Outline
Procedural Coding
Procedural coding is the transformation of written descriptions of procedures and professional services into numeric designations (code numbers).
The physician rendering care either writes or dictates this information into the patient’s medical health record.
Procedure codes are a standardized method used to precisely describe the services provided by physicians and allied health care professionals. They allow forms to be optically scanned by insurance companies.
The primary coding system used in physicians’ offices for professional services and procedures is Current Procedural Terminology (CPT), published and updated annually be the American Medical Association (AMA). Code numbers are added and deleted as new procedures are developed or existing procedures are modified. These changes are shown in each edition by the use of symbols.
A relative value scale is used for services and procedures; it is the system used by Medicare called resource-based relative value scale. (RVS and RBRVS) They provide value for CPT codes that can then be converted into dollars by the geographic and conversion factors.
The CPT uses a basic five-digit system for coding services rendered by physicians and two-digit add-on modifiers to indicate complications or special circumstances.
Procedure codes represent diagnostic and therapeutic services on medical billing statements and insurance forms.
Coding System:
CPT emerged as the procedural coding of choice. It is used for physician or provider services.
HCPCS (Healthcare Common Procedural Coding System) these are national codes for:
Ambulance, medical and surgical supplies, dental procedures, durable medical equipment, alcohol and drug abuse treatment services etc…
It looks like this:
Level I: the AMA CPT Codes and modifiers.
Level II: CMS-designated codes and alpha modifiers.
Methods of Payment
Fee schedule- listing of accepted charges or established allowances for specific medical procedures. A medical practice can have more than one fee schedule.
Usual, Customary and Reasonable: Complex system by which three fees is considered in calculating payment.
The fee is usual if it is what the physician usually charges for a give service to a private patient.
A fee is customary if it is in the range of usual fees charged by providers of similar training and experience in a geographic area.
The reasonable fee is the fee that meets the aforementioned criteria or is justifiable considering the circumstances of the case.
Relative Value Studies- A sophisticated system for coding and billing of professional services.
Resource-Based Relative Value Scale-This system consists of a fee schedule based on relative values. It involves a bit of mathematics in computing three components, relative value unit (RVU) for the service, a geographic adjustment factor (GAF) and a monetary conversion factor (CF)
Medicare Fee Schedule-Each local carrier annually sends each physician a Medicare fee schedule for his or her area or region number listing three columns of figures: participating amount, nonparticipating amount, and limiting charge for each procedure code number.
Limiting charge-A percentage limit on fees specified by legislation, that nonparticipating physicians might bill Medicare beneficiaries above the fee schedule amount.
Surgical Package- phrase commonly encountered when billing. Usually a surgical procedure includes:
-The operation
-Local, topical, metacarpal, metatarsal or digital block anesthesia
-One related E/M encounter on the date immediately before or on the date of the procedure (includes 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)
*Note-insurance policies and managed care plans vary in what is included in the surgical package fee. Most follow Medicare guidelines; some do not.
Medicare Global Package- Is similar to the surgical package concept. The Medicare Global Fee is a single fee for all necessary services normally furnished by the surgeon before, during and after the procedure. Included in the package are:
-Preoperative visits (1 day before day of surgery)
-Intraoperative services that are usual and necessary part of the surgical procedure
-Complications after surgery that do not require additional trips to the operating room (medical and surgical services)
-Postoperative visits including hospital visits discharge, and office visits for variable postoperative periods: 0, 10or 90 days.
-Writing orders
-Evaluating the patient in the recovery area
-Normal postoperative pain management
Unlisted Procedure-when an unusual service is rendered; an unlisted code should be used rather than guessing or using an incorrect code. Supporting documentation should be sent explaining the service.
Unbundling-Coding a billing numerous CPT codes to identify procedures that usually are described by a single code. Also known as “exploding” or “a la carte” medicine.
Downcoding-Occurs when the coding system used on a claim submitted to an insurance carrier does not match the coding system used by the company receiving the claim. The computer system converts the code submitted to the closest code in use, which is usually down one level from the submitted code. Therefore, payment is usually less.
Upcoding-term used to describe deliberate manipulation of CPT codes for increased payment.
Code Modifiers- A modifier 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.
HCPCS Modifiers-Used by Medicare a may be used by some commercial carriers. They may be two alphanumeric digits, two alphanumeric characters or a single alpha digit.
How to Code using the CPT:
1. Always read the introduction at the beginning of the codebook, which may change annually with each edition.
2. 2. Use the index at the back of the book to locate a specific item by generalized code numbers, not by page numbers. Never code from the index. Listings may be looked up according to names of procedures or services, organs, conditions, synonyms, eponyms, and abbreviations.
3. Locate the code number in the code section for the code range given in the index.
4. Turn to the beginning of the section for the code range given and read the GUIDELINES at the beginning of the section. This gives general information and instructions on coding certain procedures within the section, defines commonly used terms, explains classifications within the section and gives instructions specific to the section.
5. Turn to the correct section, subsection, category or subcategory and read through the narrative description to locate the most appropriate code to apply to the patient’s procedure.
6. Notice punctuation and indentions.
7. When trying to locate an E/M code, identify the place or type of service rendered. Then identify whether the patient is new or established and locate the category or subcategory. Review any guidelines or instructions. Read the descriptors of the levels of E/M service. Make sure the components necessary were performed by the physician and documented in the chart, and then assign the code.
8. Select the code
*Parentheses ( ) further define the code and will tell where other services are located
* Measurements throughout the codebook are based on the metric system
* All anesthesia services are reported by use of the five-digit anesthesia code plus a physical status modifier.
* The surgery section is the largest segment of the codebook. It has many subsections and subheadings. You must be able to break down a procedure and identify various terms that will direct you to the correct code.
*Determine if one or more modifiers are needed to give an accurate description of the service rendered or the circumstance in which they were performed.
*Enter the five-digit code number and modifier to the proper field on the insurance claim form exactly as given for each procedure or service rendered. Be careful not to transpose numbers.
Block 24D on CMS-1500
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