16 Medical Coding

Learning Outcomes 16.1 Explain the purpose and format of the ICD-9- CM volumes that are used by medical offices. 16.2 Describe how to analyze diagnoses and locate correct codes using the ICD-9-CM. 16.3 Identify the purpose and format of the CPT. 16.4 Name three key factors that determine the level of Evaluation and Management codes that are selected.

Learning Outcomes (cont.) 16.5 Identify the two types of codes in the Health Care Common Procedure Coding System (HCPCS). 16.6 Describe the process used to locate correct procedure codes using CPT. 16.7 Explain how medical coding affects the payment process. 16.8 Define fraud and provide examples of fraudulent billing and coding.

Introduction Medical coding Translation of medical terms for diagnoses and procedures into code numbers from standardized code sets Tells payers that the services provided Were medically necessary Complied with payer’s rules Accurate claims bring maximum appropriate reimbursement for the medical office

Diagnosis Codes: The ICD-9-CM The Diagnosis Process Patient Chief Complaint Physician Medical Diagnosis Insurance Diagnosis Code The diagnosis codes are found in the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9) The use of ICD-9 codes in health care is mandated by HIPAA for reporting:  Patient’s diseases  Conditions  Signs and symptoms

The ICD-9-CM Alphabetic Index (Volume 2) Diagnoses appear in alphabetical order The index is organized by condition Use initially to look up conditions Cross-references Look up term that follows “see” The Alphabetical Index is never used alone to find a diagnosis code because it does not contain all the necessary information.

The ICD-9-CM (cont.) Tabular List (Volume 1) Diagnoses appear in numerical order Listing is organized according to source or body system Code Structure Codes are made up of three, four, and five digits and a description Three-digit categories are used for diseases, injuries, and symptoms Categories are further divided into four- and five-digit codes

The ICD-9-CM (cont.) Supplementary classification of factors influencing health status and contact with health services Identify encounters for reasons other than illness or injury May be a primary code or additional code V Codes E Codes “E” – external Identify external causes of injuries and poisoning resulting from environmental events Never used alone as a diagnostic code

ICD-9-CM Conventions Conventions [ ] NOS NEC ( ) A list of abbreviations, punctuation, symbols, typefaces, and notes that provide guidelines for using the code set. Conventions Brackets are used around synonyms, alternate wording, or explanations [ ] An abbreviation that means “not otherwise specified” or “unspecified” NOS An abbreviation that means “not elsewhere classified”; used when the ICD-9 does not provide a specific code to describe the patient’s condition NEC ( ) Parentheses are used around alternative wording

ICD-9-CM Conventions (cont.) § Indicates that the footnote is applicable to all subdivisions in that code } Brace encloses a series of terms : Used in the Tabular List after an incomplete term Excludes Indicates that the entry is not classified as part of the preceding code Includes Refines content of preceding entry

ICD-9-CM Conventions (cont.) Use additional code This note means an additional code should be used if available Excludes These notes indicate that an entry is not classified as part of the preceding code Code first underlying disease This means that the code is not to be used for the primary diagnosis

The ICD-9-CM Codes (cont.) Record the code on the claim form  Steps to Locating an ICD-9-CM Code Read all information to find the code that corresponds to the patient’s condition  Locate the code from the Alphabetic Index in the Tabular List  Find the diagnosis in the Alphabetic Index  Locate the patient’s diagnosis 

The ICD-10-CM/ICD-10-PCS Revisions to ICD-9-CM Features ICD-10-CM – over 68,000 diagnostic codes ICD-10-PCS – 87,000 procedure codes Features Combination codes Codes for laterality Expanded codes capture more detail Flexibility and expandability

Apply Your Knowledge Good Answer! A medical assistant has looked up a medical term in the alphabetic index, and next to the term is the word “see.” What does this mean? ANSWER: This means the medical assistant must look up the term that follows the word “see” because another category should be used or cross-referenced. Good Answer!

Procedure Codes: The CPT Current Procedural Terminology (CPT) book The most commonly used system for reporting procedures and services provided to the patient This is the HIPAA-required code set Published annually by the American Medical Association (AMA) Updated annually Use the appropriate CPT book for the current year

Organization of the CPT Manual Except for the first section, the CPT book is arranged in numerical order Section Range of Codes Evaluation and Management 99201–99499 Anesthesiology 00100–01999 Surgery 10021–69990 Radiology 70010–79999 Pathology and Laboratory 80048–89356 Medicine 90281–99602

Organization of the CPT Manual (cont.) Add-on codes A plus sign (+) is used to indicate add-on codes Always used with primary code Modifiers One or more two-digit numbers (up to three per procedure) assigned to five-digit main number Indicate that special circumstance applies

Organization of the CPT Manual (cont.) Category II, III, and Unlisted procedure codes Category II – tracks health-care performance measures Category III – temporary codes for emerging technologies, services, and procedures Unlisted codes – used when no other code is available

