Introduction to Medical Coding For Lawyers

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1 American Health Lawyers Association Institute on Medicare and Medicaid Payment Issues March 20-22, 2013 Introduction to Medical Coding for Payment Lawyers Robert A. Pelaia Senior University Counsel for Health Affairs - Jacksonville Introduction to Medical Coding For Lawyers Two different coding systems currently are used for billing purposes: ICD-9-CM (International Classification of Diseases, 9 th Revision, Clinical Modification) CPT (Current Procedural Terminology, Fourth Edition) 1

2 ICD-9-CM International Classification of Diseases, 9 th Revision, Clinical Modification Originally developed by the World Health Organization in 1948 Diagnosis Codes ICD-9 Volume 2 Alphabetic Index to Diseases Volume 2 is presented first in the book and provides an alphabetic index to Volume 1 (the Tabular / Numeric List of Diseases). This logical placement of the Alphabetic Index allows you to easily locate terms for later verification in Volume 1 (the Tabular / Numeric List of Diseases). 2

3 ICD-9 Volume 1 Tabular /Numeric List of Diseases In back of book, behind Volume 2. Volume 1 lists the ICD-9 codes in numeric order and includes seventeen different chapters. ICD-9 Anatomy of an ICD-9 Code Three numbers decimal point two numbers All codes have a minimum of three digits. The three digit code is referred to as the Category Code. Example of Category Code: Infectious and Parasitic Diseases ( ) 056 Rubella 3

4 ICD-9 Anatomy of an ICD-9 Code Subcategories: Most of the Volume 1 Category Codes have either one or two levels of subcategories. ICD-9 Anatomy of an ICD-9 Code The first subcategory is indicated by the addition of a decimal point and a fourth digit after the category code. Example of Category Code with first subcategory: 056 Rubella With other specified complications 4

5 ICD-9 Anatomy of an ICD-9 Code The second subcategory level is indicated by the addition of a fifth digit. Example of Category Code with first and second subcategories: 056 Rubella With other specified complications Arthritis due to rubella Other Rubella without mention of complication ICD-9 Assigning ICD-9 Codes Step 1 Review the medical record documentation in order to properly identify the terms that best describe the patient s diagnosis. 5

6 ICD-9 Assigning ICD-9 Codes Step 2 Look up the terms that best describe the patient s diagnosis in Volume 2 (the alphabetic index) and identify the ICD-9 code that best matches the diagnosis. ICD-9 Assigning ICD-9 Codes Step 3 Look up the selected code in Volume 1 (the tabular/numerical list) to make the code selection. Careful attention should be paid to includes and excludes notes and other instructions in Volume 1. Code to the highest level of specificity. 6

7 ICD-9 Mini ICD-9 Quiz Chronic Obstructive Bronchitis Childhood Asthma with Acute Exacerbation Dermatitis due to Cat Hair ICD-10 Implementation ICD-9 was implemented in 1979 and is becoming outdated. No longer meets the advances in medicine and technology. Running out of code expansion capability. ICD-10 is the tenth revision of the International Classification of Diseases. 7

8 ICD-10 Implementation Why Make the Changes? Modernize Terminology Increased information for public health ICD-10 code changes impact virtually every system and business process in plan and provider organizations with significant impacts on billing and reimbursement. ICD-10 Implementation 01/16/09 - Original final rule was published. Original compliance date for implementation of ICD-10 was October 1, /05/12 - New final rule was published. New compliance date for implementation of ICD-10 is October 1,

9 ICD-10 Structure ICD-9 ICD-10 14,315 diagnosis codes 3-5 characters First character is numeric or alpha (E or V) Characters 2-5 are numeric Always at least 3 characters Use of decimal after 3 characters 69,099 diagnosis codes 3-7 characters Character 1 is alpha (all letters except U are used) Character 2 is numeric Characters 3-7 are alpha or numeric Use of decimal after 3 characters Use of dummy placeholder x Alpha characters are not casesensitive ICD-10 Examples Example: ICD-9 = 9 Pressure Ulcer Codes ICD-10 = 125 Pressure Ulcer Codes 9

10 ICD-10 Examples Laterality C Malignant neoplasm of lower-outer quadrant of right female breast C Malignant neoplasm of lower-outer quadrant of left female breast C Malignant neoplasm of lower-outer quadrant of unspecified female breast ICD-10 Examples Eyes and Ohs! Ones and Zeros! Uh-Oh! I Codes Diseases of Circulatory System I Cerebral infarction due to thrombosis of right vertebral artery O Codes Pregnancy/Childbirth O Pre-existing diabetes mellitus, type 1, in pregnancy, third trimester 10

