Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education Chapter 12 Category II and Category III Coding

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objectives LO 12.1 Interpret the guidelines for using Category II codes. LO 12.2 Obtain the most current information about Category II codes. LO 12.3 Correctly use Category II code modifiers. 12-2

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Learning Objectives (cont.) LO 12.4 Utilize the details on quality reporting for physician bonus payments. LO 12.5 Identify the guidelines for using Category III codes. LO 12.6 Correctly follow notational instructions with Category III codes. 12-3

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Key Terms Category I codes Category II codes Category III codes Customary clinical documentation Experimental 12-4

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Key Terms (cont.) Intervention Medical exclusion criteria Patient population Performance measure Unlisted codes 12-5

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II and Category III Codes Used for statistical purposes –Physician Quality Reporting System (PQRS) Track and measure performance and quality of care 12-6

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II and Category III Codes (cont.) Not used for reimbursement Not used in substitution for a Category I code Category III codes report the use of new, emerging technologies 12-7

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Codes Found directly after the Medicine section of the CPT book Used in conjunction with “Alphabetic Index of Performance Measure by Clinical Condition or Topic” – 12-8

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Codes (cont.) Each code’s description explains clinical fundamentals –Vital signs, lab test results, patient education 12-9

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Codes (cont.) CMS uses Category II codes in determining physician bonus payments under the PQRS Five characters –Four numbers followed by the letter F 12-10

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Codes (cont.) Nine categories –Composite measures –Patient management –Patient history –Patient examination –Diagnostic/screening processes or results 12-11

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Codes (cont.) Nine categories (cont.) –Therapeutic, preventive, or other interventions –Follow-up or other outcomes –Patient safety –Structural measures 12-12

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Codes (cont.) Categories determined by content from customary clinical documentation formatting 12-13

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Alphabetic Measure Index of Performance Measures Complete explanation of what is being measured within the component Characteristics of patients that would make them eligible for this report 12-14

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Alphabetic Measure Index of Performance Measures (cont.) Factors that would automatically include or exclude a particular patient 12-15

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Alphabetic Measure Index of Performance Measures (cont.) 12-16

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Alphabetic Measure Index of Performance Measures (cont.) Reimbursement comes from using E/M codes Category II codes enable calculation and evaluation of individual healthcare services 12-17

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Modifiers Explain why a protocol was not provided –1P Due to medical reasons Not indicated, contraindicated, other medical reasons –2P Due to patient reasons Patient declined, economic, social or religious reasons, other patient reasons 12-18

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category II Modifiers (cont.) Explain why a protocol was not provided (cont.) –3P Due to system reasons Resources not available, insurance coverage limitation, other reasons –8P Reason unspecified 12-19

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Physician Quality Reporting System (PQRS) Four steps to report quality measurement data –Identify Medicare-covered patients who qualify –Document fulfillment of measure in notes for the encounter 12-20

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Physician Quality Reporting System (PQRS) (cont.) Four steps to report quality measurement data (cont.) –Assign appropriate Category II code –Submit appropriate diagnosis and procedure codes plus the performance measurement codes with a charge of $

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Physician Quality Reporting System (PQRS) (cont.) Bonus payments are based on the “successful reporting” of designated quality data 12-22

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Physician Quality Reporting System (PQRS) (cont.) PQRS quality measures must –Be adopted by consensus organization –Include measures submitted by physician specialty 12-23

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Physician Quality Reporting System (PQRS) (cont.) PQRS quality measures must (cont.) –Be identified by CMS as having used consensus-based process for development –Include structural measures Electronic health records 12-24

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category III Codes New procedures and services are assigned a Category III code so that actual usage can be accurately measured Four numbers followed by the letter T (temporary) 12-25

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category III Codes (cont.) Use of Category III codes is mandatory, as appropriate, according to the physician’s notes 12-26

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category III Notations Once procedures or services are accepted by healthcare professionals and are effective, safe, and beneficial in clinical practice, they are “promoted” to a Category I code –T code is deleted –Procedure is given a five-digit code –Placed in appropriate section of main text of the CPT book 12-27

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Category III Notations (cont.) Some third-party payers may consider some services experimental 12-28

Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter Summary Both Category II and Category III codes are updated twice a year –January 1 and June 1 Current listings can be found at