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The American Society of Anesthesiologists is an educational, research and scientific association of physicians organized to raise and maintain the standards of the medical practice of anesthesiology and improve the care of the patient.


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January 1, 2013 Volume 77, Number 1
Practice Management: Will 2013 Be the Year of the Audit? Sharon Merrick, M.S., CCS-P

New and revised Current Procedural Terminology (CPT®) codes and any changes in the values assigned to services take effect on January 1 of each year. As important as it is to make certain your practice learns and follows any new coding rules, it is just as important to make sure that you are following all existing rules. Efforts to identify and correct improper, abusive or fraudulent coding and billing are increasing in scope and intensity.

The Recovery Audit Program has been in full swing since 2010. Under this program, the Centers for Medicare & Medicaid Services (CMS) contracts with private companies (recovery audit contractors, or RACs) to conduct issue-specific reviews of claims submitted to the Medicare Fee for Service (FFS) Program. It is expanding into Medicaid as well. These reviews can now include both pre- and post-payment audits. The program is intended to identify improper payments that would include both overpayments and underpayments. CMS recently released results of the Medicare FFS RAC reviews conducted from the start of FY 2009 through June 2012. Those results are summarized in Table 1 (next page). As each RAC is paid a percentage of the corrections it generates, this has proven to be a very cost-effective program for CMS.

Your local RAC is not the only entity taking a hard look at claims submitted. Each Medicare Administrative Contractor (MAC) conducts a claims review for medical necessity and for proper coding. A MAC’s criteria for what constitutes medical necessity can be found in its Local Coverage Determinations (LCDs). You can track your contractor’s coverage policies online through the Medicare Coverage Database ( This site is updated frequently and should be one you visit on a regular basis. Medicare contractors will also check your claims against the National Correct Coding Initiative (NCCI). The NCCI is a listing of services that would not ordinarily be reported together by the same practitioner for the same patient during the same encounter. The NCCI also includes Medically Unlikely Edits (MUEs) that impose limits on the number of times a specific procedure or service may be reported during a single patient encounter. Many private payers follow the NCCI as well. The NCCI is updated quarterly and is available online at

In addition to the RACs and the MACs and other entities that are looking closely at claims submitted, the Health and Human Services Office of the Inspector General (OIG) issues an annual work plan in which it announces the areas it plans to review over the coming year. When considering what to include in its yearly workplan, the OIG looks at areas where it believes there may be potential for improper payments. The 2013 OIG Work Plan was made available in fall 2012 and may be downloaded from

Items of note to ASA members in the 2013 work plan include: Anesthesia Services: Payments for Personally Performed Services (New) “We will review Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements. We will also determine whether Medicare payments for anesthesiologist services reported on a claim with the “AA” service code modifier met Medicare requirements. Physicians report the appropriate anesthesia modifier to denote whether the service was personally performed or medically directed (CMS’s Medicare Claims Processing Manual, Pub. No. 100-04, ch.12, § 50). The service code “AA” modifier is used for anesthesia services personally performed by an anesthesiologist, and the “QK” modifier is used for medical direction of two, three or four concurrent anesthesia procedures by an anesthesiologist. The QK modifier limits payment at 50 percent of the Medicare-allowed amount for personally performed services claimed with the AA modifier. Payments to any service provider are precluded unless the provider has furnished the information necessary to determine the amounts due (Social Security Act, §1833(e).). (OAS; W-00-13-35706; various reviews; expected issue date: FY 2013; new start)”

Physicians: Place-of-Service Coding Errors
“We will review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. Federal regulations provide for different levels of payments to physicians depending on where services are performed (42 CFR § 414.32.). Medicare pays a physician a higher amount when a service is performed in a nonfacility setting, such as a physician’s office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ambulatory surgical center. (OAS; W-00-11-35113; various reviews; expected issue date: FY 2013; work in progress)”

Evaluation and Management Services: Potentially Inappropriate Payments in 2010
“We will determine the extent to which CMS made potentially inappropriate payments for E/M services in 2010 and the consistency of E/M medical review determinations. We will also review multiple E/M services for the same providers and beneficiaries to identify electronic health records (EHR) documentation practices associated with potentially improper payments. Medicare contractors have noted an increased frequency of medical records with identical documentation across services. Medicare requires providers to select the code for the service on the basis of the content of the service and have documentation to support the level of service reported (CMS’s Medicare Claims Processing Manual, Pub. No. 100-04, ch. 12, § 30.6.1.). (OEI; 04-10-00181; 04-10-00182; expected issue date: FY 2013;work in progress)”

Now is the time to make sure you know the rules and are following them. They can be complex and can change at frequent and unanticipated intervals. In today’s environment, compliance involves more reporting codes from the current CPT® and ICD-9-CM code sets. You must also be certain that you are using those codes correctly. Take a close look at your claims – before someone else does.

Sharon Merrick, M.S., CCS-P is ASA Director of Payment and Practice Management in the Washington, D.C. office.

• Medicare Learning Network. Medicare Claim Review Programs: MR, NCCI Edits, MUEs, CERT, and Recovery Audit Program. Published July, 2012. Accessed November 14, 2012.
• Medicare Learning Network. How to Use the National Correct Coding Initiative (NCCI) Tools. Published January, 2012. Accessed November 14, 2012.
• Office of Inspector General, U.S. Department of Health & Human Services. A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse. Accessed November 14, 2012.