CODING Q&A

Medicare Stepping Up Audits Of ‘New Patient’ Rule

Three-year window differentiates ‘new’ from ‘established.’

BY RIVA LEE ASBELL

CMS recently stepped up its auditing of payments for new patient claims. Some patients you may have been coding as “new” are now to be coded as “established,” which means your practice will get reimbursed less for these patients. This is a little-understood area of coding violations that Medicare recently designated as an audit issue.

TRUE OR FALSE

To better understand this change in Medicare’s approach, first answer which of these statements is true or false:

• If I join a new practice with a different tax ID number, I may bill as new patients any of my former patients whom I examine in the new office for the first time, because they are new to the practice and that would entail making up a new chart and more chart documentation.
• Since I only saw the patient as a consultation in the hospital, when I examine the patient in the office for the first time the practice can bill the encounter as a new patient visit.
• Our practice is often referred patients for fluorescein angiography studies but none of the practice doctors examine them. We do an interpretation and report as well, sending the technical information. We will be paid the full fee for the diagnostic test, which includes the professional and technical component. If the patient then returns for an examination, we could bill this encounter as an established patient visit.

All three answers are false. The first and second are false because the provider’s NPI is the same in all encounters, and only the first face-to-face encounter qualifies for coding as a new patient. In the third scenario, there was no face-to-face physician encounter with the patient, so the encounter may be coded as a new patient.

MEDICARE’S DEFINITION

For those who need and want references, Medicare provides the following information in the FAQ and Internet Only Manual:^1,2

Interpret the phrase “new patient” to mean a patient who has not received any professional services, ie, evaluation and management service or other face-to-face service (eg, surgical procedure) from the physician or physician group practice (same physician specialty) within the previous three years. For example, if a professional component of a previous procedure is billed in a 3-year time-period, eg, a lab interpretation is billed and no E/M service or other face-to-face service with the patient is performed, then this patient remains a new patient for the initial visit.

An interpretation of a diagnostic test, reading an x-ray or EKG etc., in the absence of an E/M service or other face-to-face service with the patient does not affect the designation of a new patient. Beginning in 2012, the AMA CPT instructions for billing new patient visits include physicians in the same specialty and subspecialty. However, for Medicare E/M services the same specialty is determined by the physician’s or practitioner’s primary specialty enrollment in Medicare.

WHAT CMS IS AUDITING

Audits were prompted by Recovery Auditors (RAC) findings that some of the same physicians or groups have been billing new patient services more than once within a three-year-period. This includes E/M codes and Eye Codes, contrary to Medicare’s definition and guidelines. Based on the RAC audits, CMS is demanding refunds for any patient billed as a new patient but has had a previous encounter with the same physician — even if that physician is with a different practice — or within the same practice but with different physicians of the same specialty, within the three-year window.

CMS has mandated that MACS request refunds when:

• an established patient visit was billed prior to an initial visit within a three-year period by the same rendering provider; or
• the same provider, or different providers in the same group, who have the same specialty, billed more than one new patient visit within a three-year period.

Some patients you may have been coding as ‘new’ will now have to be coded as ‘established.’

HOW DOES THIS AFFECT YOUR PRACTICE?

The RAC audits match the provider’s NPI number with new patient billings (identified by CPT code), per patient, for a three-year period. In the following instances the patient should be billed as an established patient.

A new associate joins your practice and patients follow the physician to the new practice. Even though the patient has never been examined in that practice, the initial encounter should be coded as an established patient.

You start your own practice with a different tax ID number and patients follow you to the new practice. The first time a patient is examined in the new practice the visit is considered an established patient visit.

FINANCIAL IMPACT

The financial impact is potentially significant, because the reimbursement differential between a new and established patient is a notable. The national averages for 2013 on some of the most common codes and two main examples are:

• new patient comprehensive eye code (92004/$151.40) would have to be coded as established patient comprehensive eye code (92014/$126.22); and
• new patient comprehensive E/M code (99204/$164.67) would be best coded as established patient comprehensive eye code (92014/$126.22).

To avoid these audits, make verification of new patient status part of the check-in and even work-up process. RP

REFERENCES

1. Centers for Medicare and Medicaid Services. Available at: https://questions.cms.gov/faq.php?id=5005&faqId=1969. Frequently Asked Questions.Accessed December 20, 2013.

2. Centers for Medicare and Medicaid Services. Internet Only Manual, Publication 100-04 Chapter 12 Section 30.6.7A. Available at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf. Accessed December 20, 2013.