11 ICD-10: Similarities to ICD-9 Tabular List is a chronological list of codes divided into chapters based on body system or condition Tabular List is presented in code number order Same hierarchical structure Codes are looked up the same way Look up diagnostic terms in Alphabetic Index Then verify code number in Tabular List ICD-10 Mini ICD-10 Quiz Chronic Obstructive Bronchitis Childhood Asthma with Acute Exacerbation Dermatitis due to Cat Hair 11

12 CPT Current Procedural Terminology, Fourth Edition CPT Background CPT was developed and published in 1966 by the American Medical Association. The current version, CPT 2008, is referred to as CPT-4 because it is the fourth edition of CPT. Annual updates of CPT are not considered new editions. Application CPT is used for reporting physician (professional) services and technical services provided with the professional services. 12

13 CPT Updating CPT Codes are updated through a deliberative process of adding, deleting, and revising codes. CPT codes are updated and revised by the AMA s CPT Editorial Panel on an annual basis. CPT Organization CPT is divided into six sections, followed by six appendices and an alphabetic index. The CPT codes are listed in numeric order within sections and subsections. Evaluation and Management ( ) Anesthesia ( ) Surgery ( ) Radiology ( ) Pathology and Laboratory ( ) Medicine ( ) 13

14 CPT Organization Section guidelines appear at the beginning of each of the six CPT sections. Subsection guidelines appear at the beginning of many of the subsections. The guidelines provide definitions and additional information to assist in the proper selection of CPT codes within the corresponding section or subsection. CPT Evaluation and Management Codes Key Components History Exam Medical Decision Making New Patient vs. Established Patient 14

15 SELECTING LEVEL OF E&M CODES History - Exam Medical Decision Making SELECTING LEVEL OF E&M CODES Select an E&M Code in 7 Easy Steps! 15

16 SELECTING LEVEL OF E&M CODES HISTORY (new patient) Step 1 - Determine the name level of the History component, which will be either Problem-focused, Expanded problem-focused, Detailed, or Comprehensive. SELECTING LEVEL OF E&M CODES HISTORY (new patient) Step 2 - Convert this name level of history into a number level. Problem-focused = Level 1 Expanded problem-focused = Level 2 Detailed = Level 3 Comprehensive = Levels 4 & 5 16

17 SELECTING LEVEL OF E&M CODES EXAM (new patient) Step 3 - Determine the name level of the Exam component, which will be either Problem-focused, Expanded problem-focused, Detailed, or Comprehensive. SELECTING LEVEL OF E&M CODES EXAM (new patient) Step 4 - Convert this name level of exam into a number level. Problem-focused = Level 1 Expanded problem-focused = Level 2 Detailed = Level 3 Comprehensive = Levels 4 & 5 17

18 SELECTING LEVEL OF E&M CODES MEDICAL DECISION MAKING (new patient) Step 5 - Determine the name level of the Medical Decision Making component, which will be either Straightforward, Low complexity, Moderate complexity, or High Complexity. SELECTING LEVEL OF E&M CODES MEDICAL DECISION MAKING (new patient) Step 6 - Convert this name level of Medical Decision Making into a number level. Straightforward = Levels 1 & 2 Low complexity = Level 3 Moderate complexity = Level 4 High Complexity = Level 5 18

19 SELECTING LEVEL OF E&M CODES Putting It All Together NOTE: The same name level of an element may result in a different number level depending on the type of service being coded. For instance, a Detailed history translates to a Level 3 when looking at the NEW Patient Office Visit range of codes (99203). HOWEVER, a Detailed history translates to a Level 4 when looking at the ESTABLISHED Patient Office Visit range of codes (99214). SELECTING LEVEL OF E&M CODES Putting It All Together In cases where a name level is associated with TWO number levels, credit the higher number level. For example: in the NEW Patient Office Visit subcategory, a Comprehensive level of history is associated with both the Level 4 and Level 5 codes within that category, so the Comprehensive history would be converted to a (number) Level 5 history in this category. 19

20 SELECTING LEVEL OF E&M CODES Putting It All Together In cases where a name level is associated with TWO number levels, credit the higher number level. Another example: in the NEW Patient Office Visit subcategory, a Straightforward level of MDM is associated with both the Level 1 and Level 2 codes within that category, so the Straightforward MDM should always be converted to a (number) Level 2 MDM in this category. SELECTING LEVEL OF E&M CODES Putting It All Together Step 7 - With a number level in hand for each of the three key components, determine whether you must now apply the 3/3 rule or 2/3 rule to arrive at the final code level for the category in question. 3/3: When using the 3/3 rule, the LOWEST of the three individual component levels IS the final visit level. 2/3: When using the 2/3 rule, the NEXT-TO-LOWEST component level IS the final visit level. 20

