business briefs How to Conduct Internal Audits in the Wound Care Clinic

How to Conduct Internal Audits
in the Wound Care Clinic
Donna J. Cartwright, MPA, RHA, CCS, RAC, FAHIMA & Kathleen D. Schaum, MS
The new coding system allows for
more granularity (specificity) of disease
states and, therefore, will require refinement of your documentation in order
to select the appropriate ICD-10-CM
Diagnosis code(s). Some of the changes
that ICD-10-CM will bring are:
• I nformation relevant to ambulatory
and managed care encounters
• Expanded injury codes
reation of combination codes to
reduce the number of codes needed
to fully describe a condition
• Addition of 6th and 7th characters to
the existing 5 characters
lassifications specific to laterality
(right, left, bilateral)
lassification refinement for increased granularity of data.
The adage, “Old habits die slow,” applies to teaching medical professionals to
change their documentation habits.
Therefore, wound care professionals
should start transitioning documentation one disease state at a time. Then,
begin conducting internal audits of that
documentation. We must begin now
to improve our documentation to meet
today’s requirements and to prepare for
the ICD-10-CM requirements of the
near future. n
uring the first 6 months of 2012,
Today’s Wound Clinic editorial board
members Donna Cartwright and
Kathleen Schaum offered Clinical Documentation Improvement (CDI) webinars that stressed the importance of
thoroughly documenting the important
work that wound care professionals provide to patients. If you missed the CDI
webinars, you can still register to listen
to the archived programs, which will
help you and your team build a strong
“documentation house” as opposed to a
“documentation house made of cards”
In addition, the one-day Wound Clinic Business seminar taught by Andrea
Clark, RHIA, CCS, CPCH, chairman,
chief executive officer, and founder of
Health Revenue Assurance Associates,
Plantation, FL, and Schaum has received
excellent evaluations from attending
physicians, podiatrists, non-physician
practitioners, program directors, clinical
managers, coders, billers, revenue integrity directors, compliance officers, and
other support personnel for wound clinics throughout the country. This year’s
theme is “Investigate Your Team’s Wound
Care Revenue Cycle.”
In this action-packed seminar, Clark
and Schaum discuss organizational pro-
cesses, physician orders and signatures,
documentation, coding, billing, coverage,
auditing, and much more. Both speakers
emphasize they are concerned more about
wound care professionals keeping payments they’ve already received than they
are about the wound care professionals
“getting paid.” If you and/or your wound
care management team wish to take part
in this timely seminar, you can register at
By participating in one or both of these
educational opportunities, you will clearly
learn the importance of conducting internal audits of your documentation, coding,
and billing before external auditors come
knocking at your door.
One of the most frequently asked questions that wound care professionals ask at
these programs is: “What wound carerelated topics should we audit?” Beginning on page 8 you’ll find audit topics
and documentation you should expect to
encounter in order to pass your audit and
keep payments that you already received.
These audit topics and documentation
needed to pass an audit should be some
of the first items on your internal audit
to-do list.
Even topics that you think are not questionable in your facility are often found
to be problematic during internal and
external audits.
By now you know the implementation of ICD-10-CM has been extended
until Oct. 1, 2014, by the Centers for
Medicare & Medicaid Services. While
the information provided to you in this
article is pertinent to auditing your
documentation at the present time,
you should begin to further refine your
documentation to support the ICD-10CM diagnosis coding system.
Information regarding coding, coverage, and
payment is provided as a service to our readers.
Every effort has been made to ensure the accuracy of the information. HMP Communications
and the authors do not represent, guarantee, or
warranty that the coding, coverage, and payment
information is error-free and/or that payment will
be received.The responsibility for verifying coding,
coverage, and payment information accuracy lies
with the reader.
August 2012 Today’s Wound Clinic®
Donna Cartwright is senior director of strategic reimbursement for Integra LifeSciences
Corp., Plainsboro, NJ. She can be reached at
609-936-2265 or via [email protected]
Kathleen D. Schaum is president and
founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL. She can be reached
for questions and consultations at561-9642470 or [email protected]
Supervision of HospitalBased Outpatient
Wound Care Department
Basic Rules
Documentation to Support the Rule During an Audit
HOPDs must have “direct supervision” for
every patient encounter. The supervision can
be provided by physicians, podiatrists, and
non-physician practitioners.
