1. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved 1 Chapter 06 Procedural Coding Insurance Handbook for the Medical Office 13 th edition

2. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Basics of Procedural Coding 1. Explain the purpose and importance of coding for professional services. 2. Define terminology used in Current Procedural Terminology (CPT). 3. Demonstrate an understanding of CPT code conventions. 4. Describe various methods of payment by insurance companies and state and federal programs. 5. Describe the process in which the Healthcare Common Procedure Coding System (HCPCS) and relative value studies (RVS) are used to create a fee schedule. 2 Lesson 6.1

3. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Basics of Procedural Coding (cont’d) 6. Interpret the meaning of CPT code book symbols. 7. Identify the complexity of evaluation and management (E/M) services codes. 8. Compare a surgical package and a Medicare global package. 9. Explain various types of code edits. 3 Lesson 6.1

4. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Understanding the Importance of Procedural Coding Skills  Procedure coding: the transformation of written descriptions of procedures and professional services into numeric designations (code numbers)  Procedure codes are a standardized method used to precisely describe the services provided by physicians and allied health professionals 4

5. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Current Procedural Terminology  Five-digit system for coding services  Two-digit add-on modifiers  Represents diagnostic and therapeutic services  System of choice from CMS 5

6. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Current Procedural Terminology  Level I: The AMA CPT codes and modifiers (national codes)  Level II: CMS-designated codes and alpha modifiers (national codes)  Level III: Codes specific to regional fiscal intermediary or individual insurance carrier (local codes) and not found in either levels I or II 6

7. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Current Procedural Terminology  Physician or provider service = CPT code  Supplies = HCPCS national code  Instructions to use from carrier = local code  Integrative healthcare products = Alternative Billing Codes (ABCs) 7

8. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Methods of Payment  Fee schedule  Multiple schedules can be used  Consistent charges and uniform application  Usual, customary, and reasonable  Three fees determine reimbursement  Relative value scales or schedules  Units (RVUs) based on median charges for all physicians during a given time period  Conversion factors translate units to dollars 8

9. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Usual, Customary, and Reasonable 9

10. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Resource-Based Relative Value Scale  Resource-based Relative Value Scale (RBRVS)  To distribute Medicare dollars more equitably  To control escalating costs from UCR  Fee schedule based upon relative values  Relative Value Unit (RVU)  Geographic adjustment factor (GAF)  Monetary conversion factor (CF)  RVU x GAF x CF = Medicare $ per service 10

11. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Resource-Based Relative Value Scale 11

12. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Code Book Symbols 12

13. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  Divided into three sections  Office visits New patients Established  Hospital visits Initial visit Subsequent visits  Consultations 13

14. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  Elements of E/M codes  History  Examination  Medical decision-making  Nature of presenting problem  Counseling  Coordination of care  Time 14

15. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  Subsections of E/M  Hospital inpatient services  Consultation  Critical care  Pediatric and neonatal critical care  Emergency care  Preventative medicine 15

16. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  Selecting an E/M code  Determine category  Determine subcategory  Note key components  Note contributory factors  Determine appropriate E/M level and code 16

17. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section 17

18. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  CPT Code Digit Analysis 18

19. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  Code Selection Criteria for Consultation 19

20. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Evaluation and Management Section  E/M Levels 20

21. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Surgery Section  Always start with the operative report  Assign code for postoperative diagnosis  Assign codes for additional diagnoses  Attach documentation to the claim form  Code only documented procedures  Confirm all diagnosis and procedure codes  Be sure to use appropriate modifiers 21

22. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Surgical Package for Non-Medicare Cases  Includes:  The operation  Local infiltration; topical anesthesia or metacarpal, metatarsal, or digital block  Subsequent to the decision for surgery, one related E/M encounter on the date immediately before or on the date of procedure (including history and physical)  Immediate postoperative care, including dictating operative notes and talking with the family and other physicians  Writing orders  Evaluating the patient in the post-anesthesia recovery area  Typical postoperative follow-up care (hospital visits, discharge, or follow-up office visits) 22

23. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Surgery Section  Surgical Package vs. Medicare Global Package 23

24. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Surgery Section  Surgery services  Never event  Transfer to another facility  Follow-up (postoperative) days  Repair of lacerations  Multiple lesions  Supplies  Incident-to services  Prolonged services, detention, or standby 24

25. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Unlisted Procedures  Codes assigned for unusual procedures  Supporting documentation is required to justify the procedures  Comprehensive list of unlisted codes is at the beginning of each section 25

26. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Comprehensive and Component Edits  Code combinations that are specified as “separate procedures” by the CPT  Codes that are included as part of a more extensive procedure  Code combinations that are restricted by the guidelines outlined in the CPT  Component codes that are used incorrectly with the comprehensive code 26

27. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Mutually Exclusive Code Edits  Code combinations that are restricted by the guidelines outlined in the CPT  Procedures that represent two methods of performing the same service  Procedures that cannot reasonably be done during the same session  Procedures that represent medically impossible or improbable code combinations 27

28. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Coding Guidelines for Code Edits  Bundling: to group codes together that are related to a procedure  Unbundling: coding and billing numerous CPT codes to identify procedures usually described by a single code 28

29. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Coding Guidelines for Code Edits  Downcoding: when a coding system of an insurance carrier converts a code to reduce the level of codes on an insurance claim  Upcoding: the deliberate manipulation of CPT codes for increased payment 29

30. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Code Monitoring 30

31. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Practice Diagnostic Coding 10. Explain how to choose accurate procedural codes for descriptions of services and procedures documented in a patient’s medical record. 11. Explain correct usage of modifiers in procedure coding. 31 Lesson 6.2

32. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Helpful Hints in Coding  Office visits  Be careful with assignment the appropriate E/M code for standing orders  Some insurance policies only allow 2 moderate- or high-complexity office visits per patient per year 32

33. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Helpful Hints in Coding  Drugs and injections  Name, amount, dosage, strength, how it was administered  Roster billing for mass immunizations for Medicare patients 33

34. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Helpful Hints in Coding  Adjunct codes  Identify special services and reports  Basic life or disability evaluation services  Code 99450 – life or disability insurance  Codes 99455 and 99456 – work-related or medical disability examinations 34

35. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Code Modifiers  Modifiers can indicate:  A service or procedure has either a professional or technical component  A service or procedure was performed by more than one physician or in more than one location  A service or procedure has been increased or reduced  A service or procedure was provided more than once  Only part of a service was performed  An adjunctive service was performed  A bilateral procedure was performed  Unusual events occurred 35

36. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Code Modifiers  Modifier -22: Increased Procedural Services  Modifier -25: Significant, Separately Identifiable Evaluation and Management Service  Modifier -26: Professional Component  Modifier -51: Multiple Procedures  Modifier -52: Reduced Services  Modifier -57: Decision for Surgery 36

37. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Code Modifiers  Modifier -58: Stages or Related Procedure  Modifiers -62, -66, -80, -81: More Than One Surgeon  Modifier -99: Multiple Modifiers 37

38. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Healthcare Common Procedure Coding System  Level II modifiers may be used by some commercial payers  Two alpha digits, two alphanumeric characters, or single alpha digit 38

39. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Questions? 39