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Physician Coding I Billing Basics and Procedure Codes E. Douglas Norcross, MD FACS Professor of Surgery Medical University of South Carolina.

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Presentation on theme: "Physician Coding I Billing Basics and Procedure Codes E. Douglas Norcross, MD FACS Professor of Surgery Medical University of South Carolina."— Presentation transcript:

1 Physician Coding I Billing Basics and Procedure Codes E. Douglas Norcross, MD FACS Professor of Surgery Medical University of South Carolina

2 How does the payor know how much to pay me?

3 I set a fee for the service I am going to provide and the patient or payor pays me that charge.

4 Charge Payment (Except in a few circumstances)

5 How much do you get paid for doing something? Practices set a charge up for each service they provide. Practices set a charge up for each service they provide. However, payors establish fee schedules to determine what they will actually pay for a service. However, payors establish fee schedules to determine what they will actually pay for a service. Charges, therefore, apply only to services provided to patients not covered either by an insurer with whom the practice has a contract, or by federal medical insurance plans (Medicare, Medicaid and a few others) Charges, therefore, apply only to services provided to patients not covered either by an insurer with whom the practice has a contract, or by federal medical insurance plans (Medicare, Medicaid and a few others)

6 How much do you get paid for doing something? Practices negotiate and contract with private insurance companies to establish a fee schedule so that the same service is paid the same amount every time they are billed for that service by that payor Practices negotiate and contract with private insurance companies to establish a fee schedule so that the same service is paid the same amount every time they are billed for that service by that payor Medicare and some state Medicaid programs, including South Carolinas, have fixed fee schedules based on a Resource Based Relative Value Scale Medicare and some state Medicaid programs, including South Carolinas, have fixed fee schedules based on a Resource Based Relative Value Scale

7 Resource Based Relative Value Scale (RBRVS) The system used by the Centers for Medicare and Medicaid Services (CMS), a Division of the federal Department of Health and Human Services, to determine reimbursement. The system used by the Centers for Medicare and Medicaid Services (CMS), a Division of the federal Department of Health and Human Services, to determine reimbursement. Every procedure and service is assigned a specific number of Relative Value Units (RVUs) Every procedure and service is assigned a specific number of Relative Value Units (RVUs)

8 Resource Based Relative Value Scale (RBRVS) RVUs based on three separate factors RVUs based on three separate factors Physician work RVUs (W RVUs) account for the time, technical skill and effort, mental effort and judgment, and stress to provide a service (Approximately 52% of average total RVUs for procedure or services) Physician work RVUs (W RVUs) account for the time, technical skill and effort, mental effort and judgment, and stress to provide a service (Approximately 52% of average total RVUs for procedure or services) Practice expense RVUs (PE RVUs) account for the nonphysician clinical and nonclinical labor of the practice, as well as expenses for building space, equipment, and office supplies(Approximately 44% of average total RVUs for procedure or services) Practice expense RVUs (PE RVUs) account for the nonphysician clinical and nonclinical labor of the practice, as well as expenses for building space, equipment, and office supplies(Approximately 44% of average total RVUs for procedure or services) Professional liability insurance RVUs (PLI RVUs)account for the cost of malpractice insurance premiums(Approximately 4% of average total RVUs for procedure or services Professional liability insurance RVUs (PLI RVUs)account for the cost of malpractice insurance premiums(Approximately 4% of average total RVUs for procedure or services

9 Practice Expense RVUs An additional factor For some services and procedures there is a difference in the number of PE RVUs assigned based on whether the procedure or service was done in the hospital (Facility RVUs) or in an office (Non facility RVUs). For some services and procedures there is a difference in the number of PE RVUs assigned based on whether the procedure or service was done in the hospital (Facility RVUs) or in an office (Non facility RVUs). This accounts for the additional expenses incurred when the physician, through their office expenses, must pay the costs of supplies, labor, etc. This accounts for the additional expenses incurred when the physician, through their office expenses, must pay the costs of supplies, labor, etc. Facility RVUs are typically lower then Non facility RVUs Facility RVUs are typically lower then Non facility RVUs CMS determines which to use based on a location code submitted to CMS with the charge CMS determines which to use based on a location code submitted to CMS with the charge

10 Politics There is currently a recommendation that CMS eliminate the distinction between facility and non facility RVUs and just use the facility RVU values There is currently a recommendation that CMS eliminate the distinction between facility and non facility RVUs and just use the facility RVU values This would make the calculation easier, but will decrease physician reimbursement for minor office based procedures This would make the calculation easier, but will decrease physician reimbursement for minor office based procedures Given that this will decrease Medicare expenses, this recommendation is likely to pass! Given that this will decrease Medicare expenses, this recommendation is likely to pass!

