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Nationally recognized psychiatrist, internist, and addiction medicine specialist Muhamad Aly Rifai discusses his article “Why CPT coding ambiguity harms doctors.” Muhamad analyzes the landmark case of United States v. Ron Elfenbein, where a federal judge acquitted a physician of fraud charges because the underlying CPT rules were “unquestionably ambiguous.” He explains the 2021 changes to Evaluation and Management (E/M) codes and how prosecutors attempted to criminalize reasonable clinical judgment during the COVID-19 pandemic. The conversation explores the damaging practice of insurance downcoding, where payers automatically reduce reimbursements without reviewing charts, effectively stealing physician labor. Muhamad outlines urgent policy reforms needed to distinguish between actual fraud and coding disagreements to protect the integrity of medical practice. Learn how this legal ruling provides a critical shield for doctors navigating a complex and often hostile billing system.

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast. Today we welcome back Muhamad Aly Rifai, psychiatrist, internist, and addiction medicine specialist. Today’s KevinMD article is “Why CPT coding ambiguity harms doctors.” Muhamad, welcome back to the show.

Muhamad Aly Rifai: Thank you very much for having me. I appreciate the opportunity to talk about this timely topic that affects the practice patterns of most physicians around the United States who bill insurance.

Kevin Pho: All right, so what is this latest article about?

Muhamad Aly Rifai: In my article, I talk about the CPT coding. This is the Current Procedural Terminology, which is the billing language that was established by the American Medical Association. They established that in 1966. By the 1990s, the federal government and the Centers for Medicare Services actually established that procedural terminology as the pattern that they would take for Medicare. Then ultimately the private insurers actually also established that. So most of the time physicians who bill Medicare or bill private insurers use the CPT coding guidelines, and they are judged by the CPT coding guidelines.

What happened over the last 20 or 30 years is that there has been a development and a refinement of these codes and procedures. We actually saw that prior to the COVID pandemic, some of these codes actually changed. Basically, they were streamlined. Things were made easier.

This is where the legal case United States v. Dr. Ron Elfenbein comes in. This federal criminal case was actually filed in 2022. It really goes to the heart of basically the Current Procedural Terminology and how physicians use that. It shows how the ambiguity actually can be used by the federal government to indicate that some of the action taken by physicians is a criminal action.

Kevin Pho: I want to underscore how important CPT coding is because it determines how much revenue a medical institution receives and how physicians are paid. Our entire health care system, the financial structure, is essentially based on these CPT codes. Talk about why they are so ambiguous.

Muhamad Aly Rifai: The CPT coding basically has significant several components that look at the documentation that physicians do in their notes. It is called the Evaluation and Management codes, the E/M codes. Most of them are five-number digits. The last digit is usually between a one and a five. A one signifies the lowest possible level code and five signifies the highest level code. Most of the time people when they bill actually will start with a level one or two and then they may escalate to a level four or five.

In the case of Dr. Ron Elfenbein, who actually operated urgent care services during COVID, he evaluated patients during COVID time. He did COVID testing and he assessed them. What ended up happening is there was not a lot of knowledge about what COVID was at that time and what the consequences of COVID were. So he billed level three and four codes. The government said no, you should have billed level one or two. So that is how this legal case started. He actually ended up going to trial and was actually convicted.

Kevin Pho: So tell us more about this case. So eventually what happened to Dr. Elfenbein? Just to recap, he was billing level three-ish codes for COVID testing when the government said that he should have been billing level one and two codes. Is that correct?

Muhamad Aly Rifai: Yes. So the government initially said he shouldn’t have even billed. They said: “Well, he just did testing and there was very little evaluation on these patients.” But these patients had the potential to have COVID and they could have died. There was very little knowledge about the disease process. So the government said levels three, four, and five were fraudulent and they should have been level one or two. It was very, very difficult for the jury to understand that. Basically, they ended up convicting him.

The issue is that the judge looked at the evidence. The judge in the case said this is very ambiguous. There was no way that the jury was able to reach this verdict beyond a reasonable doubt. So in a very rare move, he actually decided to override the jury’s verdict and decided that he actually would be found not guilty.

I feel that this case really signifies how these things are ambiguous. When you put it to a layman’s jury, it is really very difficult. What happened is the federal government actually appealed the case and it went up to the Fourth Circuit of Appeals. The American Medical Association actually put in an amicus brief, basically a “friend of the court” brief, telling the court that they think that is true, that these codes are ambiguous. However, the United States Court of Appeals for the Fourth Circuit decided actually to return the case to trial and ordered a new trial. So he is currently now battling another trial. The United States Supreme Court refused actually to take the case. So we have now a case where the CPT terminology and the CPT coding that is very ambiguous is being used against physicians in a criminal way. Whether a note is level 1, 2, 3, or 4 sometimes has some concrete rules, but a lot of times it is actually very fluid and ambiguous.

Kevin Pho: In the case of Dr. Elfenbein, did he have documentation to back up his coding at level three?

