FOREWORD... iii. DISCLAIMER... iv. THE AUTHOR...v INTRODUCTION...1 TERMINOLOGY...3 CPT & HCPCS FUNDAMENTALS...33

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1 CONTENTS FOREWORD... iii DISCLAIMER... iv THE AUTHOR...v INTRODUCTION...1 TERMINOLOGY...3 CPT & HCPCS FUNDAMENTALS...33 What is CPT?...33 What is HCPCS?...34 Key points regarding CPT & HCPCS Structure of the CPT Coding System...35 Structure of the HCPCS Coding System...35 How to Use the CPT Coding System...37 Format and conventions...37 Guidelines...38 Modifiers...38 Appendices...38 CPT Index...40 How to Use the HCPCS Coding System...42 Format and conventions...43 Guidelines...43 HCPCS Level II Modifiers...43 Coding rules for HCPCS...43 Medical and surgical supplies...44 HCPCS code overlap...44 Format of HCPCS codes...44 EXERCISE 1: CPT & HCPCS FUNDAMENTALS...44 GENERAL CODING & BILLING ISSUES...47 Supporting Documentation...47 Special Medicare Considerations...48 Bilateral Modifier Usage...48 Unlisted Procedures Or Services...48 CPT Changes, Additions And Deletions...49 vii

2 MEDICAL PROCEDURE CODING MADE EASY! HCPCS Changes, Additions And Deletions...50 Starred Procedures...52 Definition of New Versus Established Patient...52 Place (Location) Of Service...53 Hospital Care...53 Hospital Discharge...54 EXERCISE 2: CODING & BILLING ISSUES, PART Referral...55 Separate Or Multiple Procedures...55 Multiple Surgical Procedures...56 Consultations...56 Emergency Services...56 Supplies And Materials Provided by the Physician...57 Procedure Down-Coding...59 Purchased Diagnostic Services...60 CPT Modifiers...61 HCPCS Modifiers...67 EXERCISE 3: CODING & BILLING ISSUES, PART ANATOMICAL ILLUSTRATIONS...83 Plate 1 Skin And Subcutaneous Tissue Male...87 Plate 2 Skin And Subcutaneous Tissue Female...89 Plate 3 Skin And Subcutaneous Tissue Female Breast...91 Plate 4 Muscular System Anterior View...93 Plate 5 Muscular System Posterior View...95 Plate 6 Shoulder And Elbow Anterior View...97 Plate 7 Hand And Wrist...99 Plate 8 Hip And Knee Plate 9 Foot And Ankle Plate 10 Skeletal System Anterior View Plate 11 Skeletal System Posterior View Plate 12 Vertebral Column Lateral View Plate 13 Respiratory System Plate 14 Heart External And Internal Views Plate 15 Vascular System Plate 16 Digestive System Plate 17 Urinary System Plate 18 Male Reproductive System Plate 19 Female Reproductive System viii

3 CONTENTS Plate 20 Female Reproductive System Pregnancy, Lateral View Plate 21 Brain, Base View Plate 22 Nervous System Plate 23 Right Eye Horizontal Section Plate 24 The Ear EVALUATION AND MANAGEMENT SERVICES Classification Of Evaluation And Management Services Subsection Information Materials Supplied By The Physician Definitions Of Commonly Used Terms New And Established Patients Chief Complaint Concurrent Care Counseling History System Review Levels Of Evaluation And Management Services Key Components Contributory Components Time Diagnostic Testing Or Studies Unlisted Services Special Report Clinical Examples Modifiers Choosing Evaluation And Management Codes Office And Other Outpatient Services Hospital Observation Services Hospital Inpatient Services Consultations Emergency Services Critical Care Services Inpatient Neonatal and Pediatric Intensive Care Nursing Facility Service Domiciliary, Rest Home or Custodial Services Home Medical Services Prolonged Services Case Management Services Care Plan Oversight Services Preventive Medicine Services Newborn Care ix

