Code Words: What You Need to Know About Hiring a Coding Consultant

Coding for Medicare and other third-party payors is based on Current Procedural Terminology (CPT), a publication of the American Medical Association. It is a standardized list of descriptive terms...

Coding for Medicare and other third-party payors is based on Current Procedural Terminology (CPT), a publication of the American Medical Association. It is a standardized list of descriptive terms and identifying codes for reporting physician procedures and services.

The regulations for Medicare are many and dense. Billing the wrong codes can cost your practice money; undercharge, and receive insufficient reimbursement for your services. Overcharge and you run the risk of an audit, as well as possible civil and criminal penalties. Factor in the rules and regulations governing contracts with private third-party payors, and the situation becomes even murkier. The need for help when walking this particular tightrope has spawned a large number of coding consultants. However, determining which consultant is best for a particular practice and what services are needed may be almost as confusing as the regulations themselves.

Before a practice can decide which consultant to employ, it must decide what services it will actually need. “First and foremost, every practice should have an outside audit done at least annually,” said Susan Reese, CCFP, CCP, Director of Coding and Compliance at MedaPhase, Inc., in San Antonio, TX. “The audit is a way to make sure that the compliance program is effective and gives peace of mind.” However, most practices will probably require a more in-depth look at their processes, at least initially. The Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) has published Compliance Program Guidance for Individual and Small Group Physician Practices. This is a good place to begin assessing the possible discrepancies may need to be addressed.

“Within the Guidelines are some very specific requirements for what the coding and billing process needs to include to minimize the risk of being out of compliance,” notes Mary Stanfill, RHIA, CCS, CCS-P, Practice Manager, Coding Products and Services for the American Health Information Management Association (AHIMA). “Looking through the Guidelines should give an idea about which areas are in compliance, which are not, and which you aren’t sure about. The latter two categories are the ones consultants should focus on.”

A lack of focus can make the process much more expensive and may mean you have an inefficient match between the consultant’s knowledge and the practice’s information needs. Most specialty associations have information on preparing a request for proposals (RFP) from coding specialists. Some, such as the American College of Cardiology, have published expert consensus documents on the subject that give a general overview of coding and billing practices (JACC, 1999. 33;4: 1076). Others, including the Medical Group Management Association and the American Academy of Family Physicians maintain lists of consultants on their websites (see Coding Resources below).

“Outside experts can divorce themselves from the internal politics of the practice and have no vested interest in maintaining the status quo,” says Nancy Maguire, ACS, AFC, APC, CRT, CTC, CTCH, director of billing and coding compliance at Decision Health. “The outsider also has a specific focus that is hard to obtain in-house as staff usually divide their time over a variety of responsibilities.” All three experts agree that choosing a consultant is very much like choosing an employee. After drafting the RFP, basically the equivalent of a job description, the next step is to find the person or persons who best match the requirements of the job. If a firm is involved, pay special attention to the background of the person or persons who will be working directly with your practice.

Contact all references, not only for the coding firm but also for the specific consultants who will be assigned to work with the practice. Ask about such things as adherence to time and budget agreements. Have there been any conflicts be-tween a practice’s staff and a particular consultant? Were their re-ports easily understood, and did they answer the specific questions posed? Would a given practice use this coding firm and/or specific consultant again if needed?

The credentials of the consultant should also be scrutinized. There are many different kinds of credentials, and they all mean different things. For example, the American Association of Medical Billers (AAMB) offers Certified Medical Biller (CMB) and Certified Medical Billing Specialist (CMBS) examinations. The National Association of Claims Assistant Professionals (NACAP) offers Certified Claims Assistance Professional (CCAP)

and Certified Electronic Claims Professional (CECP) credentials (see Associations sidebar). There may be big differences in the requirements for certification. Some call for completion of a short seminar, and others may have a bachelor’s degree as a prerequisite for sitting for the ex-amination. Ask the consultant which organization issues his or her credentials, and confirm the requirements for certification as well as any continuing education required to maintain it. “Find out how they stay up to date with both governmental and third-party payor issues,” stresses Ms. Reese. “What recent seminars have they attended? Are there any that they have taught? Have they written articles in professional publications?”

The experts all agree that having a consultant that has worked in the practice’s specialty area is an important consideration. “It is generally a good idea to find someone who is familiar with the nuances of the local payors, both federal and private,” notes Ms. Stanfill. “Although not a deal-breaker, this expertise still needs to be factored in.” Using someone close by will also often lower the final cost of the review by saving money on airfare, meals, hotels, and other expenses.

Following the initial screening is the interview. Make sure that the person who will be acting as the main point of contact is included. Ask questions that address whether the consultant has the expertise you are looking for and what they can do for your practice that differentiates them from others. “Use the interview to confirm that the person assigned to your practice is a person you can work with,” says Ms. Maguire. “Also listen closely to see if the person is interviewing you to clarify any questions they might have about what you are asking them do.”

A number of “red flags” should raise concerns about the legitimacy of a consultant that may come up during the interview. Among these are:

• Representations that they are approved, certified or recommended by Medicare, the Center for Medicare and Medicaid Services (CMS), the OIG, or HHS

• Promises or guarantees that the consultants will be able to “recover” a certain amount of money

• Basing their fees on a percentage of money “found”

• Suggesting that their services are required for participation in Medicare

• Discouraging compliance efforts such as voluntary billing reviews

Publications are available from both the OIG and the General Ac-counting Office (GAO) that outline these issues in greater detail. The Special Advisory Bulletin on Practices of Business Consultants is available from CMS. In addition, Health Care Consultants’ Advice to Providers is available from the GOA. Ask for examples of reports previously prepared by prospective consultants, assess how well the consultant communicates the results and the clarity of the recommendations, and pay close attention to how well the recommendations are backed up by specific citations to source material. “If they have suggested that someone do A, B, or C, they should show where in the rules it says this is a good idea,” says Ms. Stanfill.

