CHAPTER 5

1. Procedural Coding: CPT and HCPCS CHAPTER 5

2. See the ten-step Revenue Cycle figure (at the beginning of the chapter). • This chapter focuses on the following steps: • Preregister patients • Establish financial responsibility • Check in patients • Review coding compliance • Review billing compliance • Check out patients • Prepare and transmit claims • Monitor payer adjudication • Generate patient statements • Follow up payments and collections Chapter 5Procedural Coding: CPT and HCPCS

3. When you finish this chapter, you should be able to: 5.1 Explain the CPT code set. 5.2 Describe the organization of CPT. 5.3 Summarize the use of format and symbols in CPT. 5.4 Assign modifiers to CPT codes. 5.5 Apply the six steps for selecting CPT procedure codes to patient scenarios. 5.6 Explain how the key components are used in selecting CPT Evaluation and Management codes. Learning Outcomes (1)

4. When you finish this chapter, you should be able to: 5.7 Explain the physical status modifiers and add-on codes used in the Anesthesia section of CPT Category I codes. 5.8 Differentiate between surgical packages and separate procedures in the Surgery section of CPT Category I codes. 5.9 State the purpose of the Radiology section of CPT Category I codes. 5.10 Code for laboratory panels in the Pathology and Laboratory section of CPT Category I codes. Learning Outcomes (2)

5. When you finish this chapter, you should be able to: 5.11 Code for immunizations using the Medicine section CPT Category I codes. 5.12 Contrast Category II and Category III codes. 5.13 Discuss the purpose of the HCPCS code set and its modifiers. Learning Outcomes (3)

6. Key Terms (1) • add-on code • bundled payment • bundling • Category I codes • Category II codes • Category III codes • consultation • Current Procedural Terminology (CPT) • durable medical equipment (DME) • E/M codes (evaluation and management codes) • fragmented billing • global period • global surgery rule • Healthcare Common Procedure Coding System (HCPCS) • key component • Level II • Level II modifiers • modifier • never event • outpatient

7. Key Terms (2) • panel • physical status modifier • primary procedure • professional component (PC) • resequenced • section guidelines • separate procedure • special report • surgical package • technical component (TC) • unbundling • unlisted procedure

8. Current Procedural Terminology (CPT)—contains the standardized classification system for reporting medical procedures and services • Category I codes—five-digit procedure codes found in the main body of CPT • Category II codes—optional CPT codes that track performance measures • Category III codes—temporary codes for emerging technology, services, and procedures • Updates • Can be purchased from the AMA • Announced on October 1 and go into effect January 1 5.1 Current Procedural Terminology,Fourth Edition (CPT)

9. Category I (in the main part of the reference) contains six sections of procedure codes (Table 5.1): • Evaluation and Management • Anesthesia • Surgery • Radiology • Pathology and Laboratory • Medicine 5.2 Organization (1)

10. To assign a code, start by looking up the main term in the Index (similar to the procedure for looking up ICD codes) • The Index (see Figure 5.1) • Listed alphabetically Main Terms and Modifying Terms • Name of procedure or service • Name of organ or body part • Name of condition • Synonym or eponym • Abbreviation • Code Ranges—separated by a comma or hyphen • Cross Reference—indicated by “see” • Typographic Conventions—articles (a, the, etc.) left out to save space 5.2 Organization (2)

11. After looking up procedures and services in the Index, verify them in the Main Text (similar to the procedure for verifying a code in the ICD Tabular List) • The Main Text • Listed numerically • Section guidelines—usage notes at the beginning of CPT sections • Unlisted procedure—service not listed in CPT; requires that a special report be submitted in addition to the health claim form • Special report—note explaining the reasons for a new, variable, or unlisted procedure or service 5.2 Organization (3)

12. The Appendixes • A—Modifiers • B—Summary of Additions, Deletions, and Revisions • C—Clinical Examples • D—Summary of CPT Add-on Codes • E—Summary of CPT Codes Exempt from Modifier 51 • F—Summary of CPT Codes Exempt from Modifier 63 • G—Summary of CPT Codes That Include Moderate (Conscious) Sedation • H—Alphabetical Clinical Topics Listing 5.2 Organization (4)

13. The Appendixes • I—Genetic Testing Code Modifiers • J—Electrodiagnostic Medicine Listing of Sensory, Motor, and Mixed Nerves • K—Product Pending FDA Approval • L—Vascular Families • M—Renumbered CPT Codes—Citations Crosswalk • N—Summary of Resequenced CPT Codes • O—Multianalyte Assays with Algorithmic Analyses 5.2 Organization (5)

14. Format: • Semicolons and indentions--used when a common part of a main entry applies to entries that follow • Cross-References--Some codes and descriptors are followed by indented “see” or “use” entriesinparentheses, which refer the coder to other codes • Descriptors often contain clarifying examples in parentheses, sometimes with the abbreviation “e.g.” 5.3 Format and Symbols (1)

