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©2010 Coventry Health Care. All rights reserved. Proprietary – Do not copy, distribute or disclose without permission of Coventry Health Care. Provided.

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Presentation on theme: "©2010 Coventry Health Care. All rights reserved. Proprietary – Do not copy, distribute or disclose without permission of Coventry Health Care. Provided."— Presentation transcript:

1 ©2010 Coventry Health Care. All rights reserved. Proprietary – Do not copy, distribute or disclose without permission of Coventry Health Care. Provided by Coventry Health Care ® California Medical Bill Reviewer Re-Certification Unit 1: Workers Compensation Benefit Program Module 8: Medical Coding

2 CA Regulations Training – Correct CodingMarch 2010 Overview Can you imagine the havoc that would result if medical providers all used different coding systems for the same types of services? Part I: The Basics The Importance of Medical Coding Systems In this module, you will learn about different types of codes for diagnosis, treatment, and even drugs and supplies. Part I: The Basics The Importance of Medical Coding Systems Lets start by discussing the importance of medical coding systems...

3 CA Regulations Training – Correct CodingMarch 2010 Benefit 2 Benefit 1 Why are Codes So Important? In order for medical information to be clearly communicated across physicians, medical professionals, bill reviewers, and researchers, standardized coding systems were adopted. Coding system have the following benefits: Allow accurate communication between physicians, patients, medical reviewers, bill processors, and even researchers nationwide. Allow easy identification of specific procedures, services, supplies, and even diagnoses.

4 CA Regulations Training – Correct CodingMarch 2010 Codes, Codes, and More Codes! There are several different medical coding systems. C odes important in medical billing are: Revenue Codes Diagnosis Related Group (DRG) Codes National Drug Codes (NDC) State-specific Codes International Classification of Diseases (ICD-9) Codes Current Procedural Terminology (CPT) Codes Health Care Procedure Coding System (HCPCS) Codes

5 CA Regulations Training – Correct CodingMarch 2010 Diagnosis Codes Before payment for medical services is allowed, the reason the injured worker is being treated, or the diagnosis, must be identified on the bill. Therefore, in order to effectively communicate diagnoses consistently and accurately, physicians use what are known as ICD-9, or diagnosis, codes. Lets take a look…

6 CA Regulations Training – Correct CodingMarch 2010 International Classification of Diseases, 9th Revision International Classification of Diseases (ICD-9) System: identifies almost any potential condition, with a high degree of detail. ICD-9 Code Characteristics: Numeric codes. Three digit codes, with one or two decimal places. Listed in numerical order.

7 CA Regulations Training – Correct CodingMarch 2010 ICD-9 Codes As you can see, the five digit coding system is very specific. This specificity allows the clinician to give an accurate picture of the patients condition with a single code. EXAMPLE 377: Disorders of optic nerve and visual pathways 377.1: Optic atrophy : Post-inflammatory optic atrophy The fifth digit is required. These digits are used to record the information substantiated in the patients records.

8 CA Regulations Training – Correct CodingMarch 2010 ICD-9 Surgical Section The ICD-9 also has a surgical section. Surgical Section Characteristics: Identifies most surgical procedures, not in the detail CPT does, but still quite extensive. Organized similar to other ICD-9 codes. Codes consist of two digits with one or two decimal places. Example 08.0 Incision of Eyelid Incision of Lid Margin.

9 CA Regulations Training – Correct CodingMarch 2010 Supplementary Information The ICD-9 reference also includes supplementary information. E CodesV Codes Lets take a look… Within the supplementary information is a tabular list, which lists disorders by code. In addition to standard codes, the list includes:

10 CA Regulations Training – Correct CodingMarch 2010 Supplementary Information E CodesV Codes Supplementary codes for external causes of injury and poisoning. Supplementary codes for factors influencing health status and contact with health services. E828: Accident involving animal being ridden. E845: Accident involving spacecraft. V11: Personal history of mental disorder. V67: Codes for follow- up examination.

11 CA Regulations Training – Correct CodingMarch 2010 Supplementary Information V codes and E codes CANNOT be primary diagnoses since they provide only supplementary information and not the primary disease or condition of the patient.

12 CA Regulations Training – Correct CodingMarch 2010 CPT Codes Current Procedural Terminology (CPT): a standardized numeric medical coding system maintained and updated annually by the American Medical Association (AMA). Used by physicians and other health care professionals to report and charge for services rendered.

13 CA Regulations Training – Correct CodingMarch 2010 Category I CPT Codes Category I Code Characteristics: Category I Codes: codes used to identify procedures and treatments. Five digit numeric codes. Codes and detailed descriptions uniformly identify: Services Procedures Treatments DO NOT include codes used to separately report medical items or services that are normally billed by non-physicians.

14 CA Regulations Training – Correct CodingMarch 2010 CPT Organization The CPT is divided into six major sections of Category I codes. Each section is then divided into subsections that classify and describe similar services. Evaluation and Management Anesthesia Surgery Radiology Pathology Medicine

15 CA Regulations Training – Correct CodingMarch 2010 Category II CPT Codes Category II Code Characteristics: Category II Codes: codes used to track trends in medical management. Alphanumeric codes. Four numeric digits, followed by an F. 0005F: Osteoarthritis assessed These codes are NOT reimbursable. These codes can only be used for tracking and research.

16 CA Regulations Training – Correct CodingMarch 2010 Category III Codes Category III Code Characteristics: Category III Codes: codes used to identify emerging technology. Alphanumeric codes. Four numeric digits, followed by a T. 0091T: designates a total lumbar disk replacement. Correspond to new procedures that are under evaluation and have not been assigned a permanent code. May be reimbursable. Values are not usually available. Therefore, an RN typically assigns a value based on procedures of similar complexity and time.

