1. Medical Insurance Coding
Chapter 18
Medical Insurance Coding

2. Insurance Coding Systems
Procedure coding
Current Procedural Terminology (CPT)
Developed by American Medical Association (AMA)
Used to code medical procedures
Medicare supplement to CPT system
New CPT book issued every October

3. Insurance Coding Systems
Procedure coding
International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM)
Developed by World Health Organization (WHO)
Used to classify all known diseases

4. Insurance Coding Systems
Procedure coding
Importance of accuracy
Down-coding and up-coding
Bundled codes and unbundling

5. Coding of Medical Procedures
Adhere to ethical standards and legal practices
Chart documentation must support the code
Maintain coding skills through CEUs and networking

6. CPT Manual Organization and Use
Procedure for determining a CPT code
Turn to Category I section of the CPT codebook and select one of the sections that constitutes the general classification of the procedure being coded
Select the name of the procedure or service that accurately identifies what you are looking for
Do not select a CPT code that only approximately defines the service performed
Use appropriate unlisted codes if can not find exact code

7. CPT Manual Organization and Use
Procedure for determining a CPT code
Unlisted codes are found at the end of each subsection
Five-digit code for unlisted services end in 00
Special report must be submitted with an unlisted code
Unlisted codes should not be used if a Category III code is available

8. CPT Manual Organization and Use
Procedure for determining a CPT code
Category III section is found in the back of the codebook and gives temporary codes
2007 edition provides codes for treatment of patients for virtual office visits

9. CPT Manual Organization and Use
Divided into seven sections
Evaluation and Management (E&M) section
Anesthesia section
Surgery section
Radiology, nuclear medicine, and diagnostic ultrasound section

10. CPT Manual Organization and Use
Divided into seven sections
Pathology and laboratory section
Medicine section
Index
Modifiers
Procedure 19-1 CPT coding
Assign or discuss the critical thinking box

11. Healthcare Common Procedure Coding System (HCPCS)
Codes are used as supplements to the basic CPT system
Required when reporting services and procedures provided to Medicare and Medicaid beneficiaries
HCPCS uses the basic system Level I

12. Healthcare Common Procedure Coding System (HCPCS)
Level II codes
Provides codes to enable the provider to report nonprovider services
Durable medical equipment, supplies and medications, and ambulance service
Level III codes
Defined by the Medicare regional Part B carriers

13. Coding of Medical Diagnoses
ICD-9-CM resource manual organization and use
Broken into three volumes
External cause codes (E codes)
Supplementary health factor codes (V codes)
Morphology codes (M codes)
Code references
NEC or NOS
Procedure 18-2 ICD-9-CM Coding
Assign or discuss the critical thinking boxes

14. Coding of Medical Diagnoses
Coding accuracy
Be as precise as possible
Do not guess
Do not code what is not there

15. Coding of Medical Diagnoses
Watch the video

16. Coding the Claim Form Encounter form CMS-1500 (08-05)
Information transferred to claim form
CMS-1500 (08-05)
Indicates complexity of visits, diagnoses, and procedures performed
EHRs use encoder programs available on CD-ROM or as Internet downloads
Review examples of coding

17. Third-Party Guidelines
Patient and provider enter into a contract for specific services when appointment is scheduled
First party
The person receiving the contracted service
Second party
Person or organization providing the service
Third party
Involved with reimbursement procedures

18. Third-Party Guidelines
Confidentiality issues
HIPAA and PHI
Authorization to release necessary medical information
Authorization exceptions
See also Chapters 11, 12, 13, 14, and 17 about HIPPA and PHI
Procedure 18-3 applying third-party guidelines

19. Completing the Claim Form
Most common claim form is the CMS-1500 (08-05)
CMS-1500 (08-05) sections
Carrier section
Patient and insured information section
Physician or supplier information section
Discuss how EHR is used in completing the claim form (Figure 18-3)

20. Completing the Claim Form
Uniform Bill 04 (UB04)
Accommodates reporting National Provider Identifier (NPI) number
Procedure 18-4 Completing the Claim Form

21. Using the Computer to Complete Forms
Optical character reader (OCR) guidelines
Common errors in completing claim form
Documentation of referrals
Benefits of submitting claims electronically
Procedure 18-5 Insurance Billing Using Medical Office Simulation

22. Managing the Claims Process
Documentation of referrals
Point-of-service device
Provides immediate and direct access to patient eligibility information and managed care functions through electronic network
Connects medical office and health plan’s computer
Maintaining claim register or diary

23. The Insurance Carrier’s Role
Checks that coverage is in force at time of treatment
Provider contracted with the insurance carrier
No exclusions or restrictions on policy

24. The Insurance Carrier’s Role
No preexisting condition restrictions
Diagnosis and procedures are medically necessary and reasonable
Verify the billed amount falls within UCR fee

25. Explanation of Benefits
Sent to insured
What it includes
May act as bill

26. Compliance Programs
Basic elements of compliance program