Evaluation and Management (E/M) Codes Used by all physicians in any medical specialty Key factors that help determine level of service The extent of the patient history taken The extent of the examination conducted The complexity of the medical decision made New Patient versus Established Patient New patients – not seen by physician within the past 3 years Established patients – seen within a 3-year period

Surgical Procedure Codes The surgical package All procedures normally a part of an operation Anesthesia Surgery Routine follow-up care Global period The time period covered for follow-up care If past global period, additional services are reported separately

The CPT (cont.) Laboratory Procedures Immunizations Panels – organ or disease-oriented Pathology and Laboratory sections of the CPT If separate codes are used, they will be rebundled and payment delayed Immunizations Injections require two codes One for the procedure (injection) One for the medication (vaccine or toxoid)

Excellent! Apply Your Knowledge Which section of the CPT is not arranged in numerical order and why? ANSWER: The first section, Evaluation and Management, is not in numerical order because the items in this section are used most often and by all physicians in any medical specialty. Excellent!

Excellent! Apply Your Knowledge The insurance representative has questioned the codes listed on three patient forms that were submitted last year. When re-checking these forms the office medical assistant should: Excellent! ANSWER: Use the current book to validate accuracy of the codes Use last year’s book to validate accuracy of the codes Use next year’s book to validate accuracy of the codes

HCPCS The Health Care Common Procedure Coding System Developed by the Centers for Medicare and Medicaid Services (CMS) Pronounced “hic-picks”

HCPCS (cont.) Contains two levels Level I codes Level II codes Duplicate CPT codes Level II codes National codes for supplies and DME (durable medical equipment) 5 characters – numbers, letters, or a combination of both Can have modifiers

Using the CPT Become familiar with guidelines and notes for each section Find the procedures and services provided by the office Determine appropriate codes and modifiers Enter codes and modifiers on CMS-1500 form

Using the CPT (cont.) Locating a CPT Code      Match procedure with diagnosis  Locating a CPT Code Carefully record procedure codes on health-care claim  Determine appropriate modifiers  Look up procedure code(s) in the alphabetic index of the CPT manual  Locate services documented 

Apply Your Knowledge Stellar! What are HCPCS Level II codes and who issues them? ANSWER: HCPCS Level II codes are national codes used for supplies, DME, and services not included in the CPT. They are issued by Centers for Medicare and Medicaid Services (CMS). Stellar!

Coding Compliance Code Linkage Diagnostic Procedures Compliance with federal and state law and payer requirements is mandatory Code Linkage A process used by insurance company representatives to evaluate the necessity of medical procedures reported based on the patient’s diagnosis Diagnostic Procedures Prevent errors in coding and incorrect billing by careful attention to details

Insurance Fraud Investigators look for patterns such as Reporting services that were not performed Reporting services at a higher level Performing and billing for procedures not related to the patient’s condition and therefore not medically necessary Billing separately for services that are bundled in a single procedure code Reporting the same service twice

Compliance Plans Medical offices establish a process for finding, correcting, and preventing illegal medical practices Goals of compliance plan Prevent fraud and abuse Ensure compliance with applicable laws Help defend physicians if investigation occurs

Compliance Plans (cont.) Plan demonstrates to payers honest, ongoing attempts to correct any weak areas of compliance Plan is developed by a compliance officer and committee who also: Audit and monitor compliance Develop written policies and procedures that are consistent with regulations and laws Provide ongoing communication and training to staff Respond to and correct errors

Correct! Apply Your Knowledge What are the goals of a compliance plan and what does having a plan indicate? ANSWER: The goals of a compliance plan are to prevent fraud and abuse, ensure compliance with applicable laws, and to help defend physicians if an investigation occurs. Having a plan indicates that the medical office is making honest, ongoing attempts to find and fix weak areas of compliance. Correct!

In Summary 16.1 The purpose of the ICD-9 manual is to find diagnosis codes for patients’ medical conditions. It is formatted with the Alphabetic Index and the Tabular List 16.2 To analyze diagnoses, think about the condition and not the body part; then think about the location. This will assist you in finding the correct codes much more easily. 16.3 The CPT-4 is used for locating medical procedure codes. It is organized from Evaluation/Management (E/M) to Medicine.

In Summary (cont.) 16.4 The three levels that determine E/M service are extent of patient history taken, extent of exam conducted, and complexity of the medical decision making. 16.5 The two types of HCPCS codes are Level I codes (also called CPT codes) and Level II codes, issued by CMS. 16.6 In locating a procedure code, you first become familiar with the format and guidelines. For further information on completing this process, see Procedure 16.3.

In Summary (cont.) 16.7 Diagnosis and procedure coding must be directly linked when reporting for reimbursement because payers analyze this connection to determine the medical necessity for the charge. 16.8 Insurance fraud is an act of deception used to take advantage of another entity. An example of billing and coding fraud is when a physician reports services that were not performed.

End of Chapter 16 Things gained through unjust fraud are never secure. ~ Sophocles