize the vision plan to bill for the routine vision portion of the visit and bill VSP, or the other vision plan, for the 92014, 92015 and link the refractive codes like myopia for those claims, AND on the same day, bill the medical insurance for 92014 linked to the medical ICD9 (when one presented) to the medical insurance. This is double billing and illegal.

6. Dual fee schedules and providing the same service under different CPT codes

This too, can get you in hot water. I once worked with a practice comprised of several doctors who utilized 92014 and 92015 for insurance patients and charged $175 to insurance companies, though also used Scodes at a fee of $75 for non-insurance patients. This coding no-no was illuminated when two members of the same family who had exams with a doctor at different times during the same months noticed this billing difference. They brought their complaint to the state attorney general, and a class action lawsuit was filed. The ruling of the trial: The insurance carrier made the doctor repay several hundred thousand dollars, all the doctors were kicked off the panel, and the practice nearly had to shut its doors. These doctors were eventually reinstated, but as an out-of-network provider for the aggrieved insurance company.

As a consultant to thousands of O.D.s, I come across some who procrastinate and play ostrich. Although these doctors don't do these things with malicious intent, it often garners them malicious consequences. Don't follow in their steps. If you're guilty of any one or more of the aforementioned actions, rectify them fast. OM

Reasons for Denial/Partial Denial of Payment for Services
The following issues were identified when evaluating medical documentation, which resulted in denial of payment for services:

► Requested medical records were not submitted.
► Documentation did not support a face-to-face encounter by the performing physician.
► Documentation did not support the service was rendered on the DOS reported.
► Submitted documentation contained insufficient information to determine if the service reported was actually rendered.
► Documentation did not support a covered service due to the inappropriate use of the Q8 modifier.
► Signature requirements were not met. That is, physician's signatures were either missing or illegible. (If the signature is illegible, the provider's name is supposed to be stamped or printed below the signature.)
► Did not report the code performed and documented in the submitted documentation.
► Additional faxed documentation did not capture all of the E/M key components.

Services recorded (partially denied) for one or more of the following reasons:

► Submitted documentation did not meet all three key components for the code reported.
► The level of E/M code reported exceeded documented needs for the patient's condition and the physician's work required to treat the patient.
► The CPT E/M Services Guideline's definition of a new patient was not met. Medicare beneficiary claims history identified the patient as an established patient of the physician group. The same physician or another member of the group with the same specialty had initially treated the patient prior to the DOS reviewed.
► Provider did not report the code that correctly represents the service performed and documented in the submitted medical records.

1. A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse. U.S. Department of Health & Human Services Office of Inspector General. (Accessed 11/30/11')
2. License for use of “Physicians' Current Procedural Terminology” (CPT) Forth Edition. (Accessed 11/30/11')

Dr. Kattouf runs two management and consulting firms. Call (800) 745-EYES (3937), or e-mail him at advanced Send comments to

Optometric Management, Issue: December 2011