1. 20
CPT and HCPCS Coding

2. Learning Outcomes
After completing Chapter 20, you will be able to: 20.1 List the sections of the CPT manual, giving the code range for each Give a brief description of each of the CPT's general guidelines List the types of E/M codes within the CPT List the areas included in the Surgical Coding section Locate a CPT code using the CPT manual Demonstrate how to locate a HCPCS code using the HCPCS coding manual Explain the importance of code linkage in avoiding coding fraud.

3. Introduction Procedural Coding Maximum Appropriate Reimbursement
Learning Outcomes:
20.1 List the sections of the CPT manual, giving the code range for each.
20.2 Give a brief description of each of the CPT's general guidelines.
20.3 List the types of E/M codes within the CPT.
20.4 List the areas included in the Surgical Coding section.
20.5 Locate a CPT code using the CPT manual.
20.6 Demonstrate how to locate a HCPCS code using the HCPCS coding manual.
20.7 Explain the importance of code linkage in avoiding coding fraud.
You will learn how to translate the medical terms for the procedures and services provided to patients into code numbers selected from standardized procedural coding systems.
These codes, when placed correctly on the health-care claims, explain to third-party payers the services that patients received from the provider.
After the concepts of procedure, or CPT, codes are explored, we discuss the “linking” of the diagnosis codes with the procedure codes to explain the medical necessity of each procedure or service performed.
The reward is accurate procedure codes that, when combined with accurate and appropriate diagnosis codes, bring the maximum appropriate reimbursement to the physicians in your medical office.

4. The CPT Manual Organization of the CPT Manual Refer to Figure 20-1
Modifiers
Refer to Figure 20-1
Learning Outcome:
20.1 List the sections of the CPT manual, giving the code range for
each.
After an office or clinic visit, hospital or nursing home visit, inpatient or outpatient consultation, or even a house call, each procedure and service performed to or for a patient is reported on health-care claims using a procedure code.
These codes represent medical procedures, such as surgery and diagnostic tests, and medical services, such as physical examinations to evaluate a patient’s condition.
Administrative medical assistants often choose procedure codes based on the information the physician gives them on the encounter form or the information within the patient medical chart or electronic health record, and they use them to report physicians’ services.
The most commonly used system of procedure codes is found in the Current Procedural Terminology, or simply CPT, published by the American Medical Association (AMA).
CPT is the HIPAA-required code set that translates descriptions for physicians’ and other providers’ health-care-related procedures into 5-digit codes.
Like ICD-9-CM, the CPT manual is updated yearly, with the new codes being used for services provided beginning January 1 of each new year.
In each new edition, newly developed procedures are added and old ones are revised or, if obsolete, deleted.
As with ICD-9, it is important to remember that the choice of which set of codes to use is based on the date of service, not the date of the claim.
As with ICD-9 codes, if current codes are not used, medical claims are often denied.
Previous editions of each coding manual should be kept for at least several months after the new edition is released for use with claims for dates of service in the prior year, as well as for reference in case questions arise regarding previously submitted claims.
Organization of the CPT Manual
CPT codes are organized into six main sections:
Evaluation and Management 99201–99499
Anesthesiology 00100–01999, 99100–99140
Surgery 10021–69990
Radiology 70010–79999
Pathology and Laboratory 80048–89356
Medicine (except for anesthesia) 90281–99199, 99500–99602
In looking at these section numbers, you will note that except for the Evaluation and Management section, the sections are listed in numeric order by code range.
Because Evaluation and Management (or E/M) codes are used so frequently, they are placed in the front of the manual for easy reference.
The Introduction to the CPT manual gives the user important general instructions for the use of CPT.
In this section you will also find helpful information regarding common prefixes, suffixes, and word roots found within the manual.
Pay close attention to the guidelines found at the beginning of each new section.
Each set of guidelines will give you important overall information for coding in each section.
The sections of the CPT are divided into categories.
These in turn are further divided into headings according to the type of test, service, or body system.
Code-number ranges included on a particular page are found in the upper right corner.
This helps to locate a code quickly after using the index.
Note that each page also gives you other important information:
Section Name. The section is the name used by CPT to denote each chapter.
Subsection Name. The subsection is the area within the section detailing the body system you are in.
Subheading. The subheading describes the body area for the body system you are looking at.
Category. The category describes the procedure area.
Modifiers
One or more 2-digit modifiers (up to three per procedure) may be assigned to the 5-digit main code.
The use of a modifier shows that one or more special circumstances apply to the service or procedure the physician performed.
Appendix A of the CPT explains the proper use of each modifier.
Some section guidelines also discuss the use of modifiers with the section’s codes.

5. Checkpoint LO 20.1
What information does the section category give the CPT user?
Learning Outcome:
20.1 List the sections of the CPT manual, giving the code range for each.
Instructor: Ask six students to share with the class the code ranges for the sections of the CPT manual.

