MO260 SEMINAR 5. TOPICS ICD-9-CM Organization of the ICD-9-CM Steps in ICD-9-CM Coding CPT...

MO260

SEMINAR 5

TOPICS• ICD-9-CM• Organization of the ICD-9-CM• Steps in ICD-9-CM Coding• CPT• Organization of the CPT Coding Book• Steps in CPT Coding• Medical Claim Forms• Insurance Claims Processing• CMS-1500 Claim Form• Hospital Inpatient Billing

ICD-9-CM• What is the International Classification of Diseases, Volume 9, Clinical Modification (ICD-9-CM)?

*ICD-9-CM is the code set used by physicians’ offices, hospitals, clinics, home healthcare agencies, and other healthcare providers for reporting diagnoses, to substantiate the need for patient care of treatment, and to provide statics for morbidity and mortality rates.

• What are the purposes of the ICD-9-CM?*The ICD-9-CM coding serves 3 main purposes:

i. Establishes medical necessity.ii. Translates written terminology or descriptions into a universal, common language.iii. Provides data for statistical analysis.

• The clinical modification (CM) allows data to be used in what ways?– Classifying morbidity and mortality information for statistical purposes.– Classifying diagnosis and procedure information for epidemiological and clinical research.– Indexing of hospital records by disease and surgical procedure.– Compile and compare healthcare data.– Reporting information to various healthcare reimbursement systems.– Assist in planning healthcare delivery systems.– Analyzing resource consumption patterns.– Analyzing adequacy of reimbursement for health services.

Organization of the ICD-9-CM• How is the ICD-9-CM organized?

*ICD-9-CM lists over 10,000 diagnostic codes in three volumes. Each volume has a distinct purpose. -The actual physical organization of the manual has Volume II first, followed by Volume I, then Volume III. - Physicians use Volumes I and II; hospitals use all three volumes. -An addenda for Volumes I and II that provides diagnosis coding changes (additions or deletions of codes, or

revisions to descriptors) is added to the ICD-9-CM coding book annually by a federal committee, with changes taking effect each year on October 1st.

-Volume III is revised annually by the Centers for Medicare and Medicaid Services (CMS).

-Volume II is the Alphabetic Index to Diseases and has two sections. *The first section is used for one of the first steps in coding. Here conditions, diseases, and reasons for

seeking medical care are listed alphabetically by main term and subterms that aid in locating the most appropriate code. After identifying potential codes, they are verified in Volume I, the Tabular List. *Section two is the alphabetic index to external causes of adverse effects of drugs and other chemical substances, injuries and poisonings. *Section two also has two tables within the alphabetic index: the hypertension table and the

neoplasm table.

Organization of the ICD-9-CM continued…

Organization continued… -Volume I is the Tabular/Numerical List of Diseases and Injuries.

*After identifying potential codes in the first section of Volume II, they are verified here in the numerically- sequenced list of all diagnosis codes, divided into 17 chapters based on cause, or etiology, of the disease or injury, as well as by location of the disease or injury on or in the body.

-Each chapter contains the following: i. Chapter headings ii. Categories (or category code) – that are the first three digit code numbers iii. Subcategories – that are four digit code numbers iv. Subheadings v. Fifth digit subcategories – five digit code numbers (subclassifications).-Diagnosis codes vary in character length from three to five digits, with a decimal point placed after the third digit.

-The fourth and fifth digits are subcategory and subclassification codes that provide the specificity necessary to accurately describe a patient’s clinical condition.

*Following the 17 chapters are two sections with supplemental codes. V-codes classify the reason for encounter or care, other than an active illness. E-codes classify causes of injury and poisoning. *Volume I also has appendices to further define diagnosis, to classify new drugs, or to reference the type and cause of on-the-job injury the patient has sustained.

Example: Appendix A: Morphology of Neoplasms

Organization of the ICD-9-CM continued…

Organization continued…-Volume III is the Classification for Procedures provided as a tabular list and alphabetic index.