21 SELECTING LEVEL OF E&M CODES Putting It All Together Mini E&M Quiz New Patient Visit (3/3 rule) Level 3 History (detailed) Level 3 Exam (detailed) Level 2 MDM (straightforward) SELECTING LEVEL OF E&M CODES Putting It All Together Mini E&M Quiz New Patient Visit (3/3 rule) Level 5 History (comprehensive) Level 4 Exam (comprehensive) Level 3 MDM (low complexity) 21

22 SELECTING LEVEL OF E&M CODES Putting It All Together Mini E&M Quiz Established Patient Visit (2/3 rule) Level 4 History (detailed) Level 3 Exam (expanded problem focused) Level 2 MDM (straightforward) SELECTING LEVEL OF E&M CODES Putting It All Together Mini E&M Quiz Established Patient Visit (2/3 rule) Level 2 History (problem-focused) Level 2 Exam (problem-focused) Level 3 MDM (low complexity) 22

23 CPT Assigning CPT Codes Step 1 Review the medical record documentation in order to properly identify the terms that best describe the service. CPT Assigning CPT Codes Step 2 Look up the terms that best describe the service in the CPT index and identify the CPT code that best matches the service. 23

24 CPT Assigning CPT Codes Step 3 Look up the selected code in the main section of CPT to make the code selection. Careful attention should be paid to use of modifiers. CPT Mini CPT Quiz Soft Tissue Shoulder Biopsy Removal of Foreign Body, External Eye; Conjunctival Superficial Electrolyte Panel - Pathology 24

25 CPT Modifier Examples Modifier 25 - Significant, Separately Identifiable E&M Service by the Same Physician on the Same Day of the Procedure or Other Service. Modifier 25 is used to describe separate, distinctly identifiable services from other services or procedures rendered during the same visit. Always attach the modifier to the evaluation and management code. Modifier 57 - Decision for Surgery. Modifier 57 is used when an evaluation and management (E&M) service resulted in the initial decision to perform surgery. Major surgical procedure is defined by CMS as a procedure having a 90-day global period assigned by CMS. The global period includes the 1-day prior to surgery. Model Compliance Plan for Physician Practices Issued: October 5, 2000 The OIG Compliance Guidance for Individual and Small Group Physician Practices is available on the OIG s web site at: 25

26 Specific Risk Areas Coding and Billing Billing for items or services not rendered or not provided as claimed. Submitting claims for equipment, medical supplies and services that are not reasonable and necessary. Double billing resulting in duplicate payment. Specific Risk Areas Coding and Billing Billing for non-covered services as if covered. Knowing misuse of provider identification numbers, which results in improper billing. Billing for unbundled services. 26

27 Specific Risk Areas Coding and Billing Failure to properly use coding modifiers. Clustering Upcoding the level of service provided. OIG Work Plan - Fiscal Year 2013 On October 2, 2013, the Office of Inspector General (OIG) published its proposed Work Plan for Fiscal Year 2013 The Work Plan is available on the OIG s web site at: 27

28 OIG Work Plan - Fiscal Year 2013 The Plan, which describes new and ongoing audit and enforcement priorities of the OIG, is helpful in indentifying coding risk areas and providing focus for coders ongoing efforts relating to their compliance program activities, audits, and policy development. OIG Work Plan - Fiscal Year 2013 Coders should carefully review the OIG Work Plan to ensure that they are aware of all of the coding risk areas identified by the OIG. 28

29 OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan Anesthesia Services Review whether Medicare payments for anesthesiology services reported on a claim with the AA service code modifier met Medicare Requirements. OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan Medicare Payments with G Modifiers Review the extent to which Medicare improperly paid claims from 2002 to 2011 in which providers entered GA, GX, GY or GZ service code modifiers. 29

30 OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan Place of Service Errors Review physician coding of place of service on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments. OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan Sleep Disorder Clinics Review the appropriateness of Medicare payments for sleep test procedures (CPT codes & 95811) and determine whether they were in accordance with Medicare requirements. 30

31 OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan Physicians: Incident-To Services Review physician billing for incident-to services to determine whether payment for such services had a higher error rate than that for non-incident-to services. OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan Evaluation and Management Services Review E/M claims to identify extent to which CMS made potentially inappropriate payments for E/M services in

32 OIG Work Plan - Fiscal Year 2013 Billing/Coding-Related Items in the 2013 Work Plan E/M Services: Use of Modifiers during the Global Surgery Period Review the appropriateness of the use of certain claims modifier codes during the global surgery period. Questions & Answers 32

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