6. General CPT Guidelines
CPT Code Format
Add-On Codes
Symbols Used in CPT
Category II Codes, Category III Codes, and Unlisted Procedure Codes
Coding Terminology
Learning Outcome:
20.2 Give a brief description of each of the CPT's general guidelines.
Each section of the CPT contains guidelines for that particular section.
There are also general guidelines found at the beginning of the manual that are followed throughout.
CPT Code Format
CPT codes are 5-digit numeric codes.
Most codes are stand-alone codes with the complete description listed next to the appropriate code.
The exception to this rule is the code description containing a semicolon, which is then followed by a code with an indented description.
An indented description means that you refer back to the previous code description, reading the information prior to the semicolon and adding the indented code information after the colon to complete the description.
Add-On Codes
A plus sign (+) is used for add-on codes.
These codes are used to describe procedures that are not done alone but done in addition to a "main" procedure.
Symbols Used in CPT
The CPT manual uses instructional symbols to give repetitive information without adding multiple pages to the manual.
Blue triangle
This symbol tells the user that the description of the code has been revised in some way from last year.
This information could be important as the change could mean that the procedure performed by the physician may now require a different code.
It could also mean something as simple as the placement of a comma or semicolon has changed.
Red dot
This symbol denotes a new code for this edition of CPT.
The # sign
The # (pound) sign was a new symbol in 2010.
It is used to note codes that are out of numeric sequence.
This was done so that code numbers would not be “reshuffled” every year.
This is a lot of work and very confusing with constantly changing code descriptions on a yearly basis.
You will note that each code is also found in red, in its “proper numeric place,” with directions telling the coder in what code range to locate the out-of-sequenced code.
Triangles toward each other
Triangles pointing toward each other with text between them denote new or revised text information.
Traditionally these arrows were green, but you will also see them used for the out-of-sequence coding information.
The instructions tell you where to look for the appropriate code, but the description is different from last year’s because now we have the involvement of resequenced codes.
Circle with diagonal line
This symbol is noted as “Modifier 51 Exempt.”
Modifier 51 is used when multiple procedures are performed in the same session.
Modifier 51 exempt codes are those for which the multiple-procedure modifier does not apply.
Appendix E of the CPT manual lists the modifier 51 exempt codes.
Additionally, modifier 51 is never appended to a designated add-on code.
Lightning bolt
The lightning bolt is used to denote vaccines that are pending FDA approval.
Appendix K in the CPT manual lists the vaccines affected by this symbol.
When the vaccines are approved, they will be listed on the AMA site and then in subsequent editions of CPT.
Bull’s eye
The bull’s eye symbol denotes moderate (conscious) sedation.
This symbol means that it is understood that conscious sedation is necessary for the procedure performed and so it is included in the procedure; it cannot be billed separately.
Because this code includes sedation as part of the procedure, administered by the physician performing the procedure, there will be no separate charge for the anesthesia.
Appendix G of the CPT manual lists all codes that include moderate (conscious) sedation.
Whenever you are coding, always watch carefully for these symbols.
Their instructions are explicit and must be followed to ensure correct procedural coding.
Category II Codes, Category III Codes, and Unlisted Procedure Codes
Category II codes are optional, supplemental tracking codes used to track health-care performance measures.
Category III codes are temporary CPT codes for emerging technology, services, and procedures.
If available, these codes should be used instead of the unlisted codes found throughout the CPT manual.
When no code is available to completely describe a procedure, a code for an unlisted procedure is selected.