*Volume III is for inpatient procedure coding in hospital settings. *Procedure codes also from two to four digits, with the decimal point placed after the second digit.

-The first two digits for procedures compose the category code. -The third and fourth digits are the subcategory and subclassification codes indicating specific details about

diagnostic and surgical procedures.

In conclusion: • Because codes serve as the communication vehicle between providers and insurers, it is vital to follow

documentation guidelines at all times.• Accurate reimbursement is dependent upon timely, accurate, and complete coding of the services and

procedures provided to beneficiaries.• For the ICD-9-CM, the cooperating parties who are responsible for publishing coding guidelines are the

following: NCHS, CMS, American Hospital Association (AHA), the American Health Information Management Association (AHIMA), and the Editorial Advisory Board.

Steps in ICD-9-CM CodingFollow these basic steps to code each disease or condition completely and accurately:

1. Determine the reason for the encounter. How? Read and understand the physician’s documentation. Identify all main terms included in the diagnostic statement. Why the patient sought care together with the medical examination is the primary diagnosis. The primary diagnosis, whether it is a manifestation, condition, or disease is the main term that should be located in the alphabetic index.

2. Locate each main term in the Alphabetic Index (Volume II).

Follow these guidelines to choose the correct term:

a. Use any supplementary terms in the diagnostic statement to help locate the main term.b. Read and follow any notes below the main term.c. Review the subterms indented under the main term to find the most specific match to the diagnosis. The subterms form individual line entries and describe essential differences by site, etiology, or clinical type.d. Read and follow any cross-reference instructions if the needed code is not located under the first main entry consulted.e. Make note of a two-code (etiology and/or manifestation) indication.

Steps in ICD-9-CM Coding continued…

STEPS continued…

3. Verify the code selected in the Tabular List (Volume 1).

a. Read and be guided by any instructional terms in the Tabular List. Read any include or exclude notes, checking back to see if any apply to the code’s category, section, or chapter.b. Assign codes to their highest level of specificity.– Assign three-digit codes only when no four-digit codes appear within the category.– Assign a fifth digit for any subcategory where a fifth-digit subclassification is provided.

c. Follow any instructions requiring the selection of additional codes (such as “Code also,” or “Code first underlying disease as”).d. List multiple codes in the correct order.

4. Continue coding the diagnostic statement until all the component elements are fully identified.

5. Note: Multiple diagnoses codes can be assigned to a single encounter. However, note: each unique ICD-9-CM diagnosis code may be reported only once for an encounter.

Current Procedural Terminology (CPT)• What is Procedural Coding?

*Procedural coding is the act of assigning a code to a patient’s procedure or service. Accuracy in procedural coding is essential, because incorrect or inadequate coding may lead to denial or delay of insurance claims.

• What is Current Procedural Terminology (CPT)?*Procedures and services performed by physicians are reported using codes from the Current Procedural Terminology, Fourth Edition, which is published by the American Medical Association (AMA).

• What is the purpose of CPT?*The purpose of CPT is to provide uniform language that will accurately describe medical, surgical, and diagnostic services so that those involved with health management and reimbursement will have an effective means of communication.

• Overview of CPT*CPT lists over 8,800 procedural codes that are updated every year and effect January 1st. *Code changes are published by the AMA in conjunction with CMS. *As with the ICD-9-CM, be sure to use the edition of the CPT that is in effect on the date of service.

Organization of the CPT Coding Book• How is the CPT coding book organized?

*The first section of the CPT coding book is the Tabular Index, or numerical listing of all CPT codes, that is organized into three categories:

Category I (codes 00100 to 99999)– Procedure or services (approved by the FDA and organized into six sections: evaluation and management services,

anesthesia, surgery, radiology, pathology and laboratory, medicine);– Subject to lengthy approval process;– Restricted to clinically recognized services.

Category II (codes are four numbers followed by the letter F)– Supplemental tracking codes;– Used for performance measurement;– Developed to standardize collection of data;– Use is optional and should not be used to replace category I codes;

Organization of the CPT Coding Book continued…

Categories continued…

Category III (codes are four numbers followed by the letter T)– Temporary codes for data collection; and– For tracking the use of emerging technology, services and procedures;– Located following category II section.