11 How do you convert RVUs into payment? Each of the three RVU components is adjusted for region (ie a procedure in New York would receive more reimbursement than the same procedure in Atlanta). Referred to as the Geographic Practice Costs Index. (GPCI) Each of the three RVU components is adjusted for region (ie a procedure in New York would receive more reimbursement than the same procedure in Atlanta). Referred to as the Geographic Practice Costs Index. (GPCI) The adjusted total RVUs are then multiplied by a conversion factor determined by congress annually (Dollars per total adjusted RVU) to arrive at reimbursement level. The adjusted total RVUs are then multiplied by a conversion factor determined by congress annually (Dollars per total adjusted RVU) to arrive at reimbursement level.

12 The formula! {(W RVU x W GPCI) + (PE RVU x PE GPCI) + (PLI RVU x PLI GPCI)} x Conversion factor = Payment

13 An example You do a laparoscopic Cholecystectomy at MUSC in 2011 on a patient with Medicare 2011 Conversion factor = 2011 Conversion factor = $ For South Carolina W GPCI0.976 PE GPCI0.937 PLI GPCI0.482 For Laparoscopic Cholecystectomy W RVUs11.76 Non facility PE RVUs8.05 PLI RVUs2.48

14 An example W RVUs x W GPCI11.76 x PE RVUs x PE GPCI8.05 x PLI RVUs x PLI GPCI2.48 x Total Adjusted RVUs20.78 Total Adjusted RVUs x Conversion FactorX Payment$706.03

15 The Medicare Fee Schedule The formula just discussed is then used to develop a fee schedule which represents the maximum Medicare reimbursement for each CPT code The formula just discussed is then used to develop a fee schedule which represents the maximum Medicare reimbursement for each CPT code Each geographic region has its own fee schedule based on the Geographic Practice Costs Index for that particular region. Each geographic region has its own fee schedule based on the Geographic Practice Costs Index for that particular region. So, basically, you are paid what the Medicare Fee Schedule says you are to be paid. So, basically, you are paid what the Medicare Fee Schedule says you are to be paid.

16 The Medicare Fee Schedule The conversion factor is adjusted annually as part of federal budget negotiations in order to balance predicted Medicare charge submissions for the year with the funding appropriated to meet those costs. The conversion factor is adjusted annually as part of federal budget negotiations in order to balance predicted Medicare charge submissions for the year with the funding appropriated to meet those costs. For example, if Medicare charges are expected to remain stable for the budget cycle, but spending limits are lowered, the conversion factor is lowered so that the predicted total Medicare payout stays within the budgeted amount. For example, if Medicare charges are expected to remain stable for the budget cycle, but spending limits are lowered, the conversion factor is lowered so that the predicted total Medicare payout stays within the budgeted amount. This formula, and its annual adjustment, explains the annual battle between congress and medical organizations over the conversion factor This formula, and its annual adjustment, explains the annual battle between congress and medical organizations over the conversion factor

17 Remember, this applies to Medicare. The situation differs with other payors Medicaid Medicaid Each state has its own methodology Each state has its own methodology South Carolina uses a percentage of the Medicare Fee Schedule to determine Medicaid reimbursement each CPT code South Carolina uses a percentage of the Medicare Fee Schedule to determine Medicaid reimbursement each CPT code Private Insurers Private Insurers Each practice within an insurers network of providers negotiates with the insurer to determine payment for each CPT code Each practice within an insurers network of providers negotiates with the insurer to determine payment for each CPT code Some use a multiple of the Medicare Fee Schedule Some use a multiple of the Medicare Fee Schedule Some use a percentage of their charges Some use a percentage of their charges Some might negotiate a fee for each specific code Some might negotiate a fee for each specific code

