Determining benchmarks for evaluation and management coding in an academic division of general surgery

BACKGROUND: Academic divisions of general surgery are facing ever-increasing financial pressures. Cost-cutting is a common approach to maintaining profitability, but strategies to increase revenue should not be ignored. One specific avenue for enhanced revenue generation in general surgery is that of coding for evaluation and management (E&M). Although this is the financial lifeblood for many of the consultative services in departments of medicine, E&M coding is an often neglected and misunderstood component of surgical care. STUDY DESIGN: The financial records for the Division of General Surgery were reviewed for the period of January 2001 to June 2003. Specifically, charges and receipts for inpatient procedures and hospital visits (CPT codes 99231, 99232, and 99233) were determined. The analysis was limited to surgeons with a primary clinical focus based at the University hospital rather than the neighboring community or Veteran's Affairs hospitals. In addition, ICD-9 and All Patient Refined Diagnosis Related Groups (APR-DRG) data were analyzed to determine the surgeon-specific number of inpatients and inpatient-days with more than one ICD-9 code or secondary ICD-9 codes, or both, or an APR-DRG severity of illness score of 2, 3, or 4. These categories were defined to determine the number of inpatient-days for which E&M coding could be billed for management of secondary medical diagnoses. RESULTS: Analysis demonstrates that actual E&M charges were 40% to 47% of predicted minimums for E&M charges for the period under study. In theory, this result translates into an annual gain in receipts of $400,000 to $600,000. CONCLUSIONS: We conclude that the ICD-9 and APR-DRG models may serve as benchmarks to determine the limits for E&M revenue stream, and E&M coding may represent an underutilized source of revenue among academic departments of surgery. (C) 2004 by the American College of Surgeons.