15. Symbols used in CPT: ● (a bullet or solid circle) indicates a new procedure code ▲ (a triangle) indicates the code’s descriptor has changed ►◄ (facing triangles) enclose new or revised text other than the code’s descriptor + (a plus sign) next to a code in the main text indicates an add-on code; such a code describes secondary procedures carried out in addition to a primary procedure (look for the phrase “each additional” or “list separately in addition to the primary procedure”) • can only be a secondary code--never used as the primary procedure 5.3 Format and Symbols (2)

16. Symbols used in CPT (continued): (a bullet in a circle) next to a code means conscious sedation is a part of the procedure the surgeon performs  (a lightning bolt) is used for codes for vaccines that are pending FDA approval # (a number sign) indicates a resequenced code • Resequenced—CPT procedure codes reassigned to another sequence Note: CPT symbols are found at the bottom of each page of the manual, as well as in the introduction to the manual. 5.3 Format and Symbols (3)

17. Primary procedure—most resource-intensive CPT procedure during an encounter • Secondary procedure—additional procedure performed • Conscious sedation—moderate, drug-induced depression of consciousness • Add-on code—procedure performed and reported in addition to a primary procedure 5.3 Format and Symbols (4)

18. A CPT modifier is a two-digit number that may be attached to most five-digit procedure codes (see Table 5.2) • Modifiers communicate special circumstances involved with procedures and change the meaning of the original procedure code • A procedure has two parts: • Technical component (TC)—reflects the technician’s work and the equipment and supplies used in performing it • Professional component (PC)—represents a physician’s skill, time, and expertise used in performing it 5.4 CPT Modifiers

19. Six steps for selecting CPT procedure codes: • Review complete medical documentation • determine what procedures or services were performed and where the encounter took place • Abstract the medical procedures from the visit documentation • Identify the main term for each procedure (procedure, location, common abbreviation, symptom, or eponym) • Locate the main terms in the CPT (alphabetic) Index • Verify the code in the CPT (numeric) main text • Determine the need for modifiers (check guidelines) Note: During the billing process, the codes for each day’s services are listed on the claim in order of highest to lowest reimbursement. 5.5 Coding Steps

20. E/M codes (evaluation and management codes) • Codes that cover physicians’ services performed (not procedures or treatments) to determine the best course for patient care (See Table 5.3) • Services include • office visit • hospital service • preventive medicine visits • Listed first in the CPT manual (out of number order) because used most often • Financial value (fee) assigned to each code 5.6 Evaluation and Management Codes (1)

21. Structure • Organized by place of service (POS) and type of patient (new or established) • New vs. Established Patient • Established patient—has received services within three years • New patient—has not received services from the provider within the past three years • New patient codes pay at a higher rate due to increased effort by the provider 5.6 Evaluation and Management Codes (2)

22. Consultation—service in which a physician advises a requesting physician about a patient’s condition and care • Note: Medicare no longer pays consult codes • Referral—total or partial care transferred to another provider 5.6 Evaluation and Management Codes (3)

23. Key component--factor documented for various levels of evaluation and management services • Key components for selecting E/M codes: • The extent of the history documented • The extent of the examination documented • The complexity of the medical decision-making • When the patient is new, all three key components must be met • When the patient is established, two of the three must be met. 5.6 Evaluation and Management Codes (4)

24. E/M Code Selection—eight steps: 1. Determine the category and subcategory of service based on the place of service and the patient’s status 2. Determine the extent of the history that is documented 3. Determine the extent of the examination that is documented (see Table 5.5) 4. Determine the complexity of medical decision making that is documented 5. Analyze the requirements to report the service level (new vs. established) 6. Verify the service level based on the nature of the presenting problem, time, counseling, and care coordination 7. Verify that the documentation is complete 8. Assign the code 5.6 Evaluation and Management Codes (5)

25. Reporting E/M Codes on Claims • Outpatient—patient who receives healthcare in a clinic, doctor’s office, or hospital setting without admission for up to 24 hours • Inpatient—patient who receives healthcare in a hospital setting with admissionfor more than 24 hours (initial hospital care code range is 99221-99223) • Emergency Department Services—code range 99281 to 99288 • New or established patient—same code range • Time is not a factor • Preventive Medicine Services (immunizations, annual physical exam, etc.)—starts with code 99381 5.6 Evaluation and Management Codes (6)

26. Codes in the Anesthesia section are used to report anesthesia services performed or supervised by a physician • General, regional, or local anesthesia • Code includes the complete services of an anesthesiologist • Preoperative visits, care during procedure, and routine postoperative care • Organized by body site 5.7 Anesthesia Codes (1)

27. Modifiers used with anesthesia codes: • Standard modifiers • Physical status modifiers--used with procedure codes to indicate a patient’s health status • Patient’s health status is selected from this list: • P1: Normal healthy patient • P2: Patient with mild systemic disease • P3: Patient with severe systemic disease • P4: Patient with severe systemic disease that is a constant threat to life • P5: Moribund patient who is not expected to survive without the operation • P6: Declared brain-dead patient whose organs are being removed for donor purposes 5.7 Anesthesia Codes (2)

