Five Simple Steps to Help You Avoid Audit Headaches

February 2011
Management Home Page 

By Chappy Manning, RN, Certified Professional Coder
PSA, LLC, Billing Support Specialist

Certainly you’ve heard the admonition “it’s not a matter of if you’re audited, but when”, so in preparation for that time, it’s worth asking if your practice is prepared for a Medicare audit?  With the exploding field of molecular diagnostics and billable services for pathology comes expanding payments, yes – but also expanding regulations and scrutiny, placing a greater burden on pathologists and staff to keep current and compliant.  Following are 5 simple steps that should help to audit-proof your reports.

1. Use CPT terminology.
When you agree to participate with Medicare and commercial insurers, you accept responsibility for knowing their rules, including their language, so you can properly communicate and charge for your services. The CPT Manual is your translation dictionary, and you should always reference the current version (updated annually). Because pathology is a less common, less well-understood specialty of medicine, it’s doubly important that you use code descriptors right out of the book. For example, specimens sent as “bladder tumor” cannot be translated directly to any level bladder specimen – determine if it’s “Urinary bladder, biopsy” or “Urinary bladder, TUR”, and use that term in your report.

2. Know when it’s appropriate to code multiple units and separate specimens.
The AMA’s CPT manual defines ‘specimen’ as “Tissue or tissues that is (are) submitted for individual and separate attention, requiring individual examination and pathologic diagnosis. Two or more such specimens from the same patient (e.g., separately identified endoscopic biopsies, skin lesions, etc.) are each appropriately assigned an individual code reflective of its proper level of service.”   The definition implies that consideration for coding is placed on both the surgeon’s intended request and the pathologist’s requirements to make the diagnosis.  But guidance on choosing the number of units and separate vs. bundled specimens are also built into the CPT code definition.  For example, CPT 88304 “tonsil and/or adenoids” allows the singular tonsil (no “s”), so if right and left are separately designated and examined, 2 units may be coded.  But the “and/or” part of the descriptor specifies that adenoids are never separately billed from a tonsil when both are submitted – even though they are distinguishable. This is the most challenging area of pathology coding, and requires close attention to detail, and good communication with your referring clinicians.

3. Clearly document all billable services.
Fluid/washing/brushing cytology codes, tumor immunohistochemistry, FISH, and some other codes vary solely based on the methodology involved. Intra-operative specimen exam codes vary by methodology and number of blocks or sites examined.  When reporting these services, remember to include CPT language so that even someone unfamiliar with pathology will be able to translate to the proper code(s).  And avoid confusing syntax such as “The specimen is serially sectioned and tips are submitted for frozen section as A1, the remainder of the specimen is submitted in cassettes A2 and A3”.  It isn’t clear in this statement if 1 block, A1, was submitted for frozen, or if all 3 blocks were. A simple fix is to clearly label them FSA1, FSA2, etc. Also use care when documenting special stains – codes are properly assigned based on for stain (for microorganisms or other than microorganisms), so specify the finding in terms that support the code (e.g., “PAS stain negative for…”).

4. Insist on properly completed requisitions (and ABNs, if applicable).
Would your lab accept a specimen requisition without the patient’s name or description of the specimen? The same protocol should be followed if the requisition is missing diagnosis information.  Medicare may allow you to bill the patient for denied services, but the ABN must be their approved form, and properly executed.  All clinical lab tests, Pap tests, and anatomic pathology specimens with negative findings must be assigned ICD9 codes from the referring MD’s reason for testing.  The Balanced Budget Act states that the referring physician is required to provide diagnostic information at the time the test is ordered, and if not provided, the lab is required to contact the referring MD for this information. Defaulting to an undocumented ICD9 code could land you in trouble on an audit.  Designing a user-friendly requisition that points the clinician to supply all necessary information is well worth the time invested.  Stay tuned for final word on the regulation regarding referring MD signature on requisition.

5. Know and follow payer edits and rules.
The increased use of additional diagnostic testing such as flow cytometry, immunohistochemistry, FISH, etc. have led to an increase in coverage determination rules by Medicare and other payers. Documenting the medical necessity of all additional services provided is critical.   CMS’s initiative to control improper payment for Part B claims led to the NCCI edits. Billing certain code pairs for the same patient, same date of service requires the addition of a 59 modifier in order for both services to be paid. Because of the high potential for abuse, the OIG has identified the 59 modifier as a priority for investigation.  CMS has also defined an acceptable number of units per CPT code that is considered within reason, and units billed above that number are subject to MUE – medically unlikely unit edits. It is imperative for pathologists to document appropriately and thoroughly. Coders and auditors must be able to review reports and determine whether the 59 modifier is warranted. If you are simply adding a 59 modifier to the codes and re-billing when denied as ‘service not separately billable”, you’re setting yourself up for a major audit headache!

Unfotunately, the important question is no longer “will I be audited?” but “when will I be audited?”. Therefore, to help avoid audit anxiety, use CPT code language when reporting services and describing specimens, include the reason additional tests were necessary even when findings are negative, and make sure your lab gets all required information and communicates with referring physician offices as needed.

PSA is a leading provider of business services and support to pathology practices. For more information on PSA, please contact Diana Brooks at 800-832-5270 x 2988 or