chapter © 2011 the mcgraw-hill companies, inc. all rights reserved. 16 medical coding

CHAPTER

© 2011 The McGraw-Hill Companies, Inc. All rights reserved.

16Medical Coding


16-2

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.


16-3

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.


16-4

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


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Diagnosis Codes: The ICD-9-CM

Patient Chief Complaint

Physician MedicalDiagnosis

InsuranceDiagnosisCode

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


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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.


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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


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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• “E” – external

• Identify external causes of injuries and poisoning resulting from environmental events

• Never used alone as a diagnostic code

V Codes

E Codes


16-9

A list of abbreviations, punctuation, symbols, typefaces, and notes that provide guidelines for using the code set.

Conventions

NOSAn abbreviation that means “not otherwise specified” or “unspecified”

NECAn abbreviation that means “not elsewhere classified”; used when the ICD-9 does not provide a specific code to describe the patient’s condition

[ ]Brackets are used around synonyms,

alternate wording, or explanations

( )Parentheses are used around alternative wording

ICD-9-CM Conventions


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Conventions

: Used in the Tabular List after an incomplete term} Brace encloses a series of terms

Includes Refines content of preceding entry

§ Indicates that the footnote is applicable to all subdivisions in that code

Excludes Indicates that the entry is not classified as part of the preceding code

ICD-9-CM Conventions (cont.)


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Conventions

ExcludesThese notes indicate that an entry is not classified as part of the preceding code

Use additional

code

This note means an additional code should be used if available

Code first underlying

disease

This means that the code is not to be used for the primary diagnosis

ICD-9-CM Conventions (cont.)


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Locate the patient’s diagnosis

Find the diagnosis in the Alphabetic Index

Locate the code from the Alphabetic Index in the Tabular List

Read all information to find the code that corresponds to the patient’s condition

Record the code on the claim form

The ICD-9-CM Codes (cont.)


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The ICD-10-CM/ICD-10-PCS

• Revisions to ICD-9-CM– 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


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Apply Your Knowledge

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.


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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


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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 00100–01999Surgery 10021–69990

Radiology 70010–79999

Pathology and Laboratory 80048–89356

Medicine 90281–99602


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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


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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


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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


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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


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Laboratory Procedures

Immunizations

The CPT (cont.)

• Injections require two codes – One for the procedure (injection) – One for the medication (vaccine or toxoid)

• Panels – organ or disease-oriented – Pathology and Laboratory sections

of the CPT – If separate codes are used, they will

be rebundled and payment delayed


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1.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!


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2. 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:

a. Use the current book to validate accuracy of the codes

b. Use last year’s book to validate accuracy of the codes

c. Use next year’s book to validate accuracy of the codes


Excellent!ANSWER:


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HCPCS

• The Health Care Common Procedure Coding System

– Developed by the Centers for Medicare and Medicaid Services (CMS)

– Pronounced “hic-picks”


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HCPCS (cont.)

• Contains two levels– Level I 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


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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


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Locate services documented

Look up procedure code(s) in the alphabetic index of the CPT manual

Determine appropriate modifiers

Carefully record procedure codes on health-care claim

Match procedure with diagnosis

Using the CPT (cont.)


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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).


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Coding Compliance• Compliance with federal and state law and payer

requirements is mandatory

Code Linkage

Diagnostic

Procedures

A process used by insurance company representatives to evaluate the necessity of medical procedures reported based on the patient’s diagnosis

Prevent errors in coding and incorrect billing by careful attention to details


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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


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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


16-32

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


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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!


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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.


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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.


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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.


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Things gained through unjust fraud are never secure.

~ Sophocles

End of Chapter 16

chapter © 2011 the mcgraw-hill companies, inc. all rights reserved. 16 medical coding

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