Physician Evaluation and Management Codes Draw Audit Scrutiny –Proper Documentation and Training is Essential Says Practice Management Institute

Medical billing practices, especially those involving erroneous selection of evaluation and management (E/M) services, can lead to big problems for healthcare providers, says Practice Management Institute. Best practice dictates the establishment of an ongoing internal E/M chart auditing process.

(San Antonio, TX) February 27, 2018 – Improperly coded claims, whether overpaid or underpaid, can cause a strain on a medical office’s reimbursement in terms of denials and lost revenue. Practice Management Institute today introduced a new certification program to help provider offices establish an ongoing internal auditing program that monitors proper documentation and correct evaluation and management guidelines.

“A good faith effort to follow coding and billing rules is not enough to protect provider’s livelihood,” said David T. Womack, President and CEO of Practice Management Institute.  “Medical coders with E/M chart auditing skills are better able to safeguard the physician claims.”

Libby Purser, a health information management supervisor for a north Texas multi-specialty provider network said that a clean claim should be paid in about 15 days, but if it’s denied it could take anywhere from 30 to 120 days. That in itself is incentive to have proper training for staff.

Medical coders need auditing skills, especially when it comes to reviewing evaluation and management reporting. Medicare inappropriately paid $6.7 billion for claims for E/M services in 2010 that were incorrectly coded and/or lacking documentation, representing 21 percent of Medicare payments for E/M services that year, according to a 2014 report conducted by the Departments of Justice, and Health and Human Services. The study indicated that E/M services were 50 percent more likely to be paid for in error than other Part B services and most of the improper payments resulted from errors in coding and from insufficient documentation.(1)

“Many independent provider offices don’t realize that if you are billing Medicare, you are required to have a working compliance plan that includes regular auditing and monitoring of claims.”

Womack said that when improperly submitted medical claims are paid, it can be very costly if problems are discovered later in a government or private carrier audit.

Employing certified professionals helps protect healthcare organizations and avoid potential problems. Laying the groundwork means provider and reimbursement staff training from organizations like PMI to reduce the risk of improper payments and audits.

Regardless of the type, all medical claims must account for certain factors. These include documentation of each patient encounter with relevant, accurate information, identification of health risk factors, and the patient’s response to treatment, among other general principles.(2) However, many healthcare organizations rely on electronic health record (EHR) systems, which make it easy for providers to use features like auto-fill and copy/paste. If these types of features aren’t monitored carefully, incorrect payment is possible as a result of inaccurate charting.(3)

“Auditors will take a group of what they deem to be random claims, usually 15-30 patients. They will analyze the percentage of those claims which they believe were overpaid and the amount of overpayment,” said Attorney Thomas L. O’Carroll. “The percentage or error rate of the sample is used to extrapolate to the total claims over a given period that may last usually several years.”

O’Carroll advised providers to be diligent in proper documentation, particularly documenting the essential elements support for a given E/M code because extrapolation can get very expensive. Overpayments can span several years based on that assumed error rate, and private providers are dependent on state law in terms of how far they can go back.

“If the auditors believe that in 12 of the 15 cases were overpaid, they will assume that 80 percent of all similar claims were likewise overpaid. The auditor will then calculate the total amount of overpayment based on that assumption,” said O’Carroll.

PMI’s new Certified Medical Chart Audit–E/M will be taught in select markets and online beginning this spring. PMI also offers coding and auditing classes and certifications that address E/M coding and auditing.

About Practice Management Institute (PMI): 

For more than 30 years, Practice Management Institute, also known as PMI, has helped physicians, hospital systems, medical societies, and educational institutions provide comprehensive education and training to medical office staff nationwide. By offering a variety of educational programs and professional certifications, PMI helps to build competency, compliancy, and effectiveness that assures the continued success of their clients.

Since PMI’s formation in 1983, more than 20,000 individuals have earned certification in one more areas of expertise. PMI is recognized by both the Centers for Medicare and Medicaid Services and the Department of Labor for training in: medical coding, third-party billing, office management, and compliance. PMI training helps ease the burden of running a successful medical practice through thorough education and up-to-date training for non-clinical staff, allowing physicians to focus on patient care to improve the experience of the patient. For online coding and compliance training at affordable rates, visit www.pmimd.com/onlinetraining.

About David Womack: 

David Womack, President and CEO, has been instrumental in PMI’s continued success since 1991. He has helped PMI transition into a cutting-edge leader in medical office staff education and training while developing key relationships with healthcare organizations, hospitals, colleges, and medical societies across the country. His commitment to excellence has helped PMI become an industry leader recognized by both governmental organizations and healthcare systems across the country. 


  1. The annual report of the Department of Health and Human Services and Department of Justice Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2014 https://oig.hhs.gov/publications/docs/hcfac/FY2014-hcfac.pdf
  2. Evaluation and Management Services. Centers for Medicare & Medicaid Services.
  3. Over coding? Under coding? RIGHT coding! Novitas Solutions.

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