Integrated National Board Dental Examination (INBDE)

Correct: Unbundling or fragmentation occurs when a single procedure is broken down into its component parts and billed as multiple services, or when incidental services that are considered integral to the primary procedure are billed separately. In this scenario, a minor incidental hernia repair performed during a more complex abdominal surgery is generally considered part of the global surgical package and not separately reimbursable. Professional auditing standards require identifying these instances to prevent overpayment and ensure compliance with NCCI (National Correct Coding Initiative) edits and CPT guidelines.

Incorrect: The approach of validating separate billing based solely on documentation of work ignores the CPT and NCCI rules regarding integral components and incidental procedures. Recommending modifier 51 for an incidental service is incorrect because modifiers should not be used to bypass bundling rules for services that are not distinct or significant. Classifying the exploration of the common bile duct based on the surgeon’s identity is a misunderstanding of bundling; the exploration is often a component of the more comprehensive code (47564 actually includes the cholecystectomy), and the issue here is the fragmentation of the incidental hernia repair.

Takeaway: Auditors must distinguish between distinct procedural services and incidental components to prevent fragmentation and ensure adherence to the National Correct Coding Initiative (NCCI) guidelines.

Correct: Risk assessment in medical auditing involves identifying areas of high vulnerability or potential non-compliance. Utilizing data analytics to compare a provider’s billing patterns (such as the distribution of Evaluation and Management codes) against peer benchmarks is a primary method for identifying outliers. These outliers represent a higher risk of upcoding or billing for services not rendered, allowing the auditor to focus resources on the most significant areas of concern.

Incorrect: Random sampling is a technique used for baseline audits to determine a general error rate but is not the most effective tool for targeted risk assessment. Focusing solely on the individual complaint is a reactive measure that fails to address the systemic risk across the provider’s entire practice. While interviewing billing staff is a component of evaluating internal controls, it does not provide the quantitative data necessary to identify specific coding risks or billing anomalies.

Takeaway: Effective risk assessment in medical auditing utilizes benchmarking and data mining to identify statistical outliers in billing patterns, enabling a targeted and efficient audit focus.

Correct: According to the ICD-10-CM Official Guidelines for Coding and Reporting (Section IV.H), for outpatient encounters, auditors and coders should not code diagnoses documented as ‘probable,’ ‘suspected,’ ‘questionable,’ ‘rule out,’ or ‘working diagnosis.’ Instead, the code should reflect the highest degree of certainty for that encounter, which typically involves coding the signs, symptoms, or abnormal test results that prompted the visit.

Incorrect: The approach of coding uncertain diagnoses as confirmed is only permitted in the inpatient hospital setting (Section II.H) and would be a compliance error in an outpatient audit. There is no standard ICD-10-CM modifier used to denote an uncertain diagnosis for reimbursement. Using an unspecified code is also incorrect because the guidelines specifically direct the auditor to code the symptoms or signs rather than an unspecified version of the suspected condition.

Takeaway: In outpatient medical auditing, uncertain diagnoses must be coded to the highest level of certainty (symptoms/signs) rather than as confirmed conditions.

Correct: Under the Physician Fee Schedule (PFS), when a radiology service is performed in a facility setting (such as a hospital outpatient department), the service is split into a professional component (PC) and a technical component (TC). The physician, who provides the interpretation and report, must append modifier 26 to the CPT code to receive payment for the PC. The facility bills for the TC (equipment, supplies, and technical staff) on an institutional claim. Billing globally (without a modifier) in a facility setting results in an overpayment because it includes the technical component which the physician did not provide.

Incorrect: Modifier TC is used to report the technical component only; it would be inappropriate for the physician group to use this as they do not own the equipment. Billing globally and manually reducing the fee is not a valid coding practice and does not satisfy CMS billing requirements for split-component services. The facility should not use modifier 26, as that modifier is specifically designated for the professional interpretation provided by the physician, not the technical services provided by the institution.

Takeaway: In a facility-based imaging scenario, the physician must use modifier 26 to report only the professional component of the service to avoid duplicate billing of the technical component.

Correct: The 8-minute rule (CMS) requires that for any single CPT code to be billed for one unit, at least 8 minutes of that service must be provided. When multiple timed codes are billed in a single session, the total number of units is determined by the total cumulative time. Reconciling individual code times against the total session time is the only way to ensure the units billed are mathematically and regulatorily supported. For a 45-minute session, the maximum number of units allowed is typically three (38-52 minutes), so billing four units (which requires at least 53 minutes) would be an overpayment error.

Incorrect: A signed plan of care is a requirement for reimbursement but does not prove the duration of a specific session or compliance with the 8-minute rule. Modifiers (GP, GO, GN) identify the type of therapy (PT, OT, or SLP) but do not validate the quantity of units billed or the time spent. Chargemaster reviews ensure pricing accuracy and alignment with fee schedules but do not address the clinical documentation of time, which is the core issue in 8-minute rule compliance and unit validation.

