1. Basic Concepts of Coding and Insurance
Chapter 2
Basic Concepts of Coding and Insurance

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. 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. Chapter 2
Lesson 2.1

5. Overview of 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.
What are other forms of insurance available to a patient? (Answers will vary but could include short- and long-term insurance.)

6. Overview of Health Insurance
Third-party payers: insurance companies
Seven common insurance types include:
Medicare
Medicaid
Medi/Medi
TRICARE (managed care insurance for active and retired military)‏
Who qualifies for Medicare?
What is the difference between Medicare and Medicaid?
What type of patient qualifies for both?

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)‏
Which of these insurance plans cover(s) employees for on-the-job accidents and injuries?
The CMS-1500 claim form is always used by Medicare and Medicaid, yet other insurance companies use this form, too.
Should you assume that the CMS is a global claims form or should you check with the individual insurance company?

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
What is Medicare?
Who is eligible for Medicare?

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
What is SSA?
What is SSI?

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)‏
There are two parts to Medicare. What are the two parts?

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
Can an individual be eligible for both Medicare and Medicaid?

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
Who manages TRICARE?

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
What provider options do individuals eligible for CHAMPVA have?

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
When sending in claims, some insurance companies accept claims directly; others require that claims be sent into a clearinghouse.
What is the advantage of using a clearinghouse?
In what case is a clearinghouse not necessary?
On Medisoft, how do you submit forms electronically?

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
What are some examples of insurance types that might go in the “type” field?
What is Medigap?

16. Chapter 2
Lesson 2.2

17. ICD-9-CM Coding Overview
International Classification of Diseases-9th edition–Clinical Modifications
System used to code patient diagnosis
Developed by WHO (World Health Organization)
What are V codes?
What are E codes?

18. ICD-9-CM Coding Overview
Three volumes:
Volume 1: disease and condition codes
(V 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
Which volume should an allied health professional turn to first?

19. ICD-9-CM Coding Overview ‏
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)‏
If fourth or fifth digits are present, do they have to be used?

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.
Have the students remember a recent visit to the doctor. Have them look up their diagnosis in the ICD-9 coding book.

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
What is the difference between CPT and E/M codes?
Can you list one without the other? Why or why not?
What is a superbill?

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
Established patient
What are the three elements involved in decision making?
Can insurance claims be submitted without diagnosis and procedure codes? Why or why not?

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
How do diagnosis and procedure codes impact billing?
What happens if codes are missing? Does the insurance company kick the claim back to you? Does it cause delays?

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.
In addition to CPT codes, what else do transaction codes indicate with Medisoft?

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
Have students look up other place of service codes.

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.
Why does Medisoft use cases? (They are used to group together transactions that apply to specific encounters with a provider.)