18 How do we standardize terminology so that payors know how much to pay us? CPT Codes

19 What are CPT codes? Essentially all physician billing is based on numeric codes contained in the document Current Procedural Terminology published by the American Medical Association (Thus the term CPT Codes)

20 What are CPT Codes? A listing of 5 digit numeric codes with descriptive terms for each code. A listing of 5 digit numeric codes with descriptive terms for each code. Codes are used for reporting medical services performed by physicians. Codes are used for reporting medical services performed by physicians. Intended to provide a uniform language to describe physician services Intended to provide a uniform language to describe physician services

21 Types of CPT Codes Procedure codes Procedure codes Evaluation and Management Codes (E & M codes) Evaluation and Management Codes (E & M codes)

22 CPT Codes Evaluation and Management Codes (E & M codes) are those used to describe patent encounters Evaluation and Management Codes (E & M codes) are those used to describe patent encounters Procedure codes are descriptors of specific procedures and activities Procedure codes are descriptors of specific procedures and activities Surgical Procedures/Bedside Procedures Surgical Procedures/Bedside Procedures Management of specific medical conditions (Ex. Dialysis) Management of specific medical conditions (Ex. Dialysis) Various medical diagnostic and therapeutic procedures Various medical diagnostic and therapeutic procedures Radiology procedure supervision and interpretation Radiology procedure supervision and interpretation Services involving administration of anesthesia Services involving administration of anesthesia Laboratory services provided by a physician (Including physician supervision of services performed by technologists) Laboratory services provided by a physician (Including physician supervision of services performed by technologists)

23 CPT Codes CPT codesCategory Evaluation and Management Anesthesiology , Surgery Radiology Pathology and Laboratory Services Medicine ,

24 Procedure Codes Fairly straightforward to use Fairly straightforward to use Simply select the code for the procedure performed. Simply select the code for the procedure performed.

25 Global Fee Period Many procedural codes, including nearly all significant surgical procedures, are associated with a global fee period (usually 90 days for major operative procedures). Many procedural codes, including nearly all significant surgical procedures, are associated with a global fee period (usually 90 days for major operative procedures). For procedures with a global fee period, the fee paid for the procedure includes the routine pre and post-operative care associated with that procedure For procedures with a global fee period, the fee paid for the procedure includes the routine pre and post-operative care associated with that procedure

26 Global fee period During the global period E and M codes will not be paid if the service provided was: During the global period E and M codes will not be paid if the service provided was: Part of the routine post operative care of the patient Part of the routine post operative care of the patient A preoperative visit within 24 hours of surgery UNLESS the decision to perform surgery was made during that visit. A preoperative visit within 24 hours of surgery UNLESS the decision to perform surgery was made during that visit.

27 For most surgeons, procedure codes provide the bulk of physician reimbursement.

28 Rules for procedure codes Can not bill for routine post operative care. It is included in the global fee period Can not bill for routine post operative care. It is included in the global fee period Preoperative care within the 24 hours of surgery can not be billed. It is included in the global fee period. (Exception is if the decision to go to surgery occurs during that 24 hour period…. More on that in the next presentation, Physician Coding II) Preoperative care within the 24 hours of surgery can not be billed. It is included in the global fee period. (Exception is if the decision to go to surgery occurs during that 24 hour period…. More on that in the next presentation, Physician Coding II) Code assumes a single billing physician for each procedure Code assumes a single billing physician for each procedure Code assumes typical difficulty for that procedure Code assumes typical difficulty for that procedure

29 Rules for procedure codes Code assumes a single procedure is performed per billing episode Code assumes a single procedure is performed per billing episode The code assumes the physician provided the routine pre and post op care. The code assumes the physician provided the routine pre and post op care. The code assumes a unilateral procedure The code assumes a unilateral procedure The code assumes that a procedure was not done during the global fee period for another procedure The code assumes that a procedure was not done during the global fee period for another procedure