• What do the symbols mean?*To make CPT nomenclature more user friendly a number of code symbols have been incorporated into the book.*The more frequently used symbols are the following:

a. Revised code: Symbol is a triangle. Triangle indicates that the code’s descriptor has changed.b. New code: Symbol is a black circle or dot. Dot indicates new to this edition.c. New or revised text: Symbol is of two triangles facing one another. These symbols enclose new or

revised text other than the code’s descriptor.d. Add-on code: Symbol is a plus sign. Plus sign describes secondary procedures only. Cannot be used as a primary code.


• Are guidelines provided for each of the six sections of CPT Category I?*Yes. Specific guidelines are found at the beginning of each of the six sections. The guidelines provide information that is necessary to appropriately interpret and report procedures and services found in that section. *In addition, several of the subheadings or subsections have special instructions unique to that section.

• What are CPT Modifiers?*CPT modifiers are two-digit numeric indicators, with the exception of the physical status modifiers found in the guidelines of the Anesthesia section and Appendix A of the CPT book.*After the five-digit CPT code a hyphen is used then the two-digit modifier.*Modifiers indicate that the description of the service or procedure has been altered. *Some reasons modifiers may be used are the following:

a. to report only the professional component of a procedure or service;b. to report a service mandated by a third-party payer;c. to indicate that a procedure was performed bilaterally;d. to report multiple procedures performed at the same session by the same provider;e. to report a portion of a service or procedure that was reduced or eliminated at the physician’s discretion;f. to report assistant surgeon services.


• What are the Appendices A thru M that follow the Tabular Index categories?*The appendices provide additional reference information. Here is a summary of each appendix:

*Appendix A: Modifiers.*Appendix B: Summary of Additions, Deletions and Revisions.*Appendix C: Clinical Examples of E&M code scenarios for many medical specialties.*Appendix D: Summary of CPT Add-On-Codes.*Appendix E: Summary of CPT Codes Exempt from Modifier 51, multiple procedures.*Appendix F: Codes Exempt from Modifier 63, procedure performed on infants less than 4

kg.*Appendix G: Codes Include Moderate (Conscious) sedation by surgeon, inherent part of

procedure.*Appendix H: Alphabetic Index of Performance Measures by Clinical Condition or Topic is a

cross reference between Category II codes and situation in which they might be used.

*Appendix I: Genetic Testing Code Modifiers for reporting molecular lab procedures.*Appendix J: Electrodiagnostic Medicine Listing of Sensory, Motor, and Mixed Nerves.*Appendix K: Product Pending FDA Approval.*Appendix L: Vascular Families depicts the structure of first, second, and third order vascular

branches to aid in coding for catheterization of the aorta.*Appendix M: Crosswalk to Deleted CPT Codes with suggested replacement codes for the

current year.


• What is the Alphabetical Index at the end of the CPT manual?*All procedures and services in the CPT manual are listed alphabetically by main term and modifying terms that aid in locating the most appropriate code or range of codes.* Similar to the ICD-9-CM, CPT coding begins with this alphabetical index. *After identifying potential codes in this alphabetical index, they are verified in the tabular index.

Steps in CPT CodingFollow these basic steps for determining the correct procedure code:

1. Determine the procedures and services to report. How? As with diagnostic coding, procedure coding also begins and ends with the patient’s medical record. The information needs to be abstracted from the medical record in order to code for services and the reasons they were provided. Only procedures and services documented in the medical record can be coded and billed. *For office-based or other outpatient services documents in the medical record that can be referred to are the encounter form, visit notes, in-house lab and radiology reports, and operative reports for outpatient procedures.*For inpatient services documents that can be referred to are daily rounds sheet daily progress notes, and operative reports.

i. Look first for the chief complaint or reason for the visit.ii. Identify the primary procedure, or the main service provided during the encounter. It may just be a treatment, such as an injection, or a minor surgical procedure, such as removal of a lesion or repair of a

laceration.iii. Additional services documented in the medical record will be identified as secondary procedures.