4 MEDICAL PROCEDURE CODING MADE EASY! Special Services And Reports EXERCISE 4: EVALUATION & MANAGEMENT SERVICES DOCUMENTATION GUIDELINES What Is Documentation And Why Is It Important? What Do Payers Want And Why? General Principles Of Medical Record Documentation Documentation Of E/M Services Documentation Of History Review Of Systems Documentation Of Examination General Multi-System Examination Cardiovascular Examination Ear, Nose And Throat Examination Eye Examination Genitourinary Examination Hematologic, Lymphatic And/Or Immunologic Examination Musculoskeletal Examination Neurological Examination Psychiatric Examination Respiratory Examination Skin Examination Documentation Of The Complexity Of Medical Decision Making Number Of Diagnosis Or Management Options Amount And/Or Complexity of Data to be Reviewed Risk Of Significant Complications, Morbidity Or Mortality Documentation Of Encounter Dominated By Counseling Or Coordination Of Care Table of Risk EXERCISE 5: E/M DOCUMENTATION GUIDELINES NATIONAL CORRECT CODING POLICY History Purpose What Is Correct Coding? General Correct Coding Policies Coding Based Upon Standard Of Medical/Surgical Practice Medical/Surgical Package Evaluation & Management Services x

5 CONTENTS Modifiers and Modifier Indicators Standard Preparation/Monitoring Services Anesthesia Service Included In The Surgical Procedure HCPCS/CPT Procedure Code Definition CPT Coding System and CMS Coding System Instructions Separate Procedure Family Of Codes More Extensive Procedures Sequential Procedures Laboratory Panel Misuse of Column Two Code with Column One Code Mutually Exclusive Procedures Gender Specific Procedures Add-On Codes Excluded Service Unlisted Services Or Procedures Modified, Deleted, and Added Code Pairs/Edits Medically Unlikely Edits (MUEs) EXERCISE 6: NATIONAL CORRECTING CODING POLICY ANESTHESIA SERVICES Guidelines Subsection Information Time Reporting Physicians' Services Materials Supplied By Physician Separate Or Multiple Procedures Special Report Anesthesia Modifiers Physical Status Modifiers Other Modifiers Qualifying Circumstances for Anesthesia Correct Coding Guidelines SURGERY SERVICES Guidelines Physicians' Services Listed Surgical Procedures Follow-Up Care Materials Supplied By Physician xi

6 MEDICAL PROCEDURE CODING MADE EASY! Multiple Surgical Procedures Order Of Listing Billing Full Versus Reduced Fees Separate Procedure Subsection Information Unlisted Service Or Procedure Special Report Modifiers Add-On Codes Starred Procedures Surgical Destruction Integumentary System Wound Repair Free Skin Grafts Musculoskeletal System Grafts Or Implants Reconstruction Oral and Facial Deformities Cast Application Arthroscopy Respiratory & Cardiovascular System Correct Coding Guidelines Respiratory System Cardiovascular System Vascular Injection Procedures Hemic And Lymphatic Systems Digestive System Urinary System Urodynamics Cystoscopy, Urethroscopy, and Cystourethroscopy Male Genital System Female Genital System Maternity Care And Delivery Endocrine System Nervous System Eye And Ocular Adnexa Auditory System EXERCISE 6: ANESTHESIA AND SURGERY RADIOLOGY SERVICES Guidelines Subject Listings Separate Or Multiple Procedures xii

7 CONTENTS Subsection Information Complete Procedures Supervision And Interpretation Only Modifiers Bilateral Procedure Codes Correct Coding Guidelines Diagnostic Ultrasound Radiation Oncology Nuclear Medicine HCPCS Equipment Transportation Codes PATHOLOGY & LABORATORY Guidelines Services Pathology And Laboratory Subsection Information Modifiers Organ Or Disease Panels Pathology Consultations Surgical Pathology Correct Coding Guidelines EXERCISE 7: RADIOLOGY AND LABORATORY MEDICINE SERVICES Guidelines Multiple Procedures Separate Procedures Subsection Information Unlisted Service Or Procedure Modifiers Special Report Materials Supplied By Physician Correct Coding Guidelines Immune Globulins Immunization Administration for Vaccines/Toxoids Vaccines, Toxoids Therapeutic or Diagnostic Infusions Therapeutic, Prophylactic, or Diagnostic Injections Drugs Other Than Oral Method Psychiatry Biofeedback xiii

