How to Avoid Coding Mistakes in Texas Medicaid

Editor’s note: This article was submitted by the Texas Office of Inspector General as part of a campaign to help educate physicians and other health care professionals identify and avoid common billing mistakes. 

Ensuring Texas Medicaid dollars are spent for their intended purpose requires the Texas Health and Human Services (HHS) Office of Inspector General (OIG) to work with health care professionals to prevent waste. Accurate medical coding is part of that work. Incorrect codes result in overpayments – which impact taxpayers – and underpayments, which can impact your practice.

The Centers for Medicare & Medicaid Services (CMS) requires each state to perform surveillance utilization reviews. The OIG’s Acute Care Surveillance (ACS) team reviews medical records to validate that the services billed and paid for conform to the policies of Texas Medicaid and managed care organizations (MCOs). For physicians, the OIG follows the coding guidelines set forth by the Healthcare Common Procedure Coding System and Current Procedural Terminology.

Validating Medicaid codes

To begin a coding review, the OIG’s ACS team analyzes statistically valid data that rank physicians and other health care professionals among their peers based on their billing patterns and payments received.

Data examined include, but are not limited to, patient demographics, physician specialty, and regional data. Like professionals are profiled among each other. Comparisons are also made according to specialty. For example, a doctor of osteopathy (DO) working in oncology would be compared with other DOs working in oncology.

An ACS nurse reviewer will examine a case involving a physician or medical practice that ranked on the initial scan and then request patient records to substantiate what was billed and paid. Requested records typically include but are not limited to:

  • All documentation for the day of service;
  • Patient complaints and symptoms;
  • Labs;
  • Treatment plan and progress notes, including prescriptions;
  • Prior authorizations; and
  • Referrals.

A physician with Texas Medicaid’s claims administrator will also review the records and the initial findings. An ACS nurse notifies the health care professional of the review’s findings. A case is closed without further action if patient records support the billing and payments. If billing errors are noted in a review, follow-up actions can include education and/or payment recoupment. Physicians have two opportunities to appeal the findings.

Common mistakes

The most frequent error the OIG observes in reviews is physicians submitting billing codes that are not supported by patient records. The physician’s notes should support everything billed for on the date of service and demonstrate medical necessity.

For each evaluation and management code billed, a physician must document the time spent with the patient and/or the level of medical decisionmaking involved for that date of service. Notes also should include any time spent educating the patient and family, prepping for the visit, and coordinating care. The level of visit also may include the history appropriate for that visit, but physicians should not clone notes from a patient’s previous visits. 

Including modifiers

Physicians must add the appropriate two-digit modifier if specific circumstances accompany a service or procedure. Using modifiers to add descriptive information, when necessary, can help improve the accuracy of recorded patient encounters. For example, if a physician has multiple nurse practitioners or physician assistants but doesn’t use a modifier to show that, the claims will look like one doctor is billing for simultaneous appointments throughout the day; that behavior often invites closer examination. 

When adding more than one modifier, list the payment modifier first and then those that add other information. Be sure that your documentation supports any added modifiers. OIG staff are currently using data analytics to monitor the use of COVID-19-related procedure codes and modifiers.

Mistakes add up

Coding errors proved costly for two outpatient hospital facilities in North Texas. The facilities billed critical care codes for emergency department visits when an evaluation and management code should have been used, which resulted in overpayments. The hospitals worked with the OIG to resolve the issues and agreed to settlements this year.

It is a physician’s responsibility to follow the latest coding and billing guidelines. Monitor changes in the online manuals from your MCOs, the Texas Medicaid & Healthcare Partnership, and CMS National Correct Coding Initiative edits.

Connect with the Office of Inspector General:




LinkedIn: hhsc-office-of-inspector-general

Last Updated On

October 15, 2021

Originally Published On

October 12, 2021