Secondary procedures are coded the same way, only prioritized from highest cost to lowest cost on the CMS- 1500 form.

Steps in CPT Coding continued…

STEPS continued...

2. Locate each main term in the Alphabetic Index.*The main term is always boldfaced with each word beginning with a capital letter.Follow these guidelines to choose the correct term:

a. Locate the main term for each procedure or service in the Alphabetic Index. This can be done in one of four ways:

i. First look up the name of the procedure or service;ii. Next try the name of the organ or anatomic site;iii. Third try the condition (disease or injury);iv. Further checking can be done using any synonym, eponym or acronym associated with the

main term.b. Review the entries under the main term to see if any apply, and check cross-references.c. If the main term cannot be located in the index, the coder should review the main term selection with the physician for clarification and confirmation, as there may be a better or more common term used.d. Carefully review the main text listing, including all section guidelines and notes for particular subsections, to arrive at the final code. e. Rank in order of highest to lowest rate of reimbursement the codes to be reported for the day’s service.


STEPS continued…

3. Review any modifying terms or instructional notes associated with the main term.*Review any modifying terms or instructional notes associated with the main term. Main terms rarely provide the exact code needed. Modifying terms are descriptive words in the alphabetic index that appear indented under the main term to further describe the service or procedure (modifying terms different than two-digit modifiers that are appended to Category I codes).*Review the entire list of modifying terms as they do affect the appropriate code selection.

4. Identify the tentative code(s) associated with the most appropriate modifying term(s).*The tentative codes are printed immediately to the right of the modifying terms.

5. Locate the tentative code(s) in the tabular index.*Look for the tentative code in the tabular index where codes are arranged in numerical order. *The tabular index contains six sections based on medical specialty.


STEPS continued…

6. Interpret the conventions used in the tabular index. *Tabular index conventions include formatting, punctuation, instructional notes, and symbols and may appear on the same line with the code, above it, below it, or at the beginning of a subcategory, category, subheading, subsection, or section.

7. Select the code with the highest level of specificity.

8. Review the code for appropriate bundling, add on codes and quantity.*Carefully review code descriptions, instructional notes, and special instructions one more time to be certain that the code selected is accurate. *Pay special attention to bundling edits (indicating that multiple services are included in a single code), frequently triggered by the words includes and not separately reportable.*Report separately or use in conjunction with indicate that additional codes should be used.*Verify if add-on codes are needed.


STEPS continued…

9. Determine if modifiers are required. *Determine if any of the two-digit modifiers are required to report a service or procedure that has been modified by some specific circumstance without altering or modifying the basic definition or CPT code. As mentioned on a previous slide, a complete list of modifiers is located in Appendix A.

10.Verify the final code against documentation.*As a final check, with coding manual instructions fresh in your mind, refer back to the original documentation and verify that all conditions of the code agree with the medical record.

11.Assign the code.

Medical Claim Forms• What standard medical claim forms are used for physician medical billing?

– Patient Information: this form is completed by a new patient at registration.• Requests demographic, employment, and some insurance information.

– Assignment of Benefits: this form is signed by the patient or guarantor so that the physician will be paid directly by the insurance carrier.• If an assignment of benefits form is not signed and the office submits the claim to the insurance carrier, the

money will be sent directly to the patient This form is usually signed once a year.

– Release of Information: this form ensures that information will only be released to authorized entities. • This form specifies which healthcare information from the medical chart may be released and to whom it may

be released. • Per HIPAA, if there is not a signed release of information form on file, the claim cannot be submitted to the

carrier. • This form is also referred to as the “signature on file” form.• This form must be signed once a year.

Medical Claim Forms continued…• Medical Claim Forms continued…

– Verification of Benefits: this form with complete documentation is handy if the insurance carrier pays the claim incorrectly or denies the claim after giving you information on the contrary when you verified

benefits.

