Insurance Handbook for the Medical
Office
13th edition
Chapter 06
Procedural Coding
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
1
Lesson 6.1
Basics of Procedural Coding
1.
2.
3.
4.
5.
Explain the purpose and importance of coding for
professional services.
Define terminology used in Current Procedural
Terminology (CPT).
Demonstrate an understanding of CPT code
conventions.
Describe various methods of payment by insurance
companies and state and federal programs.
Describe the process in which the Healthcare
Common Procedure Coding System (HCPCS) and
relative value studies (RVS) are used to create a fee
schedule.
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2
Lesson 6.1
Basics of Procedural Coding (cont’d)
6.
7.
8.
9.
Interpret the meaning of CPT code book symbols.
Identify the complexity of evaluation and
management (E/M) services codes.
Compare a surgical package and a Medicare global
package.
Explain various types of code edits.
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3
Understanding the Importance of
Procedural Coding Skills
Procedure coding: the transformation of
written descriptions of procedures and
professional services into numeric
designations (code numbers)
Procedure codes are a standardized method
used to precisely describe the services
provided by physicians and allied health
professionals
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4
Current Procedural Terminology
Five-digit system for coding services
Two-digit add-on modifiers
Represents diagnostic and therapeutic services
System of choice from CMS
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5
Current Procedural Terminology
Level I: The AMA CPT codes and modifiers
(national codes)
Level II: CMS-designated codes and alpha
modifiers (national codes)
Level III: Codes specific to regional fiscal
intermediary or individual insurance carrier
(local codes) and not found in either levels I or II
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6
Current Procedural Terminology
Physician or provider service = CPT code
Supplies = HCPCS national code
Instructions to use from carrier = local code
Integrative healthcare products = Alternative
Billing Codes (ABCs)
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7
Methods of Payment
Fee schedule
Usual, customary, and reasonable
Multiple schedules can be used
Consistent charges and uniform application
Three fees determine reimbursement
Relative value scales or schedules
Units (RVUs) based on median charges for all
physicians during a given time period
Conversion factors translate units to dollars
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8
Usual, Customary, and Reasonable
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9
Resource-Based Relative Value
Scale
Resource-based Relative Value Scale
(RBRVS)
To distribute Medicare dollars more equitably
To control escalating costs from UCR
Fee schedule based upon relative values
Relative Value Unit (RVU)
Geographic adjustment factor (GAF)
Monetary conversion factor (CF)
RVU x GAF x CF = Medicare $ per service
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10
Resource-Based Relative Value
Scale
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11
Code Book Symbols
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12
Evaluation and Management Section
Divided into three sections
Office visits
•
•
Hospital visits
•
•
New patients
Established
Initial visit
Subsequent visits
Consultations
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13
Evaluation and Management Section
Elements of E/M codes
History
Examination
Medical decision-making
Nature of presenting problem
Counseling
Coordination of care
Time
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14
Evaluation and Management Section
Subsections of E/M
Hospital inpatient services
Consultation
Critical care
Pediatric and neonatal critical care
Emergency care
Preventative medicine
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15
Evaluation and Management Section
Selecting an E/M code
Determine category
Determine subcategory
Note key components
Note contributory factors
Determine appropriate E/M level and code
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16
Evaluation and Management Section
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17
Evaluation and Management Section
CPT Code Digit Analysis
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18
Evaluation and Management Section
Code Selection Criteria for Consultation
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19
Evaluation and Management Section
E/M Levels
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20
Surgery Section
Always start with the operative report
Assign code for postoperative diagnosis
Assign codes for additional diagnoses
Attach documentation to the claim form
Code only documented procedures
Confirm all diagnosis and procedure codes
Be sure to use appropriate modifiers
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21
Surgical Package for Non-Medicare
Cases
Includes:
The operation
Local infiltration; topical anesthesia or metacarpal,
metatarsal, or digital block
Subsequent to the decision for surgery, one related
E/M encounter on the date immediately before or on
the date of procedure (including 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)
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22
Surgery Section
Surgical Package vs. Medicare Global
Package
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23
Surgery Section
Surgery services
Never event
Transfer to another facility
Follow-up (postoperative) days
Repair of lacerations
Multiple lesions
Supplies
Incident-to services
Prolonged services, detention, or standby
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24
Unlisted Procedures
Codes assigned for unusual procedures
Supporting documentation is required to justify
the procedures
Comprehensive list of unlisted codes is at
the beginning of each section
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25
Comprehensive and Component
Edits
Code combinations that are specified as
“separate procedures” by the CPT
Codes that are included as part of a more
extensive procedure
Code combinations that are restricted by
the guidelines outlined in the CPT
Component codes that are used incorrectly
with the comprehensive code
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26
Mutually Exclusive Code Edits
Code combinations that are restricted by
the guidelines outlined in the CPT
Procedures that represent two methods of
performing the same service
Procedures that cannot reasonably be
done during the same session
Procedures that represent medically
impossible or improbable code
combinations
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27
Coding Guidelines for Code Edits
Bundling: to group codes together that are
related to a procedure
Unbundling: coding and billing numerous
CPT codes to identify procedures usually
described by a single code
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28
Coding Guidelines for Code Edits
Downcoding: when a coding system of an
insurance carrier converts a code to reduce
the level of codes on an insurance claim
Upcoding: the deliberate manipulation of
CPT codes for increased payment
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29
Code Monitoring
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30
Lesson 6.2
Practice Diagnostic Coding
10.
11.
Explain how to choose accurate procedural codes
for descriptions of services and procedures
documented in a patient’s medical record.
Explain correct usage of modifiers in procedure
coding.
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31
Helpful Hints in Coding
Office visits
Be careful with assignment the appropriate E/M
code for standing orders
Some insurance policies only allow 2 moderateor high-complexity office visits per patient per
year
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32
Helpful Hints in Coding
Drugs and injections
Name, amount, dosage, strength, how it was
administered
Roster billing for mass immunizations for
Medicare patients
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33
Helpful Hints in Coding
Adjunct codes
Identify special services and reports
Basic life or disability evaluation services
Code 99450 – life or disability insurance
Codes 99455 and 99456 – work-related or
medical disability examinations
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34
Code Modifiers
Modifiers 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
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35
Code Modifiers
Modifier -22: Increased Procedural
Services
Modifier -25: Significant, Separately
Identifiable Evaluation and Management
Service
Modifier -26: Professional Component
Modifier -51: Multiple Procedures
Modifier -52: Reduced Services
Modifier -57: Decision for Surgery
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36
Code Modifiers
Modifier -58: Stages or Related Procedure
Modifiers -62, -66, -80, -81: More Than One
Surgeon
Modifier -99: Multiple Modifiers
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37
Healthcare Common Procedure
Coding System
Level II modifiers may be used by some
commercial payers
Two alpha digits, two alphanumeric characters,
or single alpha digit
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38
Questions?
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39