28. Surgery codes are used for surgical procedures performed by physicians • Organized by body system and then body site • Surgical package (or global surgery rule)– combination of services included in a single procedure code. One surgical package includes: • E/M preoperative services • Local infiltration or topical anesthesia • Immediate postoperative care • Writing orders • Postanesthesia patient evaluation • Typical postoperative follow-up care 5.8 Surgery Codes (1)

29. Global period—days surrounding a surgical procedure when all services relating to the procedure are considered part of the surgical package Separate procedure—descriptor used for a procedure that is usually part of a surgical package but may also be performed separately Bundling—using a single payment for two or more related procedure codes Bundled payment—single payments to multiple providers involved in an episode of care, in which accountability is shared among providers 5.8 Surgery Codes (2)

30. Modifiers—used to indicate special circumstances involved with surgical procedures • Reporting Sequence–the most complex or highest-level code (procedure with the highest reimbursement value) should be listed first • Unbundling—incorrect billing practice of breaking a panel or package of services/procedures into component parts • may result in a denied claim and an audit • Fragmented billing—incorrect billing practice in which procedures are unbundled and separately reported 5.8 Surgery Codes (3)

31. The Radiology section of CPT contains codes reported for radiology procedures either performed by (or supervised by) a physician • Listed by type of procedure followed by body site • Radiology codes follow the same types of guidelines as noted in the Surgery section • Contain a technical component and a professional component • “Unlisted” codes require a special report • “With contrast”—contrast materials are given in the patient’s veins or arteries to help highlight the area 5.9 Radiology Codes

32. Complete pathology/laboratory procedure includes: • Ordering the test • Taking and handling the sample • Performing the test • Analyzing and reporting test results • Cover services provided by physicians or by technicians under the supervision of physicians • Panel—bundled codes (single code, grouping laboratory tests frequently done together) • To report a panel code, all the indicated tests must have been done, and any additional test is coded separately 5.10 Pathology and Laboratory Codes

33. Medicine Codes--used for the many types of evaluative, therapeutic, and diagnostic procedures performed by physicians • Ancillary services—services used to support a diagnosis • Reporting Medicine Codes • Immunizations require two codes from the Medicine section, one for administering the immunization and the other for the particular vaccine or toxoid that is given • Injections require two codes—one for the injection, one for the substance that is injected 5.11 Medicine Codes

34. Category II and Category III codes • Optional supplemental tracking codes to collect data for services such as prenatal care and counseling • Five characters—four numbers and a letter • Do not affect reimbursement • Category II codes are for tracking performance measures to improve patients’ health • Category III codes are temporary codes for new procedures that may enter the Category I code set if they become widely used in the future 5.12 Category II and Category III Codes

35. The Healthcare Common Procedure Coding System (HCPCS)—procedure codes for Medicare claims • Maintained by CMS, but used by many private payers • Gives providers a standardized coding system that describes specific products, supplies, and services that patients receive • HCPCS is technically made up of two sections of procedural codes: • Level I, the CPT (covered on previous slides) • Level II Codes—(see Table 5.6) • national codes that identify supplies, products, and services not in Level I 5.13 Overview of HCPCS

36. Level II codes (“HCPCS” national codes) • Five characters (a letter and four numbers) • Include a Tabular List • Can be used in conjunction with CPT codes • Include durable medical equipment codes • Durable medical equipment (DME) • Reusable physical supplies ordered by the provider for home use • Can withstand repeated use • Primarily and customarily used for a medical purpose • Generally not useful to a person in the absence of an illness or injury • Appropriate for use in the home Level II Codes

37. CMS HCPCS Workgroup--government committee that maintains the Level II HCPCS code set • Maintains the permanent national codes • Temporary national codes—HCPCS Level II codes available for use but not part of the standard code set; may become permanent codes Permanent Versus Temporary Codes

38. Electronic: Annual updates to HCPCS codes are released on the CMS HCPCS website, effective for use January 1 of each year • Interim updates for temporary codes are also found on the CMS HCPCS website • www.cms.gov/HCPCSReleaseCodeSets/ • Hard copy: Annual HCPCS code books are published as a code reference HCPCS Updates

39. Correct HCPCS coding follows the same general guidelines as ICD-10-CM and CPT coding • Look up name of supply or item in Alphabetic Index • Verify the code in the HCPCS Level II Tabular List • Check symbols to indicate change in code • Review description of quantity • Note method of distribution and dosage for prescription medication • Use Level II modifiers (HCPCS national code set modifiers) to provide additional information (Table 5.7) • Attach modifier for never event if reporting a physician error such as procedure on wrong body part • Never event—situation for which a policy never pays a provider Coding Steps

40. Some procedures will need CPT and HCPCS codes • Look for symbols/conventions that direct the coder to Medicare billing rules • Example: • In addition to printed material, Medicare resources are available online • Use these resources to look up special coverage instructions HCPCS Billing Procedures