CHAPTER 16 Medical Coding © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-2 Learning Outcomes 16.1 Explain the purpose and format of the ICD-9CM volumes that are used by medical offices 16.2 Describe how to analyze diagnoses and locate correct codes using the ICD-9-CM 16.3 Identify the purpose and format of the CPT 16.4 Name three key factors that determine the level of Evaluation and Management codes that are selected © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-3 Learning Outcomes (cont.) 16.5 Identify the two types of codes in the Health Care Common Procedure Coding System (HCPCS) 16.6 Describe the process used to locate correct procedure codes using CPT 16.7 Explain how medical coding affects the payment process 16.8 Define fraud and provide examples of fraudulent billing and coding © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-4 Introduction • Medical coding – Translation of medical terms for diagnoses and procedures into code numbers from standardized code sets – Tells payers that the services provided • Were medically necessary • Complied with payer’s rules • Accurate claims bring maximum appropriate reimbursement for the medical office © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-5 Diagnosis Codes: The ICD-9-CM Patient Chief Complaint Physician Medical Diagnosis Insurance Diagnosis Code The diagnosis codes are found in the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9) The use of ICD-9 codes in health care is mandated by HIPAA for reporting:  Patient’s diseases  Conditions  Signs and symptoms © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-6 The ICD-9-CM • Alphabetic Index (Volume 2) – Diagnoses appear in alphabetical order – The index is organized by condition – Use initially to look up conditions – Cross-references • Look up term that follows “see” The Alphabetical Index is never used alone to find a diagnosis code because it does not contain all the necessary information © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-7 The ICD-9-CM (cont.) • Tabular List (Volume 1) – Diagnoses appear in numerical order – Listing is organized according to source or body system Code Structure  Codes are made up of three, four, and five digits and a description  Three-digit categories are used for diseases, injuries, and symptoms  Categories are further divided into four- and five-digit codes © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-8 The ICD-9-CM (cont.) V Codes • Supplementary classification of factors influencing health status and contact with health services • Identify encounters for reasons other than illness or injury • May be a primary code or additional code E Codes • “E” – external • Identify external causes of injuries and poisoning resulting from environmental events • Never used alone as a diagnostic code © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-9 ICD-9-CM Conventions A list of abbreviations, punctuation, symbols, typefaces, and notes that provide guidelines for using the code set Conventions [] NOS NEC ( ) Brackets are used around synonyms, alternate wording, or explanations An abbreviation that means “not otherwise specified” or “unspecified” An abbreviation that means “not elsewhere classified”; used when the ICD-9 does not provide a specific code to describe the patient’s condition Parentheses are used around alternative wording © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-10 ICD-9-CM Conventions (cont.) Conventions §}: Excludes Includes Used in the Tabular Listis Indicates that the footnote Indicates that the entry Brace encloses aofseries Refines content after an incomplete is toasall notapplicable classified partterm of the of preceding terms entry subdivisions in that code preceding code © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-23 Apply Your Knowledge The insurance representative has questioned the codes listed on three patient forms that were submitted last year When re-checking these forms the office medical assistant should: Excellent! ANSWER: a Use the current book to validate accuracy of the codes b Use last year’s book to validate accuracy of the codes c Use next year’s book to validate accuracy of the codes © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-24 HCPCS • The Health Care Common Procedure Coding System – Developed by the Centers for Medicare and Medicaid Services (CMS) – Pronounced “hic-picks” © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-25 HCPCS (cont.) • Contains two levels – Level I codes • Duplicate CPT codes – Level II codes • National codes for supplies and DME (durable medical equipment) • characters – numbers, letters, or a combination of both • Can have modifiers © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-26 Using the CPT • Become familiar with guidelines and notes for each section • Find the procedures and services provided by the office • Determine appropriate codes and modifiers • Enter codes and modifiers on CMS-1500 form © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-27 Using the CPT (cont.)    Match procedure with diagnosis Carefully record procedure codes on health-care claim Determine appropriate modifiers   Look up procedure code(s) in the alphabetic index of the CPT manual Locate services documented © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-28 Apply Your Knowledge What are HCPCS Level II codes and who issues them? ANSWER: HCPCS Level II codes are national codes used for supplies, DME, and services not included in the CPT They are issued by Centers for Medicare and Medicaid Services (CMS) © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-29 Coding Compliance • Compliance with federal and state law and payer requirements is mandatory Code Linkage Diagnostic Procedures A process used by insurance company representatives to evaluate the necessity of medical procedures reported based on the patient’s diagnosis Prevent errors in coding and incorrect billing by careful attention to details © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-30 Insurance Fraud • Investigators look for patterns such as – Reporting services that were not performed – Reporting services at a higher level – Performing and billing for procedures not related to the patient’s condition and therefore not medically necessary – Billing separately for services that are bundled in a single procedure code – Reporting the same service twice © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-31 Compliance Plans • Medical offices establish a process for finding, correcting, and preventing illegal medical practices • Goals of compliance plan – Prevent fraud and abuse – Ensure compliance with applicable laws – Help defend physicians if investigation occurs © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-32 Compliance Plans (cont.) • Plan demonstrates to payers honest, ongoing attempts to correct any weak areas of compliance • Plan is developed by a compliance officer and committee who also: – Audit and monitor compliance – Develop written policies and procedures that are consistent with regulations and laws – Provide ongoing communication and training to staff – Respond to and correct errors © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-33 Apply Your Knowledge What are the goals of a compliance plan and what does having a plan indicate? ANSWER: The goals of a compliance plan are to prevent fraud and abuse, ensure compliance with applicable laws, and to help defend physicians if an investigation occurs Having a plan indicates that the medical office is making honest, ongoing attempts to find and fix weak areas of compliance Correct! © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-34 In Summary 16.1 The purpose of the ICD-9 manual is to find diagnosis codes for patients’ medical conditions It is formatted with the Alphabetic Index and the Tabular List 16.2 To analyze diagnoses, think about the condition and not the body part; then think about the location This will assist you in finding the correct codes much more easily 16.3 The CPT-4 is used for locating medical procedure codes It is organized from Evaluation/Management (E/M) to Medicine © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-35 In Summary (cont.) 16.4 The three levels that determine E/M service are extent of patient history taken, extent of exam conducted, and complexity of the medical decision making 16.5 The two types of HCPCS codes are Level I codes (also called CPT codes) and Level II codes, issued by CMS 16.6 In locating a procedure code, you first become familiar with the format and guidelines For further information on completing this process, see Procedure 16.3 © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-36 In Summary (cont.) 16.7 Diagnosis and procedure coding must be directly linked when reporting for reimbursement because payers analyze this connection to determine the medical necessity for the charge 16.8 Insurance fraud is an act of deception used to take advantage of another entity An example of billing and coding fraud is when a physician reports services that were not performed © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed 16-37 End of Chapter 16 Things gained through unjust fraud are never secure ~ Sophocles © 2011 T he McGraw -Hill Com panie s, Inc A ll rights reserv ed