Chapter 06 Procedural Coding

1. Insurance Handbook for the Medical Office 13th edition Chapter 06 Procedural Coding

2. Basics of Procedural Coding Explain the purpose and importance of coding for professional services. Define terminology used in Current Procedural Terminology (CPT). Demonstrate an understanding of CPT code conventions. Describe various methods of payment by insurance companies and state and federal programs. Describe the process in which the Healthcare Common Procedure Coding System (HCPCS) and relative value studies (RVS) are used to create a fee schedule. Lesson 6.1

3. Basics of Procedural Coding (cont’d) Interpret the meaning of CPT code book symbols. Identify the complexity of evaluation and management (E/M) services codes. Compare a surgical package and a Medicare global package. Explain various types of code edits. Lesson 6.1

4. 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

5. Current Procedural Terminology • Five-digit system for coding services • Two-digit add-on modifiers • Represents diagnostic and therapeutic services • System of choice from CMS

6. 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

7. 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)

8. 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

9. Usual, Customary, and Reasonable

10. 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

11. Resource-Based Relative Value Scale

12. Code Book Symbols

13. Evaluation and Management Section • Divided into three sections • Office visits • New patients • Established • Hospital visits • Initial visit • Subsequent visits • Consultations

14. Evaluation and Management Section • Elements of E/M codes • History • Examination • Medical decision-making • Nature of presenting problem • Counseling • Coordination of care • Time

15. Evaluation and Management Section • Subsections of E/M • Hospital inpatient services • Consultation • Critical care • Pediatric and neonatal critical care • Emergency care • Preventative medicine

16. 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

17. Evaluation and Management Section

18. Evaluation and Management Section CPT Code Digit Analysis

19. Evaluation and Management Section Code Selection Criteria for Consultation

20. Evaluation and Management Section E/M Levels

21. 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

22. 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)

23. Surgery Section Surgical Package vs. Medicare Global Package

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. Code Monitoring

31. Practice Diagnostic Coding Explain how to choose accurate procedural codes for descriptions of services and procedures documented in a patient’s medical record. Explain correct usage of modifiers in procedure coding. Lesson 6.2

32. 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

33. Helpful Hints in Coding • Drugs and injections • Name, amount, dosage, strength, how it was administered • Roster billing for mass immunizations for Medicare patients

34. 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

35. 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

36. 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

37. Code Modifiers Modifier -58: Stages or Related Procedure Modifiers -62, -66, -80, -81: More Than One Surgeon Modifier -99: Multiple Modifiers

38. 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

39. Questions?