HOPDs should post a schedule of physicians, podiatrists, and/
or non-physician practitioners who will provide “direct supervision” for every patient encounter. Schedules should be filed for
at least 7 years in case they are needed for an audit.
Audit Topic
HOPDs are not one of the departments that
should use monthly series bills. Each patient
encounter should begin with a new registration and should be billed after each visit.
Registration records should show a new HOPD registration for
each patient. The physician should document, in the medical
record, the exact reason for each patient encounter and the
exact diagnosis code(s) that pertain(s) to that encounter: the
reason for the visit and the diagnosis code are often different
from visit to visit.
Monthly Series Bills vs.
Single-Visit Bills
NOTE: Providers who are scheduled to provide “direct supervision” should have appropriate hospital credentialing and should
be practicing within their respective state’s scope of practice.
The person who creates the “direct supervision” schedule
should ensure the wound care professional scheduled for “direct
supervision” will not be performing another procedure or service
that cannot be interrupted during the time he/she is responsible
for “direct supervision.” In addition to schedules, key entry
systems [that log physicians in and out of the facility on a time
clock] may be able to demonstrate the physician is/was on site
and is/was available to immediately assist.
For a patient’s first visit to the HOPD,
a new patient clinic visit should only be
billed if the patient has not been registered
anywhere in the entire hospital system for
the past 3 years.
New vs. Established
Clinic Visit Codes
NOTE: Audits should reveal an individual medical record and a
claim for each patient encounter. Be sure that the auditors are
aware of how your medical records are organized: help them
easily find the information needed.
NOTE: The HOPD clinic visit level may vary
from the physician’s evaluation and management (E/M) level: Physicians can bill for a
new patient E/M as long as the patient has
not been seen by any physician of the same
specialty who belongs to the same group
practice within the past 3 years.
Diagnosis Codes
That DO NOT Reflect
Diagnosis codes submitted on insurance
claims should match the documentation
found in the patient’s medical record. Diagnosis codes should not be selected just to
cause payment of the claim.
By using the Master Patient Index during the patient’s registration, the Registrar should verify whether the patient has a medical record number anywhere in the health system for the past 3
years. If the patient has previously received a diagnostic service
that does not require a face-to-face encounter with the patient
(eg, an X-ray), this patient is still considered a new patient.
NOTE: Audits should reveal the appropriate “new“ or “established“ clinic visit levels for HOPDs and evaluation and
management levels for physicians. Even though the HOPDs
and physicians use the same CPT® codes to represent these
services, the coding rules are different. Therefore, the HOPD
and physician clinic visit codes will rarely match.
The physician, podiatrist, or non-physician practitioner should diagnosis the patient’s condition at each encounter. That diagnosis
should be validated in that day’s documentation (ie, history and
physical, progress notes, orders, and procedures or services).
Although this seems like common sense, some hospital billing
systems obtain the diagnosis code from the registrar and fail to
go back and obtain the actual diagnosis code from the documentation in the medical record. In some electronic medical records,
previous diagnoses are brought forward to the current encounter
even though they may not be pertinent to the current encounter. These diagnoses should be removed or inactivated on the
problem list.
NOTE: Audits should reveal that the diagnosis code is supported
by the documentation in the medical record for a specific patient
encounter. The diagnosis in the medical record should exactly
match the diagnosis on the claim for that encounter.
August 2012 Today’s Wound Clinic®
Modifiers That DO NOT
Reflect Documentation
Basic Rules
Documentation to Support the Rule During an Audit
A modifier should only be used
when the documentation in the
medical record justifies the use of
the modifier. Modifiers should not
be used just to cause payment of
the claim.
The modifiers that are often used without adequate documentation are:
Modifier 25 - Significant, separately identifiable E/M service by the
same physician on the same day as the procedure or other service.
Reporting an E/M service with modifier 25 is only appropriate if one of
the following conditions has been met and clearly documented in the
medical record:
Audit Topic
A. T
he patient requires evaluation “above and beyond” what is typically
expected as part of the evaluation prior to the procedure.
B. The patient’s condition has changed or worsened and the patient
needs to be re-evaluated.
C. The patient presents with a new, separate problem than what
prompted the procedure.
Modifier 22 - Increased Procedural Service should be billed with supporting documentation. The documentation should reflect the work was
substantially greater than normal. It must also state the reason causing
the additional work, such as increased time, intensity, technical difficulty,
or severity of the patient’s condition.
