Home Study Course for the Medical Biller

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1 Home Study Course for the Medical Biller Copyright , Medical Billing Course.com

2 Chapter 4 Understanding Codes An introduction to procedure and diagnosis coding. In Chapter 4 you will be introduced to the fundamentals of coding for medical procedures and diagnoses. This chapter is simply an introduction to the basics, but you will find information at the end of the chapter sections that will point you to different publications and training resources available about medical coding. Much of the information in this chapter will relate to what you have learned in Chapter 3 about the CMS 1500 (formerly HCFA 1500) form. The combined knowledge will help you to better understand the proper formatting of medical claims. Throughout this chapter you will be alerted to pay special I C O N K E Y attention to certain areas with the symbols you see in the icon Valuable Information key to the left. The Valuable Information may be contained Internet Resources on your chapter exam and you may wish to use a highlighter to come back to these areas prior to taking your test. Please take Platform Opinions advantage of the Internet Resources we have compiled for you. These will be listed in the left margin on any given page of this course. Periodically, we will provide you with Platform Opinions. These are nothing more than opinions or information from one or more of the medical billing center owners involved with putting together this course. About Codes Internet Resource HCFA s Official Web Site Medical Billing Medical codes were created to standardize the processing of medical insurance claims. The two basic categories of codes are Procedure Codes and Diagnosis Codes. The descriptions of the same procedure/diagnosis can vary greatly, and a standard way of notating procedures is necessary. As a result, the Current Procedural Terminology (CPT) system was created for documenting procedures, and the International Classification of Diseases (ICD/ICD9) system was created for documenting diagnoses. 1

3 These two systems provide a standard in today s industry, yet you still must keep up with the frequent updates and changes to each system. Throughout this chapter, you will find resources that can help you keep up with the inevitable changes to come, and help you to find additional sources of education. CPT Codes Current Procedural Terminology codes are referred to as CPT Codes. They are codes standardized by the American Medical Association that represent the procedures performed by a physician or practitioner. As new procedures are developed, existing CPT codes can be changed or added. CPT codes are five characters in length (most are numeric, some are alphanumeric), and are classified into numeric blocks of codes. Each block of codes consists of similar types or areas of medical practice. For instance, Radiology procedures are in the block. In that block, you will find procedures such as a Cervical AP/LAT X-ray with a CPT code of Another example is the block where you find critical care procedures like New Patient Exam with a CPT code of CPT: Proper Formatting First, we will cover the basics of the use of CPT codes on the CMS 1500 form. CPT Codes are entered in Box 24D under the CPT column. Enter all five characters with no spaces between the characters. 2

4 You should also enter in the proper date(s) of service in the Box 24A, and enter the proper place of service and type of service codes in Box 24B and Box 24C. For instance, if a patient received an Established Patient Exam Level 1 with a CPT of on May 7, 2001, Box 24A, B, C, and D would look like the example below. Notice that there is no description field for the CPT code. The only information you are sending about the procedure is the CPT code. Because of that, you need to make sure you are using the correct codes at all times. Notice another column in Box 24D labeled Modifier. Modifiers are used to add more information about a CPT that is listed in Box 24D. For instance, a surgical procedure may have taken additional time due to unusual circumstances encountered. Box 24D can contain up to four modifiers per procedure. Modifiers are two characters in length, and they are standardized in the same way that CPT codes are. An example of a modifier is Modifier - 22 UNUSUAL PROCEDURAL SERVICES. This modifier should be entered in Box 24D/Modifier column when the service provided is greater than that usually required. This occurs when the procedure was complicated, complex, difficult, or took significantly more time than usually required by the physician to complete the procedure. 3