Unlisted procedure codes are used for new services or procedures that have not yet been assigned codes in CPT.
When these codes are used, which is rare, a procedure or service description (usually from the medical record) is sent with the submission of the claim.
Some payers, including Medicare and Medicaid, prefer the use of HCPCS codes (when they are available) instead of the unlisted procedure codes used with CPT.
Check with individual payers to understand each payer's preferences.
Coding Terminology
Before you begin coding, you must have a basic understanding of common terminology used throughout the CPT manual.
Bundled codes consist of any code that includes more than one procedure in its description. Read code descriptions carefully as it is unethical (and often considered fraudulent) to intentionally unbundle procedures into component codes when a bundled procedure code is available.
Concurrent care is described as similar care being provided by more than one physician. Concurrent care frequently occurs when a patient is hospitalized and multiple specialists are caring for the patient. The services provided may be similar, but because of the differing specialties the care is not considered to be duplication of services.
Critical care is provided to unstable, critically ill patients. Constant bedside attention is needed in order to code critical care, so the physician’s documentation must be explicit regarding the time spent with the patient. The time need not be continuous, but the time is added together so that the critical care code(s) chosen is based on the sum total of the critical care given during one particular date. Unlike emergency care codes, which can be used only when the patient’s care is provided in an emergency department, the patient need not be in a critical care or intensive care bed in order for the codes to be used but the patient’s condition must be critical in nature.
Consultations are at the request of other health-care providers. A service can be considered a consultation only if the 3 R’s are present—request (from another physician), recording (documentation) of findings and recommendations, and report to the referring physician. If the consulting physician takes over the care of the patient, then he is no longer considered a consulting physician, but a treating physician. Note that, since January 2010, Medicare no longer accepts consultation codes, and comparable inpatient and outpatient E/M service codes are to be used instead.
Counseling is considered part of E/M (evaluation and management) services, but if a complete history and physical exam does not take place, counseling codes may be used. These codes may be used when discussing with the patient and family questions or concerns regarding one or more of the following: diagnostic results and recommendations, prognosis, risks and benefits of options, instructions for treatment and/or follow-up, importance of compliance, risk factor reduction, and patient/family education.
Downcoding is the term used when the insurance carrier bases reimbursement on a code level lower than the one submitted by the provider. This can occur for several reasons:
The coding system used by the insurer does not match that used by the provider. This can occur if the provider uses an HCPCS code that the insurer does not recognize. Always verify the code set accepted by the payer.
If a workers’ compensation carrier bases payment on an RVS (relative value system), the carrier may convert a CPT code to the lowest-paying code within the system. Again, check with the payer as to the system in use.
A payer requests backup documentation (medical records) on a case and finds that the documentation does not “back up” the level of code used on the claim. This is by far the most common cause of downcoding in medical offices. Be sure your provider documentation backs up the level of code used.
Unbundling is defined as breaking a bundled code into its component parts for higher reimbursement and is not allowed.
Upcoding refers to coding a procedure or service at a higher level than that which was provided to receive a higher level of reimbursement. Other terms for this process are code creep, overcoding, and overbilling, and all are fraudulent practices when done knowingly.