8 MEDICAL PROCEDURE CODING MADE EASY! Dialysis Gastroenterology Ophthalmology Otorhinolaryngologic Services Cardiovascular Services Non-Invasive Vascular Studies Pulmonary Services Allergy And Immunology Neurology and Neuromuscular Procedures Central Nervous System Assessments/Tests Chemotherapy Administration Physical Medicine and Rehabilitation Medical Nutrition Therapy Acupuncture Osteopathic Services Chiropractic Services Special Services And Reports Home Health Procedures/Services CPT Category III Codes Transportation Services Miscellaneous And Experimental Rehabilitative Services Temporary Codes EXERCISE 9: MEDICINE SERVICES APPENDIX A: ANSWERS TO EXERCISES INDEX xiv

9 INTRODUCTION Coding is the language of medical billing and reimbursement. Fluency in this language is required for all medical personnel involved in the processes of billing for medical services, chart abstracting, coding, medical transcription, and reimbursement management. If the insurance billing staff is not fluent in this language, the practice will not receive the reimbursement it deserves and audit liability will increase. If hospital coders and patient accounting personnel are not fluent in this language, the hospital will not be paid properly and likewise may find itself with higher audit liability. If health insurance company claims processing personnel are not fluent in this language, claims processing errors may be made which result in improper denial or low payment of claims, or improper payment or overpayment of claims. To a beginning coder, the coding and reimbursement process may appear at first to be simple and easy. Just find out what the doctor did for the patient, take a CPT book, look up the procedure and get the CPT code. Then find out what the doctor s diagnosis is, take an ICD-9-CM book, look up the diagnosis and get the ICD-9-CM code. Print out a CMS1500 health insurance claim form... mail it in...and get paid. What could be easier than that? Experienced coders know that the process of selecting the correct CPT, HCPCS and ICD-9-CM codes to report medical services and procedures is actually very complicated and complex. Not only do you have to select the correct CPT or HCPCS and ICD-9-CM codes, you have to know: How to interpret, decipher, and transfer medical acronyms, eponyms and abbreviations and terminology. When to use HCPCS procedure codes instead of CPT procedure codes. When to use CPT or HCPCS modifiers. How to sequence multiple procedure codes properly when completing health insurance claim forms. How to sequence multiple ICD-9-CM diagnosis codes. When a medical report is required to support your procedures. If a procedure is covered by Medicare. If there are special billing rules or payment policies for Medicare or other health insurance payer. And a variety of other rules, regulations, policies and procedures. Medical Procedure Coding Made Easy! is designed to answer the most common coding, compliance, coverage, reimbursement and terminology questions encountered by medical coding personnel involved in procedure coding. Selection of the proper CPT and/or HCPCS procedure codes has a tremendous 1

10 MEDICAL PROCEDURE CODING MADE EASY! impact on reimbursement for the medical practice. In addition, proper reporting of CPT and/or HCPCS codes helps to protect your medical practice in the event of an audit by Medicare or other health insurance carriers. The CPT coding system provides a uniform coding language that accurately describes medical, surgical and diagnostic procedures and services, and provides an effective means for reliable communication among physicians, hospitals, and health insurance companies. The CPT coding system is maintained by the American Medical Association (AMA). Each year the CPT coding system is revised and numerous codes are added, deleted or descriptions revised. HCPCS Level II coding system provides a uniform coding language for reporting durable medical equipment, orthotics, prosthetics, supplies, materials and injections to the Medicare program. HCPCS Level II also includes codes for procedures and services that are not included in the CPT coding system. Codes from either system may be reported independently or together, depending upon the status of the patient. The HCPCS coding system is maintained by the Centers for Medicare and Medicaid (CMS). Each year the HCPCS coding system is revised and codes are added, deleted or descriptions revised. You should always use the most current edition of the HCPCS coding system. Once you have chosen the correct CPT and/or HCPCS procedure codes to report medical services and procedures, you also have to choose ICD-9-CM diagnosis codes that support the reason that the procedure was performed. For a comprehensive tutorial on diagnosis coding, consider our companion guide, ICD-9-CM Coding Made Easy!. Medical Procedure Coding Made Easy! begins with a comprehensive list of common terms and definitions used in the coding and billing process, followed by chapters on CPT & HCPCS coding, documentation guidelines, the national correct coding initiative, and specific chapters regarding coding for evaluation and management services, anesthesia, surgery, radiology, laboratory and medicine services. While designed specifically for beginning coders, experienced coders will also find new material of interest and value. 2