5 CPT: Proper Usage As a medical biller you are not only responsible for formatting the claim correctly, but you should also make sure that the codes you are being furnished are up-to-date and proper. Some physicians use outdated or obsolete CPT codes when they write up patient encounter records and Superbills. You, as a biller, should verify that the client s coding is correct as much as is possible. Correct CPT coding is essential to the success of your Billing Center and to the clients you serve. But remember, the ultimate responsibility of proper coding is that of your client. Properly coded procedures are reimbursed more quickly and are rejected far less often. You can also help avoid an audit of the clinic s billing records that could be triggered by a pattern of incorrectly coded claims. Probing audits are costly in time and revenue, and should be avoided by carefully, and consistently coding your claims. Self Audits: Essentially, a medical practice should periodically perform a self-audit, whether through its own resources or a third party. Self-audits are a way to check your own coding practices and see if you are coding correctly. Avoiding government audits is a major concern for medical practices and measures should be taken to avoid them. To verify that the CPT codes that your clients are using are correct, there are many options available. One option is to consult the American Medical Association CPT Current Year publication. This book is the ultimate authority in CPT coding. Internet Resource Captiva Software For your convenience, CPT (current year) can be ordered on the Medical Billing Course website in the bookstore. 4

6 Developing Your Skills The goal of this course at MedicalBillingCourse.com is to be an overall education on Medical Billing, and not a course focused on coding. However, there are courses available in the general market, and on-line, which are focused specifically on CPT coding. Becoming certified in coding is certainly not necessary in order to perform medical billing or to begin a medical billing business! But, if you are interested in learning more about coding courses, check out Resources and References Here are some sites that are educational and informational resources and references on CPT coding. The Internet has become a huge source of information for medical billers and these sites below will give you an idea of what is available to you. Just Coding Quizlet Archive Want to sharpen your coding skills? Just Coding s Quizlet Archive provides challenging quizzes that focus on specific coding topics. Click on the topic of your choice to begin. CPT Assistance from the American Medical Association Newsletter from AHIMA 5

7 The newsletter contains: Up-to-date editorial on electronic health record, clinical terminologies, HIPAA privacy & security, coding tips and much more. BC Advantage Magazine CPT Assistant Newsletter by the AMA Coding Compliance Newsletter by QMCG Perform a Google (or your favorite search engine) search for CPT Coding Help and/or CPT Coding Newsletter and record the newsletters that you would like to sign up for below: 6

8 ICD / ICD-9 Codes International Classification of Diseases codes, known as ICD Codes (or ICD-9 codes), are standardized diagnosis codes. The current version of ICD codes is ICD-9. Because of that, diagnosis codes are mostly referred to as ICD-9 codes. ICD-9 codes are standardized by the World Health Organization internationally and are revised annually in the United States by the National Center for Health Statistics. They are alphanumeric codes three, four, or five characters in length, in a ###, ###.#, ###.## format. Examples are 591, 724.2, 020.0, , and V82.0. Codes beginning with V identify situations where the patient is not injured nor diagnosed with a disease. Usually, the patient is undergoing preventative procedures or elective procedures in these cases. A new ICD version, ICD-10, is currently being developed for use. currently, ICD-9 is the industry-standard for diagnosis coding. However, ICD-9: Proper Formatting As you learned, the diagnosis information is entered in Box 21 and Box 24E. Up to four ICD-9 codes are entered in the fields in Box 21. In Box 24E, any combination of 1,2,3 and 4 can be entered to indicate which diagnoses are pertinent to the CPT entered on that line. 7

9 In the example below, the procedure on the first line applies to all four ICD-9 codes. The second procedure only applies to the #3 diagnosis, Box 24E can be any combination of 1,2,3 or 4, and in any order. Note: Some Insurance Carriers have specific requirements for Box 24E. Some may request that you only indicate the PRIMARY diagnosis, and not the second, third, or fourth diagnosis on each CPT line. ICD-9: Proper Usage One of the most important things to remember when entering procedures is that you should list the diagnosis with the most relevance first. The diagnosis that is the primary diagnosis for the patient s condition should be listed first. The second diagnosis listed should be the secondary in relevance to the patient s condition. This is the same for the third and fourth diagnosis codes. You should also be as specific as possible when entering diagnosis codes. Codes that are five digits in length are more specific than procedures that are four digits in length. ICD-9 codes establish the medical necessity of the CPT codes you are billing on the claim, so they work hand in hand with the CPT codes. That means that the more specific you are in describing the diagnosis of the patient, the less review time the insurance carrier will take before paying on the claim. Most of the time, as a medical biller, you will only have the information that the physician has written on the patient encounter document, so this isn t something you have very much control over. 8