7. Checkpoint LO 20.2 What is the purpose of modifiers? Learning Outcome:
20.2 Give a brief description of each of the CPT's general guidelines.
Instructor: Allow the students a few minutes to formulate an answer to this checkpoint. Ask a few students to share their answers with the class.

8. Evaluation and Management Services
Key Factors in Determining Level of Service
Patient History
Physical Exam
Medical Decision Making
Three Contributory Factors in Assigning Codes
Learning Outcome:
20.3 List the types of E/M codes within the CPT.
To diagnose conditions and plan treatments, physicians use a wide range of time, effort, and skill for different patients and circumstances.
Evaluation and management codes (E/M codes) are often considered the most important of all CPT codes because they can be used by all physicians in any medical specialty.
Many E/M codes are divided based on the patient status of new patient versus established patient.
The general rule of thumb is that if a patient has been seen by a physician of the same specialty in the same practice within 3 years, she is an existing patient.
If the patient has not been seen in the practice within the last 3 years, she is considered a new patient.
The location of the service is also important because different E/M codes apply to services performed in a physician’s office or other outpatient location, a hospital inpatient room, a hospital emergency department, a nursing facility, an extended-care facility, or a patient’s home.
Key Factors in Determining Level of Service
The E/M section guidelines explain how to code different levels of these services.
Three key factors documented in the patient’s medical record help determine the level of service:
The extent of the patient history taken
The extent of the examination conducted
The complexity of the medical decision making
Patient History
The elements of a history include the chief complaint (CC); history of present illness (HPI); review of systems (ROS); and past, family, and/or social history (PFSH).
When coding, the history is described using one of the following terms:
Problem focused—limited to the chief complaint and brief history of present problem
Expanded problem focused—includes the chief complaint, brief history of the current problem, and a “problem-pertinent” review of systems
Detailed—still focuses on the chief complaint but also includes an extensive history of the current problem and extended review of systems and pertinent past, family, and/or social history
Comprehensive—the most complex of the histories, in which all four components of CC, HPI, ROS, and PFSH are documented
Physical Exam
The elements of the physical exam include the same terminology but relate to the level of examination performed.
There are three elements to the physical exam.
Constitutional exam includes any of the following: BP sitting or lying, pulse, respirations, temperature, height, weight, and general appearance.
Body areas (BA) include head (including face), neck, chest (including breasts and axillae), abdomen, genitalia, groin and buttocks, back, and each extremity.
Organ systems (OA) include, ophthalmologic (eyes), otolaryngologic (ears, nose, throat, and mouth), cardiovascular, respiratory, GI (gastrointestinal), GU (genitourinary), musculoskeletal, integumentary (skin), neurologic, psychiatric, and hematologic/lymphatic/ immunologic (blood, lymph, immunity).
Physical exam terms include:
Problem-focused—exam limited to the body area or organ system directly related to the chief complaint (1 BA or OS)
Expanded problem-focused—limited exam of the affected body area or organ system as well as any other symptomatic or related BA or OS (2–7 limited BA or OS)
Detailed—includes an extended exam of the affected body area and any other related, symptomatic BA or OS (2–7 extended BA or OS)
Comprehensive—the most extensive exam, includes either a complete single-specialty exam or a complete multisystem examination (8+ BA or OS)
Medical Decision Making
The most important key component in establishing an E/M code is the medical decision making (MDM), and it is probably the most difficult to document.
It is based on the complexity of the decision making by the provider about the patient’s care and diagnosis.
The three elements that must be documented to establish MDM include the following: number of diagnoses or management options (minimal, limited, multiple, or extensive); amount or complexity of data to be reviewed (none or minimal, limited, moderate, or extensive); and risk of complication or death if condition is untreated (minimal, low, moderate, or high).
Here we outline the complexity levels of medical decision making:
Straightforward MDM—there are minimal diagnosis and management options with no or a minimal amount or complexity of data to be reviewed and minimal risk to the patient of complication or death if the condition is left untreated.
Low-complexity MDM—there are a limited number of diagnoses and management options with a limited amount/complexity of data to be reviewed and low risk of complication or death if the patient is not treated
Moderate-complexity MDM—there are now multiple diagnoses and management options with a moderate amount and complexity of data to review. There is a moderate risk of complication or death to the patient if the condition is not treated.
High-complexity MDM—the physician has extensive diagnoses and management options with an extensive amount and complexity of data for review. The patient is at high risk for complication and/or death if not treated.
Three Contributory Factors in Assigning Codes
In addition to these three key components, some E/M codes take three contributory factors into consideration when codes are assigned.
The three contributory factors are:
Counseling. Counseling is considered as a component for E/M codes only when counseling is the reason for the encounter and constitutes 50% or more of the total time of the visit.
Coordination of care. The time the physician uses to coordinate patient care with other health-care agencies such as home care or nursing home care.
Nature of the presenting problem. This is another term for the severity of the patient’s chief complaint.
Minimal complaint is one that may not require the presence of a physician but for which service is provided under the physician’s supervision, such as a BP reading or dressing change.
Self-limited complaint is a minor problem that will run a “known” course and is transient in nature. A problem with a good prognosis when the patient is compliant may also be considered self-limiting.
Low-severity complaints are those with a low risk of morbidity and mortality (death) if there is no treatment. Full recovery is expected.
Moderate-severity complaints have a moderate risk of morbidity and mortality if there is no treatment. Prognosis is uncertain, and there is increased risk of impairment.
High-severity complaints are those of high to extreme risk. Risk of death is moderate to high, and there is a high risk of prolonged functional impairment.
Last, time is listed as a component to some codes after being incorporated in 1992 to assist with code choice.
The times listed are considered averages, and unless the code choice, such as with face-to-face contact codes, is based on time, time should not be considered a critical factor when choosing an E/M code.
Appendix C of the CPT code manual lists clinical examples of each E/M code type to assist you in choosing appropriate E/M codes for your provider.

9. Checkpoint LO 20.3 What are the three key components of an E/M code?
Learning Outcome:
20.3 List the types of E/M Codes within the CPT.
Instructor: Allow the class a few minutes to answer this checkpoint, and then ask a few students to share their answers with the class.