Modifier 24 - Unrelated E/M service by the same physician during
the postoperative period. Practitioners should clearly document the
reason the service is unrelated to the original procedure, such as a new
NOTE: Auditor should be able to identify documentation in the medical
record to warrant use of the appropriate modifiers.
The physician, podiatrist, or non-physician practitioner who performed the
surgical procedure in an HOPD must thoroughly document his/her work
just as if it were performed in the operating room. The operative report or
procedure progress note should contain the following information:
Surgical procedures such as surgical debridement (11042-11047) and
application of skin substitute grafts
(15271-15278) should only be used
when appropriate surgical procedure notes that meet the payer’s
requirements are documented in the
patient’s medical record.
Surgical Procedures That
ARE NOT Appropriately
• Preoperative and postoperative diagnosis
• Wound location
• Wound stage or grade, if appropriate
• Wound appearance (color, texture, temperature, or signs of infection)
• Wound margin description
• Anesthesia used
• Instruments used
• Type of tissue removed, if any
• Wound size before and after debridement, if performed
• Blood loss or fluid replacements
• Product name and size
• Amount of product used (in sq cm)
• Amount of product discarded (in sq cm)
• Method of fixation
• Dressings applied
• Complications, if any
• Postoperative orders such as offloading, dressing-change frequency,
medications, etc.
NOTE: The audit should reveal a thorough operative report or procedure progress note from the physician, podiatrist, or non-physician
practitioner who performed each surgical procedure. Documentation
with words such as “debrided wound” or “applied skin substitute” is
not adequate. Today’s Wound Clinic® August 2012
Documentation to Support the Rule During an Audit
When products and/or procedures
are provided that include units of
measure in their descriptions, the
medical record should document
the units of measure provided/performed. In addition, the insurance
claim should match the documented
units of measure.
Units of measure documented in the medical record must match the units
billed on a claim. Many CPT® and Healthcare Common Procedure Coding
System codes for procedures and products involve units of measure
such as:
Sq cm for debridements/application of skin substitutes.
Per sq cm for skin substitute products. (NOTE: Remember to document amount of product used and product wasted.)
Inappropriate Number
of Billing Units
Basic Rules
Audit Topic
Per treatment time (ie, every 15 minutes).
Per session for physician coding of hyperbaric oxygen therapy.
Be sure to check your Charge Description Master (CDM) to ensure
proper units of measure are listed for each code. Improper units on the
CDM will cause claims to be over- or under-billed.
HOPD personnel cannot perform any
services/procedures or provide any
products without a physician’s order
and signature.
Because HOPDs are required to have “direct supervision,” physicians,
podiatrists, or non-physician practitioners must write and sign an order
in the medical record before HOPD nurses (even when wound care
certified) can perform a service or procedure, or can apply a different
dressing or apply a piece of equipment. The signature must be legible
and must match the hospital’s signature authentication document.
Physician Orders
and Signatures
NOTE: The auditor should be able to match the units documented in the
medical record to the units submitted on the insurance claim.
Authentication requirements, rules, and responsibilities for orders
should be documented in the medical staff’s bylaws, rules, and regulations.
When physicians, podiatrists, and
non-physician practitioners perform
work in an HOPD, they should
use the Place of Service code 22,
outpatient hospital, on their Medicare
claims. They should not use Place of
Service code 11, office.
Place of Service on
Physician, Podiatrist,
and Non-Physician
Practitioner Claims
NOTE: The auditor should be able to match every service and/or
procedure and every new product used back to a legible order signed
by the physician, podiatrist, or non-physician practitioner.
“It is extremely important that you correctly code the place of service
on Part B claims. Using non-facility Place of Service codes for services
that are actually performed in hospital outpatient departments or Ambulatory Surgical Centers (ASCs) often results in overpayments. You must
ensure that you have adequate controls in your (or your billing agent’s)
billing routines to identify potential Place of Service coding errors.”
Audit Finding of the Office of the Inspector General (OIG)
The OIG conducted an audit to determine whether physicians correctly
coded non-facility Places of Service on selected Part B claims submitted to and paid by Medicare contractors. That report, “Review of Placeof-Service Coding for Physician Services Processed by Medicare Part B
Carriers During Calendar Year 2007,” is available to the public at http:// on the OIG website.
