A Reliable Billing Method for Internal Medicine Resident Clinics: Financial Implications for an Academic Medical Center

Abstract

Background The financial success of academic medical centers depends largely on appropriate billing for resident-patient encounters. Objectives of this study were to develop an instrument for billing in internal medicine resident clinics, to compare billing practices among junior versus senior residents, and to estimate financial losses from inappropriate resident billing. Methods For this analysis, we randomly selected 100 patient visit notes from a resident outpatient practice. Three coding specialists used an instrument structured on Medicare billing standards to determine appropriate codes, and interrater reliability was assessed. Billing codes were converted to US dollars based on the national Medicare reimbursement list. Inappropriate billing, based on comparisons with coding specialists, was then determined for residents across years of training. Results Interrater reliability of Current Procedural Terminology components was excellent, with κ ranging from 0.76 for examination to 0.94 for diagnosis. Of the encounters in the study, 55% were underbilled by an average of $45.26 per encounter, and 18% were overbilled by an average of $51.29 per encounter. The percentages of appropriately coded notes were 16.1% for postgraduate year (PGY) 1, 26.8% for PGY-2, and 39.3% for PGY-3 residents (P < .05). Underbilling was 74.2% for PGY-1, 48.8% for PGY-2, and 42.9% for PGY-3 residents (P < .01). There was significantly less overbilling among PGY-1 residents compared with PGY-2 and PGY-3 residents (9.7% versus 24.4% and 17.9%, respectively; P < .05). Conclusions Our study reports a reliable method for assessing billing in internal medicine resident clinics. It exposed large financial losses, which were attributable to junior residents more than senior residents. The findings highlight the need for educational interventions to improve resident coding and billing.

Resident Awareness of Documentation Requirements and Reimbursement: A Multi-Institutional Survey

“…6 A recent study of outpatient internal medicine resident continuity clinics suggested that poor documentation and coding contributed to an annual forfeiture of approximately $500,000 in a department with 48 residents. 7 Moreover, such cost analyses fail to account for other potential costs, such as fraud. The Centers for Medicare and Medicaid Services (CMS) have recently increased their scrutiny of documentation and coding at academic institutions after a recent review suggested that 89% of patient encounters in Washington, D.C., were billed incorrectly, with most errors attributed to incomplete documentation relative to the level of service coded.…”

Education in Neurology Resident Documentation Using Payroll Simulation

“…10,13 To establish interrater reliability, 3 reviewers independently evaluated 10 random notes, as previously described. 4 The level of service was determined by 3 main components: history, examination, and medical decision making (MDM). History had 3 subcomponents: history of present illness (HPI), review of systems (ROS), and past history (PHx).…”

“…2,4,12 Over the following 16 weeks, all postintervention follow-up notes (n ¼ 273) were assessed in a similar fashion. To simulate a real-life payroll model, feedback (''paystubs'') reports were generated every 2 weeks by the raters and distributed via e-mail by the program coordinator, showing the number of patients seen, the income generated, the potential income lost, and the areas of deficiency.…”

“…[1][2][3] Furthermore, studies from multiple specialties report inadequate resident documentation and suggest a need for additional education. [4][5][6][7] A survey of 6 academic programs reported that only 31% of trainees received education on billing level differences, and 21% were informed of financial consequences from poor documentation. 8 A national, multispecialty panel of residents and fellows felt that the current training system fell short of adequately preparing them for practice, and additional training was needed in the billing and legal aspects of practice.…”

“…3,11,12 Evaluation and management checklists were previously used to assess financial losses from underbilling. 4 We incorporated E/M checklists into an educational intervention, simulating a real-life payroll with goals to improve resident documentation and minimize financial losses.…”