Takeaway: Internal auditors must verify that the sum of timed units billed aligns with the total treatment time according to the 8-minute rule to prevent overbilling in therapy services.

Correct: According to the ICD-10-CM Official Guidelines for Coding and Reporting, Section II.C, in those rare instances where two or more diagnoses equally meet the definition for principal diagnosis, any one of the diagnoses may be sequenced first. This applies when the circumstances of the admission, the therapy provided, and the Tabular List or Alphabetic Index do not provide specific sequencing instructions. Therefore, selecting the diagnosis that results in a higher-weighted MS-DRG is not inherently a violation of coding guidelines if both conditions truly met the definition of principal diagnosis.

Incorrect: The requirement to sequence based on resource consumption or length of stay is a common misconception; while these factors often correlate with the principal diagnosis, they are not the regulatory standard for sequencing when multiple conditions meet the definition. Defaulting to the first diagnosis listed in the H&P is incorrect because the principal diagnosis is defined as the condition established ‘after study’ to be chiefly responsible for the admission, which may differ from the initial impression. Sequencing the lower-weighted diagnosis to avoid the appearance of upcoding is not a requirement of the official guidelines and would result in inaccurate data reporting.

Takeaway: When multiple diagnoses equally meet the criteria for principal diagnosis, official ICD-10-CM guidelines allow any of them to be sequenced first, regardless of the resulting MS-DRG weight.

Correct: For a professional component (modifier 26) or a global radiology service to be appropriately billed and reimbursed, documentation must include a separate, written, and signed interpretive report. This report must contain the findings, an impression, and the signature of the interpreting physician. A simple notation in a progress note that images were ‘reviewed’ does not meet the CPT or CMS standards for a formal radiology interpretation, making the professional component non-reimbursable.

Incorrect: Accepting a brief progress note notation is incorrect because it lacks the formal structure and detail required for a diagnostic radiology report. Appending modifier 52 is inappropriate because a missing report is a documentation compliance failure, not a planned reduction in the scope of the procedure. Re-billing for the technical component only does not address the fact that the professional component was already paid and must be returned due to lack of documentation; furthermore, the audit finding specifically concerns the professional component’s validity.

Takeaway: A formal, signed interpretive report is a mandatory documentation requirement for billing the professional component of any radiology or imaging service.

Correct: According to CPT guidelines and the CMS Claims Processing Manual, an E/M service and a preventive medicine service can be billed on the same day only if the E/M service is significant and separately identifiable. If the problem addressed is minor or stable and does not require significant additional work beyond the preventive service, the E/M code should not be reported. In this scenario, the documentation showed the chronic conditions were stable and did not require additional work, making the separate E/M charge inappropriate.

Incorrect: Appending Modifier 25 based solely on the presence of a secondary diagnosis is incorrect; the documentation must support that the service was significant and separately identifiable. Replacing the preventive code with a problem-oriented E/M code is incorrect because they are distinct services with different intents and documentation requirements. Using a chronic condition as the primary diagnosis for a preventive service is a coding error, as preventive services require specific ICD-10-CM codes (Z-codes) to be sequenced first.

Takeaway: A separate E/M service is only reportable during a preventive visit if the management of a condition requires significant additional work beyond the standard preventive components.

Correct: According to CPT guidelines, a new patient is one who has not received any professional services from the physician or another physician of the exact same specialty and subspecialty who belongs to the same group practice within the past three years. Since the patients were seen by a physician of the same specialty in the same group 14 months ago, they meet the criteria for established patients.

Incorrect: Classifying patients as new based on a new clinical condition or the fact that the specific individual provider has not seen them before is incorrect because the CPT definition specifically includes other physicians of the same specialty within the same group practice. The accessibility of electronic health records is a matter of administrative efficiency but is not the defining criteria for determining new versus established status under CPT rules.

Takeaway: A patient is established if they have received professional services from any physician of the same specialty and subspecialty in the same group practice within the last three years.

Correct: The primary responsibility of a medical auditor is to ensure that the documentation supports the medical necessity of the services provided. This is achieved by validating that the ICD-10-CM (diagnostic) codes provide a clear clinical reason for the CPT/HCPCS (procedural) codes billed. Without this alignment, claims may be denied or flagged for recoupment during a regulatory audit.

Incorrect: Selecting codes based on reimbursement rates rather than clinical documentation is considered upcoding and is a fraudulent practice. Sequencing diagnostic codes alphabetically is incorrect; they must be sequenced by clinical importance (primary vs. secondary). Both CPT and ICD-10-CM coding systems are updated annually, and both are critical components for determining reimbursement in systems like OPPS and the Physician Fee Schedule.

Takeaway: Medical auditors must verify that diagnostic codes clinically justify the procedures billed to satisfy medical necessity requirements and ensure regulatory compliance.