1. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 1 Chapter 2 Basic Concepts of Coding and Insurance

2. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 2 Learning Objectives  Describe the main differences between fee-for-service plans and managed care plans.  List the primary government healthcare programs and the basic eligibility requirements for each.  Enter and change insurance carrier information in Medisoft.

3. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 3 Learning Objectives  Describe the difference between CPT coding and ICD-9 coding.  Explain the process used to identify Evaluation and Management (E/M) codes.  Set up diagnosis and procedure codes in Medisoft.  Create Medisoft cases.

4. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 4 Chapter 2 Lesson 2.1

5. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 5 Overview of Health Insurance  Health Insurance  Provides protection for patients against the financial consequences of illness, injuries, and disabilities.  Payment for health insurance is referred to as a premium.

6. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 6 Overview of Health Insurance Third-party payers: insurance companies  Seven common insurance types include: Medicare Medicare Medicaid Medicaid Medi/Medi Medi/Medi TRICARE (managed care insurance for active and retired military)‏ TRICARE (managed care insurance for active and retired military)‏

7. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 7 Overview of Health Insurance  CHAMPVA (Civilian Health and Medical Program of the Veterans Administration)  Workers’ Compensation  Managed Care - includes health maintenance organizations (HMOs) and preferred provider organizations (PPOs)‏

8. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 8 Overview of Health Insurance Medicare: federally administered insurance program  retired people 65 & older on Social Security  retired railroad or civil service workers 65 & older  blind individuals

9. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 9 Overview of Health Insurance Medicare:  Disabled individuals eligible for Social Security  of any age  widows of disabled workers  adults disabled before 18 whose parents are retired or eligible

10. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 10 Overview of Health Insurance Medicare:  Children/Adults with chronic kidney disease or kidney transplant with end-stage renal disease  Kidney donors (all expenses related to kidney transplant are covered)‏

11. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 11 Overview of Health Insurance Medicaid: insurance program to help families whose income is below a specific level, regardless of age Medi/Medi: patients who cannot afford to pay the portion of their bill received by Medicare, may qualify for both Medicare and Medicaid

12. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 12 TRICARE  Formerly CHAMPUS (Civilian Health and Medical Program of the Uniformed Services) Three choices:  Standard: receive health care from military providers  Prime: voluntary health maintenance organization (optional)  Extra: patient does not have to enroll or pay fees, pays visit-by-visit basis at discounted rate

13. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 13 CHAMPVA  Similar to TRICARE  Available to spouses, dependent children of veterans who died of service-related injuries  Veterans with permanent service disabilities, their dependents

14. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 14 Insurance Carrier Information Entry  Used to bill insurance companies  Occurs at List menu Four tabs:  Address  Options and Codes  EDI/Eligibility  Allowed  By default, the Address tab displays

15. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 15 Insurance Carrier Information Entry Address Tab: enter basic address and plan information Options/Codes Tab: some fields are referenced by Medisoft for billing and payments. Billing methods are set from this tab. EDI/Eligibility: used to submit claims electronically Allowed: enter allowed amounts for each procedure code

16. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 16 Chapter 2 Lesson 2.2

17. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 17 ICD-9-CM Coding Overview ICD-9-CM:  International Classification of Diseases-9th edition–Clinical Modifications  System used to code patient diagnosis  Developed by WHO (World Health Organization)

18. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 18 ICD-9-CM Coding Overview  Three volumes:  Volume 1: disease and condition codes (V codes) (V codes) (E codes)‏ (E codes)‏  Volume 2: alphabetic index for Volume 1  Volume 3: contains coding procedures for surgical, therapeutic, and diagnostic procedures used primarily in the hospital

19. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 19   Each disease assigned three-digit number  4th digit: provides more detail to prognosis regarding site or symptom  5th digit: further classifies the disease (may be required)‏ ICD-9-CM Coding Overview ‏

20. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 20 ICD-9-CM Coding Steps  Identify the main medical terms related to the diagnosis.  Locate the main term in the alphabetical index, Volume 2.  Verify the code number by reading the code’s description in the numerical index, Volume 1.  Medisoft allows you to add as many diagnosis codes as needed.

21. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 21 CPT Coding Overview CPT Coding:  Current Procedural Terminology  System used to code services and procedures performed by providers  Evaluation and management (E/M) codes classify patients with their level of service

22. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 22 CPT Coding Overview ‏  Components to determine E/M code:  History of problem; provided by patient  Examination of problem affecting the body  Decision making: level of decision making involved in making a diagnosis New patient New patient Established patient Established patient

23. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 23 CPT Coding Overview ‏  Modifiers indicate special circumstances apply, often an alternation to procedure.  Two-digit CPT codes  -50: multiple or bilateral procedure  -79: unrelated procedure  -56: preoperative management only  -53: discontinued procedure

24. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 24 Diagnosis and Procedural Codes in Medisoft  In Medisoft, transaction codes not only include the CPT codes, but also:  Financial codes  Managed care codes  Finance charge codes  From the Lists menu, click Procedure/ Payment/Adjustment Codes.

25. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 25 Place of Service Codes  Two-digit codes used to identify where the procedure or service was performed.  11: Office  12: Home  23: Emergency room – hospital  24: Ambulatory surgical center  25: Birthing center

26. Copyright © 2011, 2009, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 26 Case Information Entry  Cases are situations or conditions for which a patient seeks treatment or services.  Two main reasons for setting up cases:  A case is set up whenever a patient is treated for a new and different condition.  When a patient’s insurance carrier changes.