Muhamad Aly Rifai: He did. He did have documentation to back up the coding at level three. These were all patients that had the potential to have COVID, a deadly condition and an unknown condition. That is one of the criteria. If it is a vague unknown disease, you are able to bill at the highest level because you don’t know what is going to happen. Your patient could go to the emergency room or your patient could die, so you are allowed to take the highest level of coding. He actually had coding experts that suggested that. But the jury, the layman’s jury, found this is something that is very ambiguous and very difficult to understand. If we physicians do not understand it, I don’t think that they understand it either.

Kevin Pho: How common is criminalization of coding errors, such as the case we are describing today? Is this an outlier? Does this happen relatively frequently? How common is this?

Muhamad Aly Rifai: We see it frequently and we are seeing it more and more. Basically, the criminalization sometimes is associated with other things. For example, if there is suspicion that a physician is prescribing controlled substances and they want to get him for the controlled substances, they tag on a coding violation. We as physicians, when we practice and we code a note, a coder may have a disagreement on the level. It could be two levels up or two levels above. So it is very hard. It is very ambiguous and we are seeing that the Department of Justice is criminalizing that action.

Kevin Pho: So what can physicians do to protect themselves? You mentioned in the case of Dr. Elfenbein there was appropriate documentation. So other than appropriately documenting, is there anything else physicians can do to protect themselves from finding themselves in that situation?

Muhamad Aly Rifai: I think they need to be very aggressive in terms of self-auditing themselves, so looking at their own notes. Now in the article, I also talk about how we are seeing private insurers actually auto-downcoding the levels of care. So if somebody sees a complex patient and it is a level four or five, the private insurances are saying without looking at the note: “This is not a level four. This is not a level five. We will pay you a level three.”

We are seeing that that is a significant issue that is happening. It is cutting into revenue. It is affecting hospitals and affecting private practices, and it is going to be happening more and more. We have also as physicians, because we have implemented ambient listening and transcribing, been able to capture more of the care that we provide to our patients. So that actually has improved our documentation. The insurance company is not happy with that, so they are auto-downcoding all of our notes now on a regular basis.

Kevin Pho: I have heard about that too. So when that happens, what kind of recourse do physicians have when their notes and visits are auto-downcoded?

Muhamad Aly Rifai: You have to fight like hell. A lot of places, physicians’ practices, and hospitals are taking it at face value. But unless we fight it, it is a violation of the law. It is a violation of the coding guidelines. They do not have the note. How do they know that your note is a level three and not a level four? If they do not have the note, they just look at the disease process or auto-downcode without even looking at the disease process. They just say: “We are only paying a level three.”

Kevin Pho: So what kind of ways can physicians fight this? From the insurer standpoint, I am sure that the appeals process is going to have a lot of red tape. And the fact that it is happening to so many visits means physicians are not going to have the capacity or resources to effectively fight back without cutting into their patient care time.

Muhamad Aly Rifai: I think what is going to happen is that physicians are going to band together and there is going to be a major lawsuit against maybe one or two insurers. The outcome of that probable lawsuit is going to drive what is going to happen and whether that practice is going to stop.

Now we are also seeing that the Centers for Medicare Services is going to start implementing AI and is going to be actually doing the same thing to notes of Medicare providers. But that highlights that these things are disagreements in opinion. They are not criminal acts. So sometimes the government prosecutes those as criminal acts, but they are actually disagreements in opinions about coding for a certain note, and they should be dealt with that way in a civil fashion.

Kevin Pho: So how do we get to this point? My understanding was that when the CPT codes were first unveiled in the 1960s, it wasn’t really meant for billing. Correct me if I am wrong. So how do we get into this mess just from this billing standpoint and how do we fix it? How do we make it less ambiguous?

Muhamad Aly Rifai: It is our professional organization. The American Medical Association actually contracted with the Centers for Medicare Services. So the AMA actually receives revenue from the Centers for Medicare Services and private insurers. For every code that gets billed, they get a percentage. It is very low, probably a part of a cent. But with the number of codes being billed, they get a big chunk of money. So they have no incentive to basically change that. I think it is a step in the right direction that they actually sent an amicus brief saying that these codes could be ambiguous and they should not be used to criminally prosecute physicians.

Kevin Pho: What do you see as a path going forward as it relates to the ambiguities of these codes being used to criminally prosecute physicians? What do you see as potential scenarios going forward?

Muhamad Aly Rifai: I think physicians winning some cases where that gets established is key. I am hoping and rooting for Dr. Elfenbein to be exonerated in his case. Also, if the insurers and Medicare continue with auto-downcoding, organized medicine is going to get together and it is going to fight this. Unless there is court action, I don’t see this stopping.

Kevin Pho: We are talking to Muhamad Aly Rifai, psychiatrist, internist, and addiction medicine specialist. Today’s KevinMD article is “Why CPT coding ambiguity harms doctors.” Muhamad, let’s end with take-home messages that you want to leave with the KevinMD audience.

Muhamad Aly Rifai: Sure. I think physicians should be held to the American Medical Association Current Procedural Terminology, but not to punish physicians for following it in good faith while treating patients. I am hoping that we are going to work on fighting CPT ambiguity and getting physicians the compensation that they are owed in taking care of their patients.

Kevin Pho: Muhamad, thank you so much for sharing your perspective and insight. Thanks again for coming back on the show.

Muhamad Aly Rifai: My pleasure. Thank you.