E/M code analysis can promote optimum ED payment

Healthcare Financial Management, Jan, 2004

What data should you review to verify that your facility is receiving appropriate payment for emergency department (ED) services? You should start by looking at the distribution of evaluation and management (E/M) codes. Comparing your facility's distribution with CMS's national distribution will help you assess the accuracy of your facility's ED-visit code assignment. CMS has indicated that the distribution of ED E/M codes should reflect a normal bell curve.

To illustrate, consider the analysis of reported ED E/M codes for a facility that treats a variety of patients, from those requiring minor interventions to those who are severely injured or critically ill. Rather than finding a distribution similar to that reflected in the CMS data, as would be expected, the facility reported the greatest number of visits in Level 2. Upon redistributing its ED visits to reflect a normal distribution, the facility finds it may be losing $87,409 in revenue due to under-reporting of ED visit codes ($5,586,962 - $5,499,553 = $87,409).

Such under- reporting could have two possible causes. First, documentation must support the services provided and reported. In chart audits, nursing documentation plays a vital role, which becomes even more important when selecting the appropriate E/M codes for ED visits. The analysis, might indicate that the facility needs to improve its nursing documentation. Second, facility-developed E/M criteria for the assignment of ED visit codes may need to be reviewed to verify that the established criteria reflect the intensity of service at each level. It also should be verified that the criteria are being appropriately applied for ED services. Facility developed criteria should be based on nursing time and nursing interventions with the patient.

The data and analysis for this article were provided by Ingenix. For more information, contact Dave Clifton at dave.clifton@ingenix.com.