Welcome to an introduction to the world of coding! In order to correctly report on health-care claims the conditions that patients have and the services they receive during office visits, medical assistants need to understand the basics of medical coding. Medical coding is the translation of medical terms for diagnoses and procedures into code numbers selected from standardized code sets. Codes on health-care claims explain to payers that the services patients received were medically necessary and complied with the payer's rules. Finding the correct codes can re-quire detective work! The reward is accurate claims that bring the maximum appropriate reimbursement to the physicians in your medical office.

Outline

• Diagnosis Codes: The ICD-9-CM
• Procedure Codes: The CPT
• HCPCS
• Avoiding Fraud: Coding Compliance

Learning Outcomes

After completing Chapter 16, you will be able to:

 16.1 Explain the purpose and format of the ICD-9-CM volumes that are used by medical offices.
 16.2 Describe how to analyze diagnoses and locate correct codes using the ICD-9-CM.
 16.3 Identify the purpose and format of the CPT.
 16.4 Name three key factors that determine the level of Evaluation and Management codes that are selected.
 16.5 Identify the two types of codes in the Health Care Common Procedure Coding System (HCPCS).
 16.6 Describe the process used to locate correct procedure codes using CPT.
 16.7 Explain how medical coding affects the payment process.
 16.8 Define fraud and provide examples of fraudulent billing and coding.

Summary

The ICD-9-CM is used for diagnostic coding in the United States. ICD-9 codes are required for reporting patients' conditions on health-care claims. Codes are made up of three, four, or five numbers and a description. New codes are issued annually, and current codes should be used because they can affect billing and reimbursement. The ICD-9 has two volumes that are used in outpatient medical practices: the Tabular List (Volume 1) and the Alphabetic Index (Volume 2). To find a code, use the Alphabetic Index first. Its main terms may be followed by related subterms. The codes themselves are organized into 17 chapters and are listed in numerical order in the Tabular List. Code categories consist of three-digit groupings of a single disease or a related condition. Further clinical detail is shown by 4th or 5th digit code modifiers that give further specificity to the diagnosis code. When available, these 4th and 5th digits must be used. The conventions, notes, and guidelines within the ICD-9 manual must be observed to correctly select codes. Diagnosis codes, known as V codes, identify encounters for reasons other than illness or injury and are used for healthy patients receiving routine services (physical exams), for therapeutic encounters such as chemotherapy, for a problem that is not currently affecting the patient's condition (such as a family history of cancer), and for pre-operative evaluations. Diagnostic E codes, which are never used as primary codes, classify the illnesses and injuries resulting from various environmental events. CPT provides a standardized list of five-digit procedure codes for medical, surgical, and diagnostic services. Add-on codes and modifiers may also be selected. CPT is divided into six sections: (1) evaluation and management, (2) anesthesiology, (3) surgery, (4) radiology, (5) pathology and laboratory, and (6) medicine. The three main factors that influence the level of service for coding purposes are the type and extent of (1) history, (2) examination, and (3) medical decision making. Surgical packages and laboratory panels should be coded as single procedures rather than broken into component parts (unbundling). The Health Care Common Procedure Coding System (HCPCS), used to code Medicare services and that more recently has been adopted by some private payers, has codes from CPT (Level I) as well as Level II national codes. Diagnoses and procedures must be correctly linked when services are reported for reimbursement because payers analyze this connection to determine the medical necessity of the charges. Correct claims also comply with all applicable governmental regulations and requirements. Codes should be appropriate and well documented within the patient's medical record, as well as compliant with each payer's rules. A medical practice compliance plan addresses compliance concerns of governmental regulations (for example, HIPAA), as well as government and private payers. Furthermore, having a formal process in place is a sign that the practice has made a good-faith effort to achieve compliance in coding.