The next step in the process is to outline the services needed, how they will be provided, how much they will cost, and what are the expected duties of both the practice and the consultant. Include specifics, such as how many cases are to be reviewed in the sample, whether it will include other payors or only Medicare, and whether the study is to be done at the practice or some other location. Spell out what resources the practice will supply, such as a contact person, copying services, and what records and information should be assembled prior to the consultant’s arrival. This step alone could save the practice time and money. Involving an attorney to look over the agreement be-fore signing is also strongly advised. Some experts suggest you engage the services of the consultant through your attorney. This makes the results subject to the attorney— client privilege, which means it cannot be subpoenaed or used in court. Consult with your healthcare law attorney to see if this is something you should consider.

There are three areas that are very important but often overlooked when hiring a consultant. The first is a clear outline of what the consultants’ role is when reporting their recommendations. Are they only to make written suggestions, or do you want them to discuss their findings each physician separately? Will they be sitting down with the coding staff to outline suggested changes in that area? “I suggest that the practice require in-services for physicians and coding/billing staff,” notes Ms. Reese. “This is to make sure that they completely understand the deficiencies and the suggestions to correct them.”

The second concern is what is to be done with the work product. “I am amazed by how many times practices or hospitals do not question what the consultants did with the paper work,” says Ms. Maguire. “You have to put in place procedures that ensure papers and notes are not misappropriated. You have to make sure that all papers removed from the practice are returned. This includes legal and business proprietary information in addition to patient-related materials.”

Finally, discuss liability issues with the consultant and make sure these are included in the written contract. Then check to make sure they have the appropriate insurance should the practice be hit with penalties or interest from relying on the recommendations.

When the review is completed and the suggestions are made, the work is just beginning. One of the first tasks is to carefully examine the suggested solutions, the reasons they were proposed, and the ways in which they are justified. Check for proper citations to rules and regulations in the case of Medicare or to specific paragraphs of contracts with other third-party payors. Then go to the sources and review them to make sure they are actually reflected in the recommendations. The OIG maintains a fraud prevention website with official compliance guidance and appropriate resource materials. CMS has toll-free provider inquiry lines that can often answer questions for providers. This is an especially important piece of the process, since the practice is not relieved of responsibility for the integrity of their coding process by having hired a consultant. It is the practice’s duty to decide for themselves which parts of the advice they are comfortable with.

In many cases, the consultant will identify areas of the process that should be changed. These suggestions may include new computers, programs, or outsourcing all or part of the billing procedure. “The consultant will examine the coding process for lost or enhanced revenue, improper use of codes, underbilling or overbilling, proper documentation of services, and denied or downcoded services,” says Ms. Reese. “I usually follow the flow of the charge from generation to collection. I want the practice to get credit for what they do, but not more than they are entitled to.”

While at first glance it may seem to make sense for the coding specialists reviewing your practice to also implement any necessary changes, Ms. Maguire warns a-gainst the conflicts of interest that can arise from this. If needed, she usually gives her clients a list of four or five vendors from which to choose. “As a consultant, I should not be directly involved in implementation. I am hired to do an analysis, complete a review, and submit my suggestions. If I do get involved in implementation, it should be as a separate project with its own bidding and contract.” It is best to think of coding consultants as guides or enablers. “Consultants give the fishing pole, but not the fish,” says Ms. Maguire. “If they do their work properly, they give the practice the ability to find things for themselves.”

When it comes to hiring a coding consultant, the keys, as with most things, are self- knowledge and preparation. Make sure you understand exactly what a coding review can and cannot provide, thoroughly vet each prospective candidate, hire the one that is the best fit for your practice, and then follow through on the proposals by verifying they are properly cited and sourced. Keep the recommendation and implementation processes separate. Taking the time to do things properly will go a long way toward ensuring a satisfactory outcome, which can translate into increased revenue for your practice.

Coding ResourcesAmerican Academy of Family Physicians

American Academy of Neurology

American Academy of Ophthalmology

American Academy of Orthopaedic Surgeons

Click on Practice Management, for members only

American Urological Association

American Academy of Otolaryngology-Head and Neck SurgeryAmerican Academy of Pediatrics

American Association of Clinical Endocrinologists

(Members only section)

American College of Obstetricians and Gynecologists

American College of Physicians

American College of Rheumatology

The Endocrine Society

A partial listing of associations that are involved in issuing coding-related certifications.

National Healthcareer Association (NHA)

134 Evergreen Place

E. Orange, NJ 07018


American Health Information Management Association (AHIMA)

PO Box 97349

Chicago, IL 60690-7349


American Academy of Procedural Coders (AAPC)

145 West Crystal Ave.

Salt Lake City, UT 84115


American Association of Medical Billers (AAMB)

1840 E. 17th St.

Suite 140

Santa Ana, CA 92701


American Association of Clinical Coders & Auditors.

AACCA National Certification

3233 Grand Avenue #N291

Chino Hills, CA 91709

Phone: 909 590-5307

National Association of Claims Assistance Professionals (NACAP)

5329 S. Main St., Suite 102

Downers Grove, IL 60515-4845


American Association of Healthcare Administration Management

11240 Waples Mill Road

Suite 200

Fairfax, VA 22030


Professional Association of Health Care Office Managers (PAHCOM)

461 E. Ten Mile Road

Pensacola, FL 32534-9714


Medical Group Management Association (MGMA)

104 Inverness Terrace East

Englewood, CO 80012