Physician Emergency Department Encounters to be Audited

The August update to the OIG Work Plan has been released.  The most recent update includes auditing of Medicare professional emergency department encounters to determine whether encounters were medically necessary, sufficiently documented and appropriately reimbursed. 

Emergency department visits are listed as part of the top 20 services with the highest improper payments in the 2020 Medicare Fee-For-Service Supplemental Improper Payment Data with an error rate of 6.9%.  A large percentage of the errors identified were related to level 5 ED services. The report identified the types of errors as follows:

  • No documentation
  • Medical necessity
  • Insufficient documentation
  • Incorrect coding

Some CMS MACs began pre-payment reviews of ED services and found the following frequently noted denial reasons:

  • Key components did not support the E/M level of service billed
  • The information submitted did not support the level of service billed and were down-coded
  • The billing provider was not the rendering provider

HBE has conducted numerous audits of emergency department documentation and coding.  We have noted the most common errors are related to level 4 and level 5 encounters.  These errors are often due to:

  • Coding based on volume of documentation
  • Insufficient documentation to support a comprehensive history and exam
  • Insufficient documentation to support high complexity medical decision making

The appropriate selection between a level 3 and level 4 emergency department encounter is difficult for many coding professionals and are often the source of coding errors. 

E/M LevelHistoryExamMDMNature of Presenting Complaint
Level 3ExpandedExpandedModerateModerate Severity
Level 4DetailedDetailedModerateHigh Severity

Both levels are associated with “moderate complexity” decision making.  In an EHR environment where complete/comprehensive histories and exams are commonplace, it forces coders and auditors to make determinations regarding how much history and exam was necessary based on the nature of presenting complaint(s) in order to select the level of service. 

As noted, level 3 encounters are associated with a presenting complaint(s) of moderate severity which is defined as: “A problem where the risk of morbidity without treatment is moderate; there is moderate risk of mortality without treatment; uncertain prognosis OR increased probability of functional impairment”.

Level 4 encounters are associated with a presenting complaint(s) of high severity which is defined as, “A problem where the risk of morbidity without treatment is high to extreme; there is a moderate to high risk of mortality without treatment OR high probability of severe, prolonged functional impairment”.  “These problems require urgent evaluation by the physician, or other qualified health care professionals but do not pose an immediate significant threat to life or physiological function”. 

It is important for coders, as well as providers, to be mindful of these definitions and criteria when assigning a level of service to reduce the likelihood of allegations of up-coding and to support medical necessity.  As an example, it is unlikely a level 4 encounter would be appropriate for a 16-year old, healthy patient, with localized foot pain following minor trauma isolated to the foot. 

Providers should also be aware of upcoming changes for documentation and coding of emergency department encounters.  In February, the AMA indicated they will be publishing revisions to the emergency department guidelines and codes with an effective date of January 1, 2023.    The AMA has not yet released what is included in those revisions.

We recommend conducting auditing and monitoring of your emergency department visits to validate the documentation is sufficient to support the level of service assigned, that services were medically necessary and the reimbursement received is appropriate.

HBE’s team of coding and compliance experts is available to assist you with external reviews of your documentation, coding and reimbursement, process reviews, and data analysis.  Additionally, we can provide customized education and training for your administrative and clinical staff.  We are also available to provide assistance with conducting risk assessments, internal investigations and policy and procedure development.  

The OIG Work Plan can be found here:

To view the CMS CERT report for 2020 go to:

DISCLAIMER:  This newsletter contains only summary information and highlights; it should be read in conjunction with the full article or document provided as a link.  Any advice or recommendations are general and specific questions should be directed to professional counsel

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