30 So what do I do if I perform two procedures during one trip to the operating room?

31 Modifiers!

32 What are modifiers? Payment systems know the rules for payment and will not allow a payment to be made if one of those rules is violated Payment systems know the rules for payment and will not allow a payment to be made if one of those rules is violated There are times, however, when exceptions to the usual rules can be applied There are times, however, when exceptions to the usual rules can be applied Computers look for modifiers to identify when one of those exceptions applies. Computers look for modifiers to identify when one of those exceptions applies. Failure to use the appropriate modifier will cause a failure to receive payment Failure to use the appropriate modifier will cause a failure to receive payment

33 Commonly used modifiers applied to procedure codes by surgeons 22 Modifier: Increased Procedural Services 22 Modifier: Increased Procedural Services 50 Modifier: Bilateral procedure 50 Modifier: Bilateral procedure 51 Modifier: Multiple procedures 51 Modifier: Multiple procedures 52 Modifier: Reduced services 52 Modifier: Reduced services 53 Modifier: Discontinued procedure 53 Modifier: Discontinued procedure 54 Modifier: Surgical Care only 54 Modifier: Surgical Care only 58 Modifier: Staged or related procedure or service by the same physician during the postoperative period 58 Modifier: Staged or related procedure or service by the same physician during the postoperative period

34 Commonly used modifiers applied to procedure codes by surgeons 59 Modifier: Distinct procedural service 59 Modifier: Distinct procedural service 62 Modifier: Two surgeons 62 Modifier: Two surgeons 66 Modifier: Surgical Team 66 Modifier: Surgical Team 76 Modifier: Repeat procedure or service by the same physician 76 Modifier: Repeat procedure or service by the same physician 77 Modifier: Repeat procedure by another physician 77 Modifier: Repeat procedure by another physician 78 Modifier: Unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period 78 Modifier: Unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period 79 Modifier: Unrelated procedure or service by the same physician during the postoperative period 79 Modifier: Unrelated procedure or service by the same physician during the postoperative period

35 Lets do a few procedural coding examples

36 You do a routine laparoscopic cholecystectomy on a 25 year old female. There are no intraoperative complications

37 Look up the procedure in the CPT manual

38 Reading the CPT manual CPT Code Total Facility RVUs Total Non Facility RVUs Global Fee Period Icons for other stuff spelled out in CPT manual introduction

39 So we code this as 47562

40 But what if the patient develops an arrhythmia during the procedure and we abandon the case before completing it?

41 We need to use a modifier! 22 Modifier: Increased Procedural Services 22 Modifier: Increased Procedural Services 50 Modifier: Bilateral procedure 50 Modifier: Bilateral procedure 51 Modifier: Multiple procedures 51 Modifier: Multiple procedures 52 Modifier: Reduced services 52 Modifier: Reduced services 53 Modifier: Discontinued procedure 53 Modifier: Discontinued procedure 54 Modifier: Surgical Care only 54 Modifier: Surgical Care only 58 Modifier: Staged or related procedure or service by the same physician during the postoperative period 58 Modifier: Staged or related procedure or service by the same physician during the postoperative period 59 Modifier: Distinct procedural service 59 Modifier: Distinct procedural service 62 Modifier: Two surgeons 62 Modifier: Two surgeons 66 Modifier: Surgical Team 66 Modifier: Surgical Team 76 Modifier: Repeat procedure or service by the same physician 76 Modifier: Repeat procedure or service by the same physician 77 Modifier: Repeat procedure by another physician 77 Modifier: Repeat procedure by another physician 78 Modifier: Unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period 78 Modifier: Unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period 79 Modifier: Unrelated procedure or service by the same physician during the postoperative period 79 Modifier: Unrelated procedure or service by the same physician during the postoperative period

42 So we code this as

43 You perform a left hemicolectomy and open cholecystectomy during the same procedure. How do you code this?

44 Colectomy CPT CodeOpen Cholecystectomy CPT Code Colectomy Facility RVUsOpen Cholecystectomy Facility RVUs

45 So we have two codes CodeDescriptionFacility RVUs 44140Colectomy, partial; with anastamosis Cholecystectomy31.54 How do we tell the payor what to pay us?