11 TERMINOLOGY Understanding the coding and compliance process requires a fundamental working knowledge of the words and acronyms used by medical professionals, government agencies and health insurance carriers to describe services, benefits and reimbursement policies. While many publications place the terminology section in an appendix at the back of the book, we feel that you should have an opportunity to review and learn the terminology before you encounter it within the text itself. Following is a comprehensive list of billing, coding, compliance, HIPAA and reimbursement words, terms and acronyms, including some that may not appear in the text of the book. Ablation: The removal or destruction of a body part or tissue or its function. Ablation may be performed by surgery, hormones, drugs Abortion: The premature termination of a pregnancy; may be induced or spontaneous (miscarriage) Abrasion: A surgical procedure that involves the controlled abrasion (wearing away) of the upper layers of the skin with sandpaper or other mechanical means. Abstract: The collection of information from the medical record via hard copy or electronic instrument. Access: The ability to obtain needed medical care. Accident and health insurance: Health insurance under which benefits are payable in case of disease, accidental injury or accidental death. Actual charge: One of the factors determining a physician's payment for a service under Medicare; equivalent to the billed or submitted charge. See Customary, Prevailing and Reasonable. Acupuncture: The use of special needles, with or without electrical stimulation, inserted into specific areas of the body. Acute: Refers to the condition that is the primary reason for the current encounter. ADA : American Dental Association Addenda: Official updates to ICD-9-CM published continuously since 1986 that become effective on October 1st of each year. Add-on codes: Procedures listed in the CPT coding system that are commonly carried out in addition to the primary procedure performed. 3

12 MEDICAL PROCEDURE CODING MADE EASY! Adjusted historical payment basis (AHPB): The average historical payment in a specific locality for a specific service. Adjustment: A chiropractic term which describes the skilled application of force to a joint or motion segment to improve intersegmental motion, decrease localized muscle tension, and restore normal motion and position. Admission date: The date the patient was admitted for inpatient care, outpatient service, or start of care. For an admission notice for hospice care, enter the effective date of election of hospice benefits. Admitting diagnosis code: Code indicating patient's diagnosis at admission. Adverse: Any response to a drug that is noxious and unintended and occurs with proper dosage. AFDC: Aid to Families with Dependent Children Aftercare: An encounter for something planned in advance, for example, cast removal. AHFS: American Hospital Formulary Service. AHPB: Adjusted Historical Payment Basis Allergy and Immunology: The section of the CPT coding system that includes codes for allergy testing and the preparation and administration of antigens. Allograft: A transplant process wherein a tissue or organ is taken from one individual (donor) and placed into another (recipient) Allowed charge: Payment for a physician service under the customary, prevailing and reasonable system; includes the payment from Medicare and the beneficiary's coinsurance, but not any balance bill. See Balance Bill; Coinsurance; Customary, Prevailing and Reasonable. Alphabetic index: The portion of ICD-9-CM that lists definitions and code sets in alphabetic order. Also referred to as Volume 2. AMA: American Medical Association Ambulatory Surgical Center (ASC): A freestanding facility, other than a physician's office, where surgical and diagnostic services are provided on an ambulatory basis. 4