Chapter 10 Coding for Medical Necessity

Applying Coding Guidelines Coding may not be a problem when reviewing short diagnosis, procedure, and service statements When working with case scenarios, sample reports, or patient records, the diagnosis, procedure, or service to code is based on provider documentation

Applying Coding Guidelines (continued) Code only diagnoses, procedures, and services documented in the patient record as having been treated or medically managed Medically managed means that even though a diagnosis might not receive direct treatment during an encounter, the provider has to consider that diagnosis when determining treatment for other conditions

Applying Coding Guidelines (continued) Questions to consider before assigning codes to a diagnosis include: Does the diagnosis or condition support a procedure or service provided during this encounter? Did the provider prescribe a new medication or change a prescription for a new or existing diagnosis or condition? Are positive diagnostic test results documented in the patient record to support a diagnosis or condition? Did the provider have to consider the impact of treatment for chronic conditions when treating a newly diagnosed condition?

Applying Coding Guidelines (continued) Up to 12 ICD-10-CM codes can be reported on a CMS-1500 claim When completing a claim, match appropriate diagnosis code(s) with reported procedure or service codes Providers often document past conditions that are not active problems, and such conditions are not reported on a claim

Applying Coding Guidelines (continued) Report ICD-10-CM codes on the claim: Beginning with first-listed diagnosis Followed by secondary diagnoses (e.g., coexisting conditions) treated or medically managed Link CPT or HCPCS level II code for each procedure or service with diagnosis that proves medical necessity for performing procedure or service

Applying Coding Guidelines (continued) Remember! One or more diagnosis code(s) are linked with each procedure or service code reported on the CMS-1500 claim Up to 12 ICD-10-CM codes are entered next to letters A-L in Block 21 of the CMS-1500 claim Appropriate diagnosis pointer(s) (letters) from Block 21 are reported in Block 24E to justify medical necessity of procedure or service code reported in Block 24D

Coding and Billing Considerations Incorporate the following as part of practice management: Completion of Advance Beneficiary Notice (ABN) when appropriate Implementation of auditing process Review of LCDs and NCDs Complete and timely patient record documentation Use of OCE software for outpatient hospital claims

Patient Record Documentation Must justify and support medical necessity of procedures and services reported to payers Documentation should be generated at the time of service or shortly thereafter

Patient Record Documentation (continued) Delayed entries within a reasonable time frame (24 to 48 hours) are acceptable for the following purposes: Clarification Correction of errors Addition of information not initially available When certain unusual circumstances prevent documentation at the time of service

Patient Record Documentation (continued) Delayed entries to authenticate services or substantiate medical necessity for purpose of reimbursement are prohibited Patient record cannot be altered; doing so is considered tampering with documentation

Patient Record Documentation (continued) Errors must be legibly corrected so a reviewer can determine origin of corrections Use of correction fluid (e.g., Wite-Out™) is prohibited Corrections or additions must be dated, timed, and legibly signed or initialed

Patient Record Documentation (continued) Patient record entries must be legible Entries are to be dated, timed, and authenticated by the author

Auditing Process Routinely audit patient records and CMS-1500 or UB-04 claims to assess: Coding accuracy Documentation completeness Review encounter forms to ensure accuracy of ICD-10-CM, CPT, and HCPCS level II codes

Medical Coverage Database Used by MACs, providers, and other professionals to: Determine whether a procedure or service is reasonable and necessary for diagnosis or treatment of an illness or injury

Medicare Coverage Database (continued) National coverage determinations (NCDs) Local coverage determinations (LCDs) National coverage analyses (NCAs) Coding analyses for labs (CALs) Medicare Evidence Development & Coverage Advisory Committee (MedCAC) proceedings Medicare coverage guidance documents

Medical Coverage Database (continued) NCDs and LCDs: Link diagnosis codes with procedures or services that are considered reasonable and necessary for diagnosis or treatment of illness or injury Specify under what clinical circumstances a service is covered (including under what clinical circumstances it is considered to be reasonable and necessary) and coded correctly

Outpatient Code Editor Abbreviated as (OCE) Software used to edit outpatient claims Reviews submissions for coding validity and coverage Edits result in one of the following dispositions: Rejection Denial Return to provider (RTP) Suspension