46 FACT to know! In general, payors will not pay for two procedures performed at the same time through the same incision. They reason that the amount of work required for the additional procedure(s) is less because there is no need for additional incisions, additonal post op care, etc.

47 FACT to know! However, payors recognize that additional procedures are often indicated and need to be compensated. So they will pay for additional procedures, but at a discounted rate for those procedures

48 Fact to know So we need to add a modifier to one of the procedures explaining that it is an additional procedure performed along with the other procedure so that we will be paid for it, albeit, at a lower rate than for that procedure performed alone (generally 50% discount).

49 There is a modifier for that! 22 Modifier: Increased Procedural Services 22 Modifier: Increased Procedural Services 50 Modifier: Bilateral procedure 50 Modifier: Bilateral procedure 51 Modifier: Multiple procedures 51 Modifier: Multiple procedures 52 Modifier: Reduced services 52 Modifier: Reduced services 53 Modifier: Discontinued procedure 53 Modifier: Discontinued procedure 54 Modifier: Surgical Care only 54 Modifier: Surgical Care only 58 Modifier: Staged or related procedure or service by the same physician during the postoperative period 58 Modifier: Staged or related procedure or service by the same physician during the postoperative period 59 Modifier: Distinct procedural service 59 Modifier: Distinct procedural service 62 Modifier: Two surgeons 62 Modifier: Two surgeons 66 Modifier: Surgical Team 66 Modifier: Surgical Team 76 Modifier: Repeat procedure or service by the same physician 76 Modifier: Repeat procedure or service by the same physician 77 Modifier: Repeat procedure by another physician 77 Modifier: Repeat procedure by another physician 78 Modifier: Unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period 78 Modifier: Unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period 79 Modifier: Unrelated procedure or service by the same physician during the postoperative period 79 Modifier: Unrelated procedure or service by the same physician during the postoperative period

50 But which code gets the modifier applied to it? The primary procedure does not get a modifier The primary procedure does not get a modifier All secondary procedures get a 51 modifier applied. All secondary procedures get a 51 modifier applied. In general, but not always, the procedure with the highest number of RVUs is the primary procedure. In general, but not always, the procedure with the highest number of RVUs is the primary procedure.

51 So for our example CodeDescriptionFacility RVUs 44140Colectomy, partial; with anastamosis Cholecystectomy31.54 The right hemicolectomy is the primary procedure (the thing we went to the OR to do) and the cholecystectomy is the additional procedure. So the billing codes look like this

52 The codes apply to typical procedures including the routine pre and post op care. What if the case is not typical? What if the case is more complicated or took significantly more time than usual. For example, a patient with dense adhesions that took hours to take down? What if the case is more complicated or took significantly more time than usual. For example, a patient with dense adhesions that took hours to take down? Modifier 22 Modifier 22 You do the case, but dont provide the pre or post op care. You do the case, but dont provide the pre or post op care. Modifier 54 Modifier 54 The case does not require all of the usual steps because part of it was previously performed. The case does not require all of the usual steps because part of it was previously performed. Modifier 53 Modifier 53

53 There are modifiers to cover just about every unusual situation one might encounter.

54 Are there special rules for teaching hospitals?

55 Of course there are! This is the government after all!

56 Rules for Teaching Physicians General Concepts Services furnished in teaching settings are paid under the Medicare Physician Fee Schedule (MPFS) if the services are: Personally furnished by a physician who is not a resident or Personally furnished by a physician who is not a resident or Furnished by a resident when a teaching physician is physically present during the critical or key portions of the service Furnished by a resident when a teaching physician is physically present during the critical or key portions of the service

57 Rules for Teaching Physicians Documentation Requirements Documentation may be dictated, handwritten, or computer-generated, and must be dated and include a legible signature. In addition, the documentation must identify, at a minimum: The service furnished The service furnished The participation of the teaching physician in providing the service The participation of the teaching physician in providing the service Whether the teaching physician was physically present Whether the teaching physician was physically present

58 Rules for Teaching Physicians Surgical Procedures In order to bill for surgical, high-risk, or other complex procedures, the teaching physician must be present during all critical and key portions of the procedure and be immediately available to furnish services during the entire procedure.