10. Surgical Coding Integumentary System Musculoskeletal System
Respiratory System
Cardiovascular System
Hemic/Lymphatic Systems and Mediastinum and Diaphragm
Digestive System
Urinary System
Male Genital System
Learning Outcome:
20.4 List the areas included in the Surgical Coding section.
Many insurance carriers cover the surgical procedures found in CPT as part of a surgical package.
Included in most surgical packages are the preoperative exam and testing, the surgical procedure itself, including local or regional anesthesia if used, and routine follow-up care for a set period of time.
Payers assign a fee to each of these packaged codes that pays for all the services provided in this package.
If other than local anesthesia is used, an anesthesia code would be used by the anesthesiologist billing for his services.
The period of time that is covered for follow-up care is called the global period.
During the global period, any care provided related to the surgical procedure is included in the surgical fee and cannot be billed separately; any attempt to do so is called unbundling and is considered fraud.
If a patient is seen for an unrelated problem, the service or procedure may be billed separately using a modifier for E/M services of for an unrelated surgical procedure taking place in a global period.
After the global period ends, additional services related to the initial surgery can be reported separately for payment.
To make the coding process more efficient, medical offices often list frequently used procedures and their applicable CPT codes on superbills or encounter forms.
After seeing the patient, the physician checks off the appropriate procedures or services, which the patient returns to the administrative medical assistant at the front desk, who inputs the information into the facility computer system if the office is computerized.
If the office uses a manual system, the administrative medical assistant will put the office copy of the completed superbill in a designated area so that it can be used to quickly and efficiently complete the CMS-1500 form for submission to the patient's insurance carrier.
Integumentary System
Integumentary subheadings are skin, subcutaneous and accessory structures, nails, pilonidal cyst, introduction, repair (closure), destruction, and breast.
These are further subdivided by the procedures done within each subheading.
Many codes in this section are based on size and location; choose carefully.
Carefully read instructions regarding closure of any removed or repaired lesion.
The instructions within the Integumentary section give great information as to how to choose the correct closure type.
Read everything carefully, and follow the instructions exactly.
Musculoskeletal System
The musculoskeletal codes start from the top of the body and work their way down within each section and subsection.
Casts and strappings as well as endoscopy and arthroscopy are also found in this chapter.
Probably the most common codes from this section include the fracture codes.
The following are a couple of straightforward rules:
A fracture treatment is closed unless stated otherwise; that is, treatment occurs without opening the skin. Open treatment means that surgery occurred to repair the fracture. Percutaneous treatment (fixation) immobilizes the fracture with hardware (pins) inserted using x-ray guidance.
Be careful with cast and strapping codes. Fracture repair assumes cast application and includes it. Cast application and removal for fractures are coded only when the physician applying or removing the cast did not initially treat the patient’s fracture.
Lastly, any therapeutic procedure (such as arthroscopy) includes the diagnostic procedure, so if a diagnostic procedure becomes a therapeutic (surgical) procedure, in the end, only the therapeutic procedure will be coded.
Respiratory System
The most important item to remember when coding the respiratory system is to code to the furthest extent of the procedure.
Be sure to also read information regarding the approach for the procedure.
Many procedures can be done via a scope (scopy) or as an open procedure using an incision (tomy); these procedures are very different, so be cautious when coding similar procedures using different approaches.
Be alert also for incision codes (cutting into—suffix: tomy) versus excision (removal—suffix: ectomy) and for the suffix plasty, signifying a repair procedure such as rhinoplasty.
You will find your terminology knowledge to be invaluable when coding.
Cardiovascular System
Cardiology coding consists of some of the more complicated coding scenarios.
Often, in order to completely code cardiovascular surgery, codes from the Cardiovascular Surgery section, Medicine section (for nonsurgical services), and Radiology section (for diagnostic or visualization assistance) will all be necessary.
When coding bypass procedures, read instructions carefully.
You must know not only whether veins or arteries (or both) are used in the bypass but also the correct coding sequence; the right codes in the wrong order will also hold up a claim.
Injection codes will be used for diagnostic and therapeutic procedures, and you will also find embolectomy and thrombectomy codes in this section.
Nonsurgical cardiography procedures include ECGs, Holter monitors, and exercise tests.
The echocardiography area includes all cardiac ultrasound procedures as well as vascular doppler procedures for noncardiac vascular areas, such as the extremities.
Read everything, and make sure to code procedures completely, using as many codes as necessary.
Hemic/Lymphatic Systems and Mediastinum and Diaphragm
These two short subsections of the Surgery section include procedures on the spleen, bone marrow, and lymph nodes as well as surgical procedures related to the mediastinum and diaphragm.
Coding in these sections is very straightforward as long as you read carefully.
Digestive System
The most common procedures found in the upper digestive system are incisions and excisions followed by repairs.
The lower digestive system (stomach, intestines, rectum) includes these as well as endoscopies (and laparorscopies).
As always, remember that therapeutic procedures include diagnostic procedures unless you are specifically instructed within the chapter that two codes may be used.
You will also find procedures on the liver, pancreas, biliary tract, abdomen, and peritoneum in this chapter.
Urinary System
The most “intense” coding in the urinary system revolves around the kidneys and renal function and treatment, including services for renal transplantation.
In addition to kidney procedures, you will find diagnostic (including urodynamics) and therapeutic procedures for the ureters, bladder, and urethra.
Read notes and code descriptions carefully to be sure to choose the correct approach.
Male Genital System
Because of the many repair codes associated with it, the subheading Penis is the largest within the Male Genital section.
Other procedure codes found throughout this chapter include excision, incision, biopsy, destruction (of lesions) including laser surgery (treatment for BPH and prostate cancer), and brachytherapy (radiotherapy).
The two codes for intersex surgery (male to female and female to male) are also found in this section.

