1. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 18 Medical Insurance Coding

2. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Insurance Coding Systems Overview Coding –Process of translating written or spoken description of diseases, injuries, medical procedures, services, supplies into numeric or alphanumeric format Current Procedural Terminology (CPT) Developed by American Medical Association (AMA) Used to code medical procedures

3. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Insurance Coding Systems Overview Healthcare Common Procedure Coding System (HCPCS) –Developed by Medicare –Procedures not defined with sufficient specificity

4. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Insurance Coding Systems Overview International Classification of Diseases, 9th Revision, Clinical Modification (ICD- 9-CM) –Developed by World Health Organization (WHO) –Classify all known diseases and disorders –Diagnostic and procedure coding –(ICD-10-CM) in process of being finalized

5. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Insurance Coding Systems Overview International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) –Deadline for implementation is October 1, 2014 –Codes will include more detailed descriptions of medical conditions –Number of codes will increase from 14,000 to 69,000 –ICD-10-PCS is the inpatient hospital procedural coding system

6. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Procedures Adhere to ethical standards and legal practices Diagnostic and procedural codes supported by documentation in patient’s chart Maintain coding skills through CE and networking

7. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Procedures CPT manual organization and use –Code medical procedures and services –To determine CPT code, turn to Category I section –Select section that constitutes classification of procedure being coded –Select name of procedure or service that identifies what you are looking for

8. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Procedures CPT manual organization and use –When using unlisted code, special report submitted with insurance claim form to avoid denial or rejection –Evaluation and management section: takes every possible combination of visits into consideration and assigns each its own number

9. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Procedures CPT manual organization and use –Anesthesia section: all codes for anesthesia required for any procedure –Surgery section: codes according to body system –Radiology section: each procedure done and each specific alteration to procedure –Pathology and laboratory section: every test and combination of laboratory tests; section on surgical pathology

10. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Procedures CPT manual organization and use –Medicine section: codes for immunizations, injections, dialysis, allergen immunotherapy, chemotherapy, ophthalmologic; cardiovascular, pulmonary, neurological procedures; invasive and noninvasive –Index listing every procedure alphabetically

11. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Procedures Modifiers –Service or procedure needs to be modified or altered –Indicates unusual procedural services –Listed inside front cover of CPT code book and Appendix A –HCPCS code book

12. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Healthcare Common Procedure Coding System (HCPCS) Codes used as supplements to basic CPT system Required when reporting services and procedures provided to Medicare and Medicaid beneficiaries HCPCS uses basic system Level I

13. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Healthcare Common Procedure Coding System (HCPCS) Level II codes –Enables provider to report non-provider services Durable medical equipment, supplies and medications, ambulance service Level III codes –Defined by Medicare regional Part B carriers

14. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding of Medical Diagnoses ICD-9-CM manual organization and use –Broken into three volumes (I-III) –External cause codes (E codes) –Supplementary health factor codes (V codes) –Morphology codes (M codes) –Code references NEC: “not elsewhere classified” NOS: “not otherwise specified”

15. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding Accuracy Imprecise coding can affect how quickly provider reimbursed and amount of reimbursement Insurance carriers down-code if documentation or codes ambiguous Up-coding: code creep, over-coding, overbilling

16. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding Accuracy Bundled code: grouping of several services directly related to specific procedure and paid as one Unbundling: separating components of procedure; report billable codes with charges to increase reimbursement rates

17. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding Accuracy Incorrect coding can be a problem with ruling out a diagnosis Be as precise as possible Do not guess Do not code what is not there

18. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coding the Claim Form Encounter form –Information translated to claim form CMS-1500 (08-05) –Form accepted by all insurance carriers –CPT codes for procedures performed –ICD-9-CM codes for diagnoses –Complexity, diagnosis, procedures performed of visit –Many EHRs use encoder programs

19. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Third-Party Guidelines Patient and provider enter into contract for specific services when appointment scheduled –First party: person receiving contracted service –Second party: person or organization providing service –Third party: involved with reimbursement procedures

20. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Third-Party Guidelines Confidentiality issues Compliance with HIPAA regulations HIPAA as it relates to PHI “Authorization to Release Medical Information” statement

21. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Third-Party Guidelines Authorization exceptions allowed by federal government –Medicaid –Workers’ Compensation –Hospital admission

22. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Completing the CMS-1500 (08-05) Completed using data from patient’s EHR or paper encounter form Contains all of identification information carrier needs to process or analyze claim for payment

23. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Completing the CMS-1500 (08-05) Uniform Bill 04 Form (UB-04) –Accommodates reporting National Provider Identifier (NPI) number –Must be used by all HIPAA-covered entities

24. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Completing the CMS-1500 (08-05) Using the computer to complete forms –CMS-1500 (08-05) claim form designed to accommodate optical scanning of paper claims –Administrative Simplification Compliance Act (ASCA) –Paper claims submitted to Medicare will not be paid

25. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Completing the CMS-1500 (08-05) Errors in completing claim forms –Eliminate typographic errors –Eliminate incorrect information –Verify all blanks completed accurately –Verify each procedure links correctly with correct diagnosis –Verify procedure medically necessary

26. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Completing the CMS-1500 (08-05) Errors in completing claim forms –Include patient’s name and policy identification information on each page –Do not use staples –Verify printer alignment properly –Be sure claim form signed appropriately

27. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Benefits of Submitting Claims Electronically Ensures consistency, reducing errors Exchange electronic data with multiple payers using same data format Supplies required and administrative costs reduced Cash flow significantly improved

28. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing the Claims Process Documentation of referrals –Referral preapproved by plan Point-of-service device –Immediate and direct access to patient eligibility information and managed care functions through electronic network –Connects medical office and health plan’s computer

29. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing the Claims Process Maintaining a claims registry –Keep diary or register of submitted claims Following up on claims –Claim register enables office to keep track of progress of claims –MA may need to investigate cause of error and submit revised claim

30. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Insurance Carrier’s Role Coverage in force at time of treatment Provider contracted with insurance carrier No exclusions or restrictions on policy for payment of diagnosis

31. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Insurance Carrier’s Role No preexisting condition restrictions Diagnosis and procedures done are medically necessary and reasonable Customary and reasonable fees

32. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Insurance Carrier’s Role Explanation of benefits (EOB) –Sends to insured –Some EOB forms serve as “bill” or “notice”

33. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Legal and Ethical Issues Issues of insurance fraud and abuse must be understood –Coding errors pose legal and ethical issues –Compliance programs –Help prevent violations that can be costly –May carry criminal penalties for provider and office personnel