59 Rules for Teaching Physicians Surgical Procedures The teaching physician may determine what constitute the critical or key portions of a procedure The teaching physician may determine what constitute the critical or key portions of a procedure The teaching physicians presence is not required during the opening and closing of the surgical field unless these activities are considered to be critical or key portions of the procedure. The teaching physicians presence is not required during the opening and closing of the surgical field unless these activities are considered to be critical or key portions of the procedure. If the teaching physician is not present for the entire procedure, the teaching physician should document what they consider the key portions of the procedure and their presence during those portions of the procedure. If the teaching physician is not present for the entire procedure, the teaching physician should document what they consider the key portions of the procedure and their presence during those portions of the procedure.

60 Rules for Teaching Physicians Surgical Procedures During non-critical or non-key portions of the surgery, if the teaching surgeon is not physically present, he or she must be immediately available to return to the procedure, i.e., he or she cannot be performing another procedure. During non-critical or non-key portions of the surgery, if the teaching surgeon is not physically present, he or she must be immediately available to return to the procedure, i.e., he or she cannot be performing another procedure. If circumstances prevent a teaching physician from being immediately available, then he/she must arrange for another qualified surgeon to be immediately available to assist with the procedure, if needed. If circumstances prevent a teaching physician from being immediately available, then he/she must arrange for another qualified surgeon to be immediately available to assist with the procedure, if needed.

61 Rules for Teaching Physicians Endoscopy To bill Medicare for endoscopic procedures (excluding endoscopic surgery that follows the surgery policy in subsection a), the teaching physician must be present during the entire viewing. The entire viewing starts at the time of insertion of the endoscope and ends at the time of removal of the endoscope.

62 Rules for Teaching Physicians Minor Procedures For procedures that take only a few minutes (5 minutes or less) to complete and involve relatively little decision making once the need for the procedure is determined, the teaching surgeon must be present for the entire procedure in order to bill for the procedure.

63 Medicare and Medicaid Comparison Minor Procedures Medicare defines presence as being in the same room, or partitioned portion of a room, as the patient on whom the minor procedure is being performed. Medicare defines presence as being in the same room, or partitioned portion of a room, as the patient on whom the minor procedure is being performed. South Carolina Medicaid defines presence as being on the same premises as the patient upon whom the procedure is being performed and being immediately available to assist with that procedure. South Carolina Medicaid defines presence as being on the same premises as the patient upon whom the procedure is being performed and being immediately available to assist with that procedure.

64 Medicaid Minor Procedure Billing MUSC policy MUSC has defined the premises as any building physically connected to the building in which the procedure is performed. MUSC has defined the premises as any building physically connected to the building in which the procedure is performed. For MUH this includes the hospital, Library building, Rutledge Tower, Hollings Cancer Center, and the Basic Science Building For MUH this includes the hospital, Library building, Rutledge Tower, Hollings Cancer Center, and the Basic Science Building For ART, the billing physician must be within the ART building For ART, the billing physician must be within the ART building This applies only to Medicaid patients. For Medicare patients the requirement for presence in the room remains. This applies only to Medicaid patients. For Medicare patients the requirement for presence in the room remains.

65 What about private insurers? Variable rules with each provider Variable rules with each provider Safest approach is to use Medicare/Medicaid guidelines. Safest approach is to use Medicare/Medicaid guidelines.

66 Summary Physicians are paid for their services using different methods depending upon the payor Physicians are paid for their services using different methods depending upon the payor Medicare and Medicaid use the RBRVS methodology to determine payment for services rendered by physicians Medicare and Medicaid use the RBRVS methodology to determine payment for services rendered by physicians CPT codes are used to describe services provided by physicians to patients CPT codes are used to describe services provided by physicians to patients Modifiers are used to describe atypical situations where the usual billing rules do not apply Modifiers are used to describe atypical situations where the usual billing rules do not apply There are specific supervision requirements for teaching physicians for services that will be billed to Medicare or Medicaid. There are specific supervision requirements for teaching physicians for services that will be billed to Medicare or Medicaid.


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