11. Surgical Coding (continued)
Female Genital System/Maternity and Delivery
Endocrine System
Nervous System
Eye and Ocular Adnexa
Auditory System
Radiology
Medicine and Immunizations
Learning Outcome:
20.4 List the areas included in the Surgical Coding section.
Female Genital System/Maternity and Delivery
The codes found here are used almost exclusively by OB/GYN providers.
This chapter is set up from “the outside in,” starting with the introitus and moving to the ovaries within the pelvis, with a separate subsection devoted to labor and delivery.
There are many definitions and specialized guidelines for this chapter, but if you find yourself coding for the specialty of OB/GYN, read the entire chapter carefully, taking notes and highlighting important information.
Seeking the assistance of an experienced OB/GYN coder will be very helpful when you start out.
Endocrine System
Another short section, the endocrine system codes include those for procedures on the thyroid, parathyroid, thymus, adrenal glands, pancreas, and carotid body.
Procedures include incisions, excisions, and laparoscopies.
Nervous System
Codes describing procedures on the brain, spinal cord, and peripheral nerves are all found in this section.
Anatomic sites create the subheadings, which are subdivided by the procedure performed.
Because of the complicated nature of coding procedures related to this delicate system, there are multiple specialized guidelines found within this chapter.
The approach again is an important consideration when coding surgery on the brain (anterior, middle, or posterior cranial fossa), as is the definitive procedure that describes the procedure done to the lesion and the reconstruction or repair necessary at the end of the surgery.
Lumbar punctures, CSF shunt procedures for hydrocephalus treatment, and all treatments for spinal column and cord defects and peripheral nerve repair and destruction are found in this chapter.
Eye and Ocular Adnexa
Many of the procedures found here are highly specialized and require careful reading of instructions and guidelines.
The codes are divided by anterior and posterior segments, ocular adenexa, and conjunctiva (including the lacrimal system).
Procedures include incisions, excisions, repairs, destruction, and reconstructions.
Auditory System
The Auditory System section is divided into external ear diagnostics and treatments, middle ear diagnostics and treatments, and then inner ear diagnostics and treatments, followed by temporal bone procedures.
An operating microscope is necessary for many procedures, and code descriptions must be read carefully to avoid unbundling as some procedures include this component and others allow a separate code for its use.
Procedures include incisions (including “tubing” or tympanostomy), excisions, introductions, and repairs (tympanoplasty).
Radiology
The radiology section includes diagnostic radiology (imaging), diagnostic ultrasound, radiologic guidance, mammography, bone and joint procedures, radiation oncology, and nuclear medicine.
Many diagnostic radiology procedures use modifiers 26 (professional component) and TC (technical component); however, read descriptions carefully.
There are many instructions throughout this chapter leading you to correct code usage.
Read all includes and excludes instructions carefully.
Medicine and Immunizations
Injections and infusions of immune globulins, vaccines, toxoids, and other substances require two codes, one for giving the injection and one for the particular vaccine or toxoid that is given.
An E/M code is not used along with the codes for immunization unless a significant evaluation and management service is also performed and documented appropriately by the doctor.
Modifier 59 would be appended to the E/M code in this case, indicating the need for both procedures.

12. Checkpoint LO 20.4
What components are generally included in a surgical package?
Learning Outcome:
20.4 List the areas included in the Surgical Coding section.
Instructor: Allow the students a few moments to formulate an answer to this checkpoint. After a few minutes, ask a few students to share their answers with the class.

13. Using the CPT E/M Codes Alphabetic Index Modifiers
Range of Codes
Modifiers
Completing the CMS-1500 Form
Learning Outcome:
20.5 Locate a CPT code using the CPT manual.
Remember that when choosing E/M codes you must know whether the patient is a new or established patient as well as where the services took place.
The next step is to find the procedures and services provided by the office.
As with diagnosis codes, these may be found on the superbill, but remember to check the patient’s chart to verify that documentation on the procedures and services exists within the medical chart (if it is not written down, it did not happen).
When coding E/M codes, you may find it easiest to go directly to the E/M section in the front of the CPT manual to choose the correct code.
For all other procedures, you will need to use the alphabetic listing of procedures found in the back of the CPT manual.
The number or number range in the index to the right of the description represents the coding possibilities for the description.
If a hyphen is between two codes, this indicates a code range and each code in the range will need to be checked in the numeric index to choose the correct code.
Code numbers with commas between them indicate that there is more than one location possibility.
Again, all codes will have to be checked.
In some cases, the patient’s medical record may show an abbreviation, an eponym (a person or place for which a procedure is named), or a synonym.
The greater your knowledge of anatomy and physiology and terminology, the easier it will be for you to code.
Once you decide on the appropriate CPT code(s), the next step is to check for any applicable modifiers.
The use of modifiers can greatly enhance your reimbursement and can cut down on claim inquiries from the insurance carrier, but the ability to use modifiers correctly and proficiently will require practice.
Appendix A of the CPT manual contains all CPT modifiers, and many times the section guidelines also contain information regarding the use of modifiers within that section.
This is not an optional step.
Modifier use is required if there is one that is available for the situation.
Once all procedures and services have been assigned a CPT code and modifier as needed, carefully enter the 5-digit code(s) and modifiers in block 24d of the CMS-1500 form.
Remember that the primary procedure, often the one that is most labor-intensive or is the principal reason for the patient’s encounter, is listed first and is often matched with the appropriate diagnosis code, often the primary diagnosis, to demonstrate medical necessity for the insurance carrier.
After the principal procedure is listed, enter all other procedures provided to the patient during this date of service and match each with its appropriate diagnosis to verify its medical necessity as well.