Coding from Case Scenarios STEP 1 – Read entire case scenario to: Obtain overview of problems presented Obtain overview of procedures and services performed Research any word or abbreviation not understood STEP 2 – Reread problem and highlight: Diagnoses, symptoms, or health status that supports, justifies, and/or proves medical necessity of any procedure or service performed

Coding from Case Scenarios (continued) STEP 3 – Assign codes to documented: Diagnoses, health status, signs, and symptoms Procedures and services STEP 4 – Assign modifiers to CPT and HCPCS level II codes, if applicable

Coding from Case Scenarios (continued) STEP 5 – Identify first-listed condition STEP 6 – Link each procedure or service to a diagnosis, symptom, or health status for medical necessity

Coding from Patient Reports Patient record: Serves as business record for patient encounter Is maintained as manual record or in automated format Contains documentation of health care services provided to a patient Supports diagnoses, justifies treatment, and documents treatment results Primary purpose is to provide continuity of care

Coding from Patient Reports (continued) Secondary purposes of patient record do not relate directly to patient care, and include: Evaluating the quality of patient care Providing information to payers for reimbursement Medico-legal interests Providing data for use in: Clinical research and epidemiology studies Education and public policy making Facilities planning and health care statistics

Coding from Patient Reports (continued) Clinic notes use two major formats: Narrative clinic note SOAP note Diagnoses, procedures, and services can be selected and coded from either format Both require documentation to support level of E/M service reported on CMS-1500

Narrative Clinic Note Written in paragraph form

SOAP Note Written in outline format SOAP is acronym derived from first letter of topic headings used in the note Subjective – contains chief complaint and patient’s description of presenting problem Objective – contains documentation of measurable or objective observations made during physical examination and diagnostic testing

SOAP Note (continued) SOAP (continued) Assessment – contains diagnostic statement and may include physician’s rationale for diagnosis Plan – statement of physician’s future plans for the work- up and medical management of the case

SOAP Note (continued)

Diagnostic Test Results Documented in two locations: Clinic notes Laboratory reports Quantify data Summarize diagnostic implications in clinic notes Other diagnostic tests include interpretation by responsible physician

Sample Laboratory Report

Sample Radiology Report

Operative Reports Short narrative description of minor procedure performed in physician office Formal report dictated by surgeon Contain the following information: Date of surgery Patient identification Pre- and postoperative diagnosis List of procedure(s) performed Name(s) of primary and secondary surgeons Signature of surgeon

Operative Reports (continued) Narrative contains: Positioning and draping of patient Achievement of anesthesia Detailed description of how procedure was performed Identification of incision made Instruments, drains, and so on used during surgery Identification of abnormalities found during the surgery Description of how hemostasis was obtained Description of closure of surgical site Condition of patient upon leaving operating room

Sample Operative Report

Procedure for Coding Operative Reports STEP 1 – Make copy of operative report Make notations in the margin Highlight special details The above can be done without marking up original (which must remain in patient record) STEP 2 – Carefully review list of procedures performed

Procedure for Coding Operative Reports (continued) STEP 3 – Read narrative of report and make a note of procedures to be coded STEP 4 – Identify main term(s) and subterms for the procedure(s) to be coded

Procedure for Coding Operative Reports (continued) STEP 5 – Underline and research any terms in the report that you cannot define STEP 6 – Locate main term(s) in CPT index STEP 7 – Research all suggested codes

Procedure for Coding Operative Reports (continued) STEP 8 – Return to CPT index to locate any additional codes STEP 9 – Investigate possibility of adding modifiers to CPT codes STEP 10 – Code postoperative diagnosis

Procedure for Coding Operative Reports (continued) STEP 11 – Review code options with physician who performed procedure if case is unusual STEP 12 – Assign final code numbers for procedures verified in steps 3 and 4

Procedure for Coding Operative Reports (continued) STEP 13 – Properly sequence codes, listing first the most significant procedure performed during episode STEP 14 – Be sure to destroy copy of operative report (e.g., shred it) after abstracting and coding process is completed