1. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding for Medical Necessity Chapter 10

2. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding for Medical Necessity The next step in learning to code correctly is to choose diagnoses and procedures/services from a case and link each procedure/service that justifies medical necessity for performing the procedure/service.

3. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding for Medical Necessity This chapter requires you to review case scenarios and patient reports to decide the right diagnoses and procedures/services to be coded and medical necessity issues.

4. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding for Medical Necessity Be sure to code and report only those diagnoses, conditions, procedures, and/or services that are documented in the patient record as having been treated or medically managed.

5. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding for Medical Necessity Medically managed means that even though a diagnosis (e.g., hypertension) may not receive direct treatment during an encounter, the provider has to consider that diagnosis when determining treatment for other conditions.

6. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Questions for Consideration Does this 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?

7. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Questions for Consideration (cont.) 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?

8. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Applying Coding Guidelines Up to four diagnosis codes can be reported on one CMS-1500. When reporting procedure/service codes on the CMS-1500, it is important to carefully match the appropriate diagnosis code with the procedure or service provided.

9. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations You should also incorporate the following as part of practice management –Completion of an Advance Beneficiary Notice (ABN) when appropriate –Implementation of an auditing process

10. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) – Review of local coverage determinations and national coverage determinations – Complete and timely patient record documentation – Use of outpatient code editor (OCE) software (outpatient hospital claims)

11. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) The following characteristics are associated with patient record documentation in all health care settings. –Documentation should be generated at the time of service or shortly thereafter.

12. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) –Delayed entries within a practical time frame (24 to 48 hours) are acceptable for purposes of clarification, corrections of errors, and addition of information not initially available.

13. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) The patient record cannot be altered. –Corrections or additions to the patient record must be dated, timed, and legibly signed or initialed. –Use of correction fluid is prohibited. –Patient record entries must be legible. –Entries should be dated, timed, and authenticated by the author.

14. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) An authentication legend should be generated that contains the word-processed provider’s name and, next to it, the provider’s signature.

15. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) Advance Beneficiary Notice –A waiver required by Medicare for all outpatient and physician office procedures/services that are not covered by the Medicare program

16. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) –Patients sign the waiver to indicate that they understand the procedure or service is not covered by Medicare and that they will be financially responsible for reimbursing the provider for the procedure or service performed.

17. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) Medical practices and healthcare facilities should regularly participate in an auditing process. –Allows for review of patient records and CMS-1500 or UB-92 claims to evaluate coding accuracy and completeness of documentation.

18. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) The Medicare coverage database (MCD) is used by Medicare administrative contractors, providers, and other healthcare industry professionals to determine whether a procedure or service is reasonable and necessary for the diagnosis or treatment of an illness or injury.

19. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) The MCD contains –National coverage determinations (NCDs), including draft policies and proposed decisions –Local coverage determinations (LCDs), including policy articles

20. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) National coverage determinations (NCDs) –Developed by CMS on a regular basis Local coverage determinations (LCDs) –Edits created by Medicare administrative carriers for NCD rules

21. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) NCDs (and LCDs) link ICD-9-CM or ICD- 10-CM diagnosis codes with procedures or services that are considered reasonable and necessary for the diagnosis or treatment of an illness or injury.

22. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) When NCDs (or LCDs) indicate that a procedure or service is not medically necessary, the provider is permitted to bill the patient only if an Advance Beneficiary Notice (ABN) is signed by the patient prior to providing the procedure or service.

23. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) Claims submitted with diagnosis and procedure/service codes that fail NCD or LCD edits may be denied. When an LCD and an NCD exist for the same procedure or service, the NCD takes precedence.

24. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding and Billing Considerations (cont.) Local coverage determinations specify under what clinical circumstances a service is covered and correctly coded. OCE –Software that edits outpatient claims submitted by hospitals, home health agencies, and other facilities

25. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Case Scenarios Case scenarios are a summary of medical dates from patients’ records. –Introduces students to the process of abstracting diagnoses and procedures.

26. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Case Scenarios (cont.) Step 1 –Read case scenario and look up any words you don’t understand. Step 2 –Reread. –Highlight diagnoses and symptoms. Those that support medical necessity of the procedures performed

27. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Case Scenarios (cont.) Step 3 –Code documented diagnoses, symptoms, procedures, signs, health status, and services. Step 4 –Assign any modifiers that are appropriate.

28. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Case Scenarios (cont.) Step 5 –Identify the primary condition. Step 6 –Link any procedure or services that were provided to the diagnosis to show medical necessity.

29. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Patient Reports A patient record serves as the business record for a patient encounter, and it is maintained in a paper format (manual record) or an automated format (e.g., electronic medical record).

30. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Patient Reports The primary purpose of the patient record is to provide continuity of care documentation of patient care services so that others who treat the patient have a source of information on which to base additional care and treatment.

31. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Coding from Patient Reports Secondary purposes do not relate directly to patient care and include –Evaluating quality of patient care –Providing information to third-party payers for reimbursement –Serving the medicolegal interests of the patient, facility, and providers of care –Providing data for use in education, clinical research, and other purposes

32. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Clinic Notes There are two major formats that healthcare providers use for documenting clinic notes –Narrative clinic notes Written in paragraph format –SOAP notes

33. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. SOAP Notes Written in outline format SOAP –Subjective –Objective –Assessment –Plan

34. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. SOAP Notes (cont.) Subjective –Chief complaint and the patient’s description of the presenting problem Objective –Contains documentation of measurable observations made during the physical examination and diagnostic testing

35. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. SOAP Notes (cont.) Assessment –Contains diagnostic statement and may also include physician’s rationale behind diagnosis Plan –Statement for physician’s plans for workup and medical management of the case

36. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Diagnostic Test Results Documented in two locations –Clinic notes –Laboratory reports Quantify data; diagnostic implications are summarized in clinic notes documented by the provider

37. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Laboratory Report © Cengage Learning 2013

38. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Radiology Report © Cengage Learning 2013

39. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Operative Reports Short narrative description of a minor procedure that is performed in the physician’s office. More formal reports are dictated by the surgeon in a format required by hospitals and ambulatory surgical centers (ASCs).

40. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Information Contained in Outline Forms Date of surgery Patient identification Pre- and postoperative diagnoses List of the procedure(s) performed Name of primary and secondary surgeons who performed surgery

41. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. The Body of the Report Positioning and draping of the patient for surgery Achievement of anesthesia Detailed description of how the procedure(s) were performed Identification of abnormalities found during the surgery

42. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. The Body of the Report (cont.) Description of how homeostasis was obtained and closure of surgical site(s) Condition of patient at the time of leaving the operating room Signature of surgeon

43. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Procedure for Coding Operative Reports Step 1 –Make a copy of the report. Step 2 –Carefully review all procedures performed. Step 3 –Read the body of the report and make notes of procedures that need to be coded.

44. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Procedure for Coding Operative Reports (cont.) Step 4 –Identify main terms and subterms for procedures to be coded. Step 5 –Underline and research any terms in the report that you cannot define.

45. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Procedure for Coding Operative Reports (cont.) Step 6 –Locate main terms in the CPT/index. Step 7 –Research all the suggested codes.

46. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Procedure for Coding Operative Reports (cont.) Step 8 –Return to the CPT index if you cannot find a code that matches the description of the procedures performed. Step 9 –See if there are any modifiers that need to go on the procedures to explain them fully.

47. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Procedure for Coding Operative Reports (cont.) Step 10 –Code postoperative diagnosis. Step 11 –Review code options with the physician. Step 12 –Assign final codes and any addendum the physician added to the original report.

48. Copyright © 2013 Delmar, Cengage Learning. ALL RIGHTS RESERVED. Procedure for Coding Operative Reports (cont.) Step 13 –Properly sequence codes listing the most significant procedure performed first. Step 14 –Be sure to destroy your copy of the report.