14. Checkpoint LO 20.5
Why must each procedure be attached to a diagnosis code?
Learning Outcome:
20.5 Locate a CPT code using the CPT manual.
Instructor: Allow the students a few moments to formulate an answer to this checkpoint. After a few minutes, ask a few students to share their answer with the class.

15. HCPCS HCPCS Level I Codes HCPCS Level II Codes Learning Outcome:
20.6 Demonstrate how to locate a HCPCS code using the HCPCS coding manual.
The Healthcare Common Procedure Coding System, commonly referred to as HCPCS, was developed by the Centers for Medicare and Medicaid Services (CMS) for use in coding services for Medicare patients.
Today, in addition to their use for Medicare, some HCPCS codes are also accepted by Medicaid and private insurance programs.
To avoid claim denials due to an invalid or unacceptable code, be sure to check with the insurance carrier to see if it accepts HCPCS codes and, if so, which ones.
The HCPCS (pronounced “hic-picks”) coding system has two levels:
HCPCS Level I codes are more commonly known as CPT codes.
If CPT and HCPCS have identical descriptions, the HCPCS Level I (CPT) code should be used.
However, if CPT has a generic description and HCPCS has a more specific description, HCPCS Level II should be used.
HCPCS Level II codes, issued by CMS, are called national codes and cover many supplies, such as sterile trays, drugs, injections, and DME (durable medical equipment).
Level II codes also cover services and procedures not included in the CPT.
The HCPCS codes for Level II have 5 characters, either numbers, letters, or a combination of both.
At times there are also 2-character modifiers, either two letters or a letter with a number.
These modifiers are different from the CPT modifiers, but they may be used with CPT codes as well as with Level II codes.
Appendix 2 of the HCPCS manual gives a complete list of all HCPCS modifiers.
In medical offices where the HCPCS system is used, regulations issued by CMS are reviewed to determine the correct code and modifier for use on a particular payer’s claims.
Administrative medical assistants who code with the HCPCS manual find that the steps for coding with it mimic those of CPT, except that the alphabetic index is found in the front of the manual and the alphanumeric index is found toward the back of the manual.
The first step is to locate the description of the service, procedure, or item in the alphabetic index.
Once this is located, note the code(s) or code range given and move to that area of the alphanumeric index to verify the description.
Choose the code description that exactly matches the service, procedure, or item supplied, as documented in the medical record.
If you are coding medications that were supplied to the patient, you will find it easiest to locate the drug name in the Table of Drugs found in Appendix 1 of HCPCS.
This table lists the unit, route of administration, and appropriate "J" code.
Even though only one code is given, do not skip the step of verifying the information in the alphanumeric index.
Once all CPT and HCPCS codes are located and verified, enter them in Block 24d of the CMS-1500 form if your office is not computerized.
Otherwise, enter the codes in the appropriate area of the office medical billing software so that the information may be transmitted to the health insurance carrier electronically.

16. Checkpoint LO 20.6 What does HCPCS stand for? Learning Outcome:
20.6 Demonstrate how to locate a HCPCS code using the HCPCS coding manual.
Instructor: Allow the students a few moments to formulate an answer to this checkpoint. After a few minutes, ask a student to share his or her answer with the class.