10 ICD-9 Codes And Medical Necessity One of the most important functions of ICD-9 codes is the establishment of medical necessity. Medical Necessity is one of those buzz-phrases that you will hear more and more as you deal with medical insurance claims. Insurance Carriers are in the business of making money (or paying the least amount possible for government carriers). They are not going to willingly pay for procedures that are not performed without the patient s need for that treatment. Almost all insurance policies only cover treatments that are necessary, unless a patient has special coverage for elective procedures. Therefore, it is essential that you establish medical necessity for the procedures by documenting ICD-9 correlate to the CPT codes. For example, if a chiropractor treats a patient with a Spinal Manipulation 98940, the patient s claim must be documented with a correlating diagnosis such as Thoracic Spine Pain If the chiropractor wrote down on the superbill as the diagnosis code, you might want to check back with the him/her before processing the claim, because is the ICD-9 code for Halitosis. While this example is an exaggeration to make a point, it is true to the smallest extent. The insurance carriers want to know that the patient was treated only because of necessity. Keeping Up To Date Like CPT codes, ICD-9 s are revised on an annual basis. That means that you need to always be ready for changes, and keep your coding current. You should purchase an ICD-9 reference manual such as Medicode ICD-9-CM shown below. For your convenience, ICD9-CM can be ordered on the Medical Billing Course website. 9

11 Just like CPT codes, there are software solutions to handle your coding needs. In addition to software solutions, there are web sites at your disposal, with a lot of information about ICD-9 coding. Resources and References Like CPT coding, there is a lot of information and training opportunities on-line in the area of ICD-9 coding. Here are some sites to get you started. Advance Web Advance Newsmagazines Just Coding This web site is dedicated to the topic of coding. You will find medical industry news, discussion groups, articles, and you can shop for books and resources that they have available. EICD by Yaki Technologies This site offers an on-line, searchable index of ICD-9 and CPT Codes. It also has a lot of good information on coding guidelines. Code Correct Billing Code Lookup CodeCorrect s Internet-delivery replaces the time-consuming and costly process of manually searching through books and outdated CDs for coding and compliance information. With rapidly changing rules, regulations, and 10

12 governmental mandates, the Internet is the only way to efficiently disseminate this important data. CMS Centers for Medicare & Medicaid Services Medicare Learning Network Free Courses The Medicare Learning Network uses a variety of mechanisms, such as the Internet, national educational articles, brochures, fact sheets, web-based training courses, and videos, to deliver a planned and coordinated provider education program. The Network uses these different mechanisms to provide educational opportunities that accommodate the healthcare professional's busy schedule, with the least amount of disruption to normal business functioning. Their goal is to provide you with timely, easy-to-understand educational materials to accompany the release of new or revised Medicare Program policies. Perform a Google (or your favorite search engine) search for ICD Coding Help and/or ICD Coding Newsletter and record the newsletters that you would like to sign up for below: 11

13 Chapter 4 Summary Well, now you should have a basic understanding of CPT and ICD-9 codes. While this is just a start, it is a good start. Coding (as it relates to billing) is a skill that you constantly have to be developing, learning, and changing as the industry changes. The more you learn about coding (as it relates to the billing you are performing), the more of an asset you will be to your clients. Becoming a certified coder is not necessary to perform medical billing. Medical Billing and Medical Coding (for the most part) are two separate fields. Medical Billing deals with the financial aspect of the practice. Medical Coding isn t a position that is found in every physician s office and it s simply not a position that is normally handled from home! What Did We Learn? What CPT and ICD-9 codes are How to properly format codes on the CMS 1500 form The importance of properly coded procedures and diagnoses About resources available online, printed resources, and software applications that assist and educate in proper coding practices The importance of establishing medical necessity by documenting ICD-9 codes that correlate with the CPT codes 12

14 Chapter 4 Motivation Anything you vividly imagine, ardently desire, sincerely believe, and enthusiastically act upon must, absolutely must, come to pass. - Skip Bertman (LSU Baseball Coach) As long as you are going to be thinking anyway, think big. - Donald Trump I've tried 99 times and I failed, but on the 100th try, came success. - Albert Einstein 13

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