The OIG found, in many instances, physicians are incorrectly coding the
Place of Service code. Specifically, in a very large portion of the claims
audited, physicians used non-facility Place of Ser
heir claims for services that were actually performed in hospital outpatient departments or ASCs. This led to overpayments by Medicare
on these claims. Medicare does recover these overpayments, so it is
critical to code correctly and avoid overpayments.” Source: MLN Matters® Number: SE1104
August 2012 Today’s Wound Clinic®
HOPDs, physicians, podiatrists, and non-physician
practitioners should verify
the name of the Medicare
contractor who processes
their claims. They should
keep in mind the contractor who processes HOPD
claims may be different
than the contractor who
processes the claims of the
physicians, podiatrists, and
non-physician practitioners.
It is extremely important to download all associated medical coverage policies
for your wound care business. The medical policies contain a large amount of
information relative to coverage, coding, documentation, and billing instructions.
Once the Medicare
contractor(s) is/are identified, someone should be
assigned to obtain the
Local Coverage Determinations (LCDs) pertaining to
all services, procedures,
and products provided to
patients in the HOPDs. The
person designated to this
task should check for updates, drafts, and new LCDs
on a monthly basis.
The HOPD manager, coding staff, or other qualified individual should do a
complete search for all insurance medical policies affecting their business, especially your top 10 procedures). The search for each payer’s medical policy (ie,
Medicare parts A and B, Medicaid, private payers, etc.) should include policies
that mention the following terms: wound care, debridement, skin substitutes,
bioengineered or tissue-engineered skin, human skin equivalents (research
each type used in the HOPD), wound dressings (research each type used in the
HOPD), negative pressure wound therapy, non-covered services, use of CPT®
modifier rules, enzymatic debriders, and any other types of specialized therapies
provided by the HOPD.
Documentation to Support the Rule During an Audit
Medicare has 15 Medicare Administrative Contractor (MAC) jurisdictions. Each
MAC has one or more medical director who creates his/her own medical policies for their jurisdiction. Likewise, on the private payer side: all private payers
have their own medical directors who write their own medical policies. It is
important to remember that many private payers have a variety of medical plans
with varying levels of benefits. Therefore, the private payer benefits may widely
vary based on the specific plan purchased by the individual or the employer. For
example, one plan may cover a certain treatment while another may not cover
the same treatment.
The following link goes to the Medicare Coverage Database, where you can
begin your search for LCDs:
overview-and-quick-search. Many private payers’ policies can only be viewed
by providers via their provider ID number. HOPDs can obtain their provider ID
number by requesting it from the billing or coding department.
with Medicare
Local Coverage
Basic Rules
Audit Topic
As you locate the pertinent LCDs and medical policies, print them and place
them in a binder(s) that is/are easily accessed by the physicians and HOPD staff.
The entire professional team
that works in the HOPD
should review all LCDs and
should have easy access
to them when they are
providing wound care to their
patients. If the patient does
not meet the LCD medical
necessity requirements,
the wound care professional should be prepared to
provide the patient with an
Advanced Beneficiary Notice
of Non-Coverage (ABN).
By reading and frequently referring to the LCDs and medical policies, healthcare providers will be able to identify procedures and products that are covered
and not covered. Most LCDs and medical policies specify the documentation
requirements that must be followed carefully to stand up under audit. If coverage
is only provided for certain disease processes, the covered ICD-9-CM diagnosis
codes will be listed in the LCD or policy.
The policies may outline the frequency of treatments allowed for certain products, and may even give guidance on the use of CPT® modifiers. For instance,
policies for skin substitutes may require specific modifiers for wastage and
define modifiers for “used as a graft” or “not used as a graft.” Toward the end
of the policy, the medical directors often provide the reference sources that
were used. CAUTION: Some LCDs and medical policies have related articles
and attachments. Hyperlinks to these important guidance documents are usually
found toward the end of the LCD and policy. It is very important to read and
print each article/attachment.
If the physician has information about the patient’s insurance medical policies,
they can discuss all options for care. If, for any reason, the recommendation
for treatment is not covered by Medicare, the physician should take the time to
discuss the non-coverage with the patient and give the patient the opportunity to
accept the treatment and agree to pay for the treatment or to decline the treatment. The physician should also obtain a signed ABN from the patient.
A copy of the HOPD and physician charge sheets should be available to assist
the physician or practitioner to advise the patient on exactly what they may be
responsible for paying out-of-pocket. This charge information is also required on
the ABN. The following is the link to the Medicare ABN and instructions completion: Today’s Wound Clinic® August 2012