17. Avoiding Fraud: Coding Compliance
Code Linkage
Insurance Fraud
Compliance Plans
Learning Outcome:
20.7 Explain the importance of code linkage in avoiding coding fraud.
Physicians have the ultimate responsibility for proper documentation and correct coding as well as for compliance with regulations, and many expect their administrative medical assistants to have working knowledge of this as well.
Administrative medical assistants help ensure maximum appropriate reimbursement for reported services by submitting correct health-care claims.
These claims, as well as the process used to create them, must comply with the rules imposed by federal and state law and with payer requirements.
Code Linkage
Clean claims are those in which each reported service is connected to a diagnosis that supports the procedure as necessary to investigate or treat the patient’s condition.
Insurance company representatives analyze this connection between the diagnostic and the procedural information, called code linkage, to evaluate the medical necessity of the reported charges.
The possible consequences of inaccurate coding and incorrect billing include:
Denied claims
Delays in processing claims and receiving payments
Reduced payments
Fines and other sanctions
Loss of hospital privileges
Exclusion from payers’ programs
Prison sentences
Loss of the physician’s license to practice medicine
To avoid errors, the codes on health-care claims are checked against the medical documentation.
A code review, also known as a coding audit, checks these key points:
Are the codes appropriate to the patient’s profile (age, gender, condition; new or established), and is each coded service billable?
Is there a clear and correct link between each diagnosis and procedure?
Have the payer’s rules about the diagnosis and the procedure been followed?
Does the documentation in the patient’s medical record support the reported services?
Do the reported services comply with all regulations?
Insurance Fraud
The majority involved in the delivery of health care are trustworthy persons devoted to patients’ welfare.
According to the Department of Health and Human Services (DHHS), in 1 year alone, the federal government recovered more than $1.3 billion in judgments, settlements, and other fees in health-care fraud cases.
Fraud is an act of deception used to take advantage of another person or entity.
Claims fraud occurs when physicians or others falsely represent their services or charges to payers.
A number of coding and billing practices are fraudulent.
Investigators reviewing physicians’ billings look for patterns like these:
Reporting services that were not performed
Reporting services at a higher level than was carried out
Performing and billing for procedures that are not related to the patient’s condition and therefore not medically necessary
Billing separately for services that are bundled in a single procedure code (unbundling)
Reporting the same service twice
Note that HIPAA calls for penalties for giving remuneration to anyone eligible for benefits under federal health-care programs.
The forgiveness or waiver of copayments may violate the policies of some payers; others may permit forgiveness or waiver if they are aware of the reasons for the forgiveness or waiver, such as the patient’s inability to pay (be sure to have documentation of such inability to avoid charges of discrimination).
Routine forgiveness or waiver of copayments or deductibles constitutes fraud when billing federal programs such as Medicare or TRICARE.
The physician’s practice should ensure that its policies on copayments are consistent with applicable law and with the requirements of their agreements with payers.
Compliance Plans
To avoid the risk of fraud, medical offices have a compliance plan to uncover compliance problems and correct them.
A compliance plan is a process for finding, correcting, and preventing illegal medical office practices.
Its goals are to:
Prevent fraud and abuse through a formal process to identify, investigate, fix, and prevent repeat violations relating to reimbursement for health-care services provided.
Ensure compliance with applicable federal, state, and local laws, including employment laws and environmental laws as well as antifraud laws.
Help defend physicians if they are investigated or prosecuted for fraud by showing the desire to behave compliantly and thus reduce any fines or criminal prosecution.
When a compliance plan is in place, it demonstrates to payers such as Medicare that honest, ongoing attempts have been made to find and fix weak areas of compliance with regulations.
The development of this written plan is led by a compliance officer and committee with the intention to (1) audit and monitor compliance with government regulations, especially in the area of coding and billing; (2) develop written policies and procedures that are consistent; (3) provide for ongoing staff training and communication; and (4) respond to and correct errors.
Although coding and billing compliance are the plan’s major focus, it covers all areas of government regulation of medical practices, such as equal employment opportunity (EEO) regulations and OSHA regulations.

18. Checkpoint LO 20.7 What is the purpose of a compliance plan?
Learning Outcome:
20.7 Explain the importance of code linkage in avoiding coding fraud.
Instructor: Allow the students a few moments to formulate an answer to this checkpoint. Then ask a student to share his or her answer with the class.

19. Summary
LO 20.1 The sections for the CPT manual are Evaluation and Management, Anesthesiology, Surgery, Radiology, Pathology and Laboratory, and Medicine, with code ranges from to
LO 20.2 The CPT manual general guidelines include the following symbols, each of which represents important information about the code being described: blue triangle, red dot, # sign, triangles facing each other, circle with a diagonal through it, lightning bolt, and bull’s eye, as well as add-on codes and modifiers. Always begin coding by looking up the description in the Alphabetic Index and verifying in the Tabular (numeric) Index. Carefully read all guidelines and information surrounding the codes.

20. Summary (continued)
LO 20.3 The E/M code types include office and other outpatient services, hospital observation, hospital inpatient, consultations, ED services, critical care, nursing facility, domiciliary and rest home services, domiciliary and assisted-living services, home care plan oversight, home services, prolonged services, case management, care plan oversight, preventative medicine, non-face-to-face physician services, special E/M, newborn care, neonatal ICU and critical care services, and other E/M services.
LO 20.4 Surgical coding sections include integumentary, musculoskeletal, respiratory, cardiovascular, digestive, urinary, male and female genital systems, endocrine, nervous, eye and ear, radiology, pathology and lab, and medicine.

21. Summary (continued)
LO 20.5 Student answers will vary depending upon the information (encounter forms or mock medical records) they are given to practice coding with the CPT manual. They should be able to select an accurate code for simple, straightforward coding scenarios.
LO 20.6 Student answers will vary depending upon the information (encounter forms or mock medical records) they are given to practice coding with the HCPCS manual. They should be able to select an accurate code for simple, straightforward coding scenarios.
LO 20.7 Code linkage demonstrates the medical necessity of services provided to the patient by accurately linking each procedure code to its appropriate diagnosis. All procedures, services, and diagnoses must be documented in the patient’s medical record to be used on any health insurance claim form.