17 CA Regulations Training – Correct CodingMarch 2010 HCPCS Codes HCPCS Codes: codes used to identify many supplies and some services not coded in the CPT. HCPCS Characteristics: There are 2,400 HCPCS codes for: Transportation Durable Medical Equipment Supplies Injections Drugs Services Alphanumeric codes. Five digits: a single letter followed by 4 digits. Arranged from A0000- V9999. Listed by subject.

18 CA Regulations Training – Correct CodingMarch 2010 HCPCS Codes Similar to CPT codes, HCPCS codes are organized in major sections. There are some HCPCS that are profession- or specialty-specific, by definition. In general, HCPCS codes listed within a specific section are not restricted in use by a specific profession or specialty group. For example, D codes are used for dental services and supplies. Although unlikely, a non-dental provider could bill from this specific section.

19 CA Regulations Training – Correct CodingMarch 2010 HCPCS Billing and Pricing Information Unlike some CPT codes, HCPCS codes can be billed for multiple units. Pricing for all other codes is entered into the bill review system from Ingenix software, and is updated quarterly. California has state-specific pricing for some HCPCS codes commonly billed on workers compensation bills. Pricing accounts for: Provider Type Average Billed Price Cost Frequency Billed Region

20 CA Regulations Training – Correct CodingMarch 2010 Facility Codes You probably know there are unique sets of codes used specifically for facility bills known as revenue codes and DRG codes. We will begin with revenue codes… Revenue Codes DRG Codes Revenue Codes

21 CA Regulations Training – Correct CodingMarch 2010 Revenue Codes Revenue Codes: codes used to categorize and charge for all hospital related costs. Revenue Code Characteristics: Numeric codes. Three digit numbers. Organized by major sections. Each major section is divided into sub- sections. Costs include: Room and board Operating room Pharmacy Other miscellaneous costs during an inpatient stay

22 CA Regulations Training – Correct CodingMarch 2010 Revenue Codes Revenue codes are organized by subsection. Sub-sections are indicated with a number 1-9 in the 3 rd placeholder. For example, the pharmacy revenue code is 250. The pharmacy sub-sections are: Generic drugs: 251 Non-generic drugs: 252 Take-home drugs: 253

23 CA Regulations Training – Correct CodingMarch 2010 Revenue Code Specificity Some revenue codes are very specific. Other revenue codes are less specific. Revenue Code 367: codes specifically for a kidney transplant because there are so many specific costs associated with that hospital stay. Revenue Code 402: codes for any type of ultrasound because any ultrasound procedure costs the hospital about the same in supplies and labor.

24 CA Regulations Training – Correct CodingMarch 2010 DRG Codes DRG Codes Revenue Codes Now that you are familiar with revenue codes, we will discuss the second type of code used to bill for facility servicesDRG Codes…

25 CA Regulations Training – Correct CodingMarch 2010 DRG Codes Diagnosis Related Group (DRG): a coding system used for billing facility services. DRG Code Characteristics: Contains 559 valid groups that classify patients into similar cost groups. Three digit numerical codes. Related principal diagnoses are listed under the related DRGs.

26 CA Regulations Training – Correct CodingMarch 2010 DRG: Case Mix & Hospital Cost The DRG system was developed to relate the case mix to hospital costs. Case mix is determined by: Severity of illness Prognosis Treatment difficulty Need for intervention Case Mix: the patient pool of a medical facility, reflective of patients need for resources.

27 CA Regulations Training – Correct CodingMarch 2010 So, How Are DRGs Determined? DRGs relate case mix to the resource intensity. Resource Intensity: how many hospital resources are needed to meet that patients needs. DRGs are assigned using the following factors: It is important to know that diagnoses and procedures are designated by ICD-9 codes. Principal diagnosis & up to 8 additional diagnoses Principal procedure & up to 5 additional procedures Age Sex Discharge status Remember, ICD-9 codes can be used to identify both diagnoses AND surgical procedures.

28 CA Regulations Training – Correct CodingMarch 2010 DRG Payment System The primary diagnosis plays a major role in the DRG that is assigned. Therefore, it ultimately determines how much the facility is paid! DRG reimbursement is a set amount, regardless of: Length of stay Amount of supplies Number of staff required to treat a patient

29 CA Regulations Training – Correct CodingMarch 2010 National Drug Code (NDC) NDC: unique code which is a universal product identifier for human drugs. National Drug Code Characteristics: 11-digit codes. All human drugs are recognized and reported using a National Drug Code. NDC pricing is updated routinely and uploaded into the bill review system. Lets also look at drug codes!

30 CA Regulations Training – Correct CodingMarch 2010 National Drug Code (NDC) The Drug Listing Act of 1972 requires registered drug establishments to provide the Food and Drug Administration (FDA) with a current list of all drugs that are commercially distributed. The list may include: Manufactured Drugs Prepared Drugs Propagated Drugs Compounded Drugs Processed Drugs

31 CA Regulations Training – Correct CodingMarch 2010 National Drug Codes How do they work? The unit field indicates the quantity of drug that was dispensed or used. When an NDC code is entered into the bill review system, it pulls up the pricing associated with the drug for the specific dosage. This quantity is then entered into the formula used to calculate the reimbursement for the drug charge.

32 CA Regulations Training – Correct CodingMarch 2010 Summary Diagnosis Codes: What they code for and how they are used. Procedure Codes: The difference between CPT and HCPCS codes. National Drug Codes: What they code and how they are used. The importance of medical coding systems. Facility Codes: The difference between revenue and DRG codes.


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