Payback: TrailBlazer Seeks Refunds for Erroneous Coding Claims

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Medical Economics Feature - June 2005

By  Ken Ortolon
Senior Editor  

Physicians have complained for years that Medicare rules on billing for consultations are confusing. But, now, that confusion could hit them in the pocketbook. TrailBlazer Health Enterprises, the Texas Medicare carrier, is sending letters to about 4,000 Texas physicians who bill for consultation services asking them to check their records and refund inappropriate payments.

The letter will outline the most commonly encountered errors TrailBlazer has identified by reviewing medical record documentation that supports claims for consultation services.

"The purpose of the letter is to increase physician awareness and provide education about the billing and documentation requirements for consultation services," said Judith P. Culver, TrailBlazer's director for Medicare Part B medical review, coverage policy, and provider education and training.

"Physicians will be asked to conduct a self-audit and refund any overpayments identified, if appropriate."

Texas Medical Association leaders and TrailBlazer officials say confusion over coding for consultations is a longstanding problem.

"Incorrect coding and documentation of evaluation and management [E&M] codes, including consultations, has been a major concern to TrailBlazer," Ms. Culver said.

The U.S. Department of Health and Human Services Office of Inspector General (OIG) apparently is concerned, too. It has prepared a draft report claiming that services billed as consultations were often coded at the wrong level or should not have been coded as consultations at all. The report, based on 2001 data, puts the prices for miscoded consultations at $613 million.

However, the OIG says the report is preliminary and was mistakenly posted on the Centers for Medicare & Medicaid Services (CMS) Web site in March. It was removed at the OIG's request.

OIG spokesman Don White says the report is still in its "early stages" and would not speculate on when a final version might be released. "There are no conclusions whatsoever at this point," he said.

While Ms. Culver was unfamiliar with and would not comment directly on the draft OIG report, she says consultation services represent the third highest coding error rate in the company's payment area, which includes Texas and the mid-Atlantic. Subsequent hospital visits and initial hospital services had the top two error rates, she says.

In fact, physicians who work with TrailBlazer have one of the highest error rates in the country when it comes to coding for consultations, according to CMS. In its Improper Medicare Fee-for-Service Payments Report , which covered claims for 2003, CMS says TrailBlazer providers had a consultation coding error rate of 36.5 percent.

Ms. Culver says that is "troubling," adding that consultation coding errors appeared to be higher for 2004 than for 2003. 

Advice or Treatment?  

TMA officials say they have known for some time that consultation coding was a problem, but they say the rules are confusing. In fact, TMA has been seeking clarification of the rules from TrailBlazer for several years.

Beginning as early as February 2002, TMA raised the issue in a series of meetings with TrailBlazer officials.

"It's never been real black and white," said TMA President Robert Gunby, MD, who participated in many of those meetings as chair of TMA's Council on Socioeconomics. "It's always been kind of a gray area."

The confusion revolves around whether a specialist is simply asked to render advice or an opinion about the treatment of a patient or whether care of that patient is actually transferred to the specialist. Physician consultants can bill for a higher fee for a consultation than if they actually provide care under a referral, which correctly should be billed as an office or hospital visit rather than as a consultation.

But TMA says Medicare rules are often contradictory and do not clearly differentiate between a consultation and the transfer of care. For example, the carrier manual lists several examples that would constitute a request for consultation, but TMA feels they more appropriately describe referrals for treatment.

TMA also questioned a rule that says a physician consultant may "initiate diagnostic and/or therapeutic services," which TMA suggested involves the transfer of care of the patient.

TrailBlazer has since published several articles in its newsletter intended to clarify some of these issues, but the articles contained numerous contradictions, TMA officials say.

Ms. Culver says TrailBlazer has numerous educational materials on its Web site to help physicians with consultation coding issues. Those resources include frequently asked questions related to correct coding and documentation of consultations, and free, general computer-based training modules on topics such as coding and documentation of E&M services and medical record documentation. Those resources can be accessed at

Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email at  Ken Ortolon .  



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