• Examples of questions asked on this form:1. What is the effective date for this insurance coverage / policy?2. Is this patient subject to any preexisting clauses (or excluded coverage fro any conditions the patient had prior to the effective date of this insurance policy)?3. Is this patient and/or type of service subject to a deductible amount. If so, how much is the deductible amount and has any of it already been met?4. Is this type of service subject to an office copayment amount? If so, what is the amount?5. Is this (office visit, test, etc) a covered benefit?6. Does this plan require a referral or prior authorization?7. What is the claims mailing address?8. What is the first and last name of the insurance carrier representative on the phone assisting with the answer to these questions?

Medical Claim Forms continued…• Medical Claim Forms continued…

– Superbills: also referred to as encounter forms, charge slips, or routing slips, contain ICD-9-CM diagnostic and CPT procedure codes for the services that the office routinely provides.• This form will vary in appearance because medical practices design their own to meet the specific needs of the

practice.• A superbill for a medical specialty practice will only contain ICD-9-CM and CPT codes relating only to that

medical specialty.• In preparation for the day’s scheduled appointments, the superbills for each appointment should be printed

and attached to the patient’s chart if a paper chart is used.• This superbill will follow the patient throughout the visit so the professional staff can mark on the superbill the

procedures and treatments performed during the visit, as well as the diagnosis and return it to the business office staff.

• The business office staff will use the superbill as the source document for posting the charge and diagnosis data from the superbill into a computerized accounting system for filing the insurance claims and billing the patient.

Insurance Claims Processing• What are the steps involved in Insurance Claims Processing?

1. The first step involved in the Insurance Claims Process is to gather the information needed from patients using the different Medical Claims Forms just described.

2. Once the patient demographics, insurance information, diagnosis, and charges are posted to the patient account. Without the information obtained from the various medical forms, billing the patient’s insurance carrier would be impossible.

3. Step three involves preparing the claim form to be sent to the patient’s insurance carrier.-Physicians bill insurance carriers using the CMS-1500 claim form.-Hospitals bill carriers using the UB-04 claim form.

CMS-1500 Claim Form• CMS-1500 Claim Form Overview:

-The CMS-1500 form was developed by CMS to facilitate the process of billing by easily arranging diagnoses and services provided that were necessary to treat patients. -Medicare has made this form mandatory for all claims submissions.-Private insurance carriers have also accepted this claim form for submission of their claims.-The form is divided into two major sections: Patient and Insured Information, and Physician or Supplier Information.-The 33 boxes to be completed on the form are referred to as form locators. -Note that guidelines vary at the state and local levels for completing the CMS-1500, so be sure to confirm with local intermediaries or private carriers.-For quicker claims settlements and to reduce the number of appeals, be aware of common billing errors and how to correct them.

Hospital Inpatient Billing• Inpatient Billing Overview of Key Concepts:

-MPI ~ Master patient index: Main database of all the hospital’s patients.-PCN ~ Patient control number: Assigned at admission and unique to that confinement.-Registration/admission process ~ Gather personal and insurance information.-CMD ~ Charge Description Master: Shows all charges and items provided. Includes the procedure code, code and service description, charge, and revenue code. -Types of Payers ~ HMO, PPO, EPO, POS, Commercial and indemnity plans, Workers’ compensation, Medicare, Medicaid, TRICARE Prime, TRICARE Extra, TRICARE standard.-Submission of claims ~ dependent upon the medical record’s timely completion.-Inpatient ~ Hospital confinement is greater than 24 hours.

• UB-04 Claim Form Overview:-The hospital Uniform Bill claim form (UB-04) was implemented in 1996, and is also known as CMS-1450 form.-Hospitals bill carriers using the UB-04 claim form, also required by CMS.-Form divided into four sections: patient information, billing information, payer information, and diagnosis.-Form has 82 different form locators.-Form allows for a maximum of 8 diagnoses.

MO260 SEMINAR 5. TOPICS ICD-9-CM Organization of the ICD-9-CM Steps in ICD-9-CM Coding CPT...

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