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The Importance of Accurate Medical Coding for Proper Reimbursement

While the owners of private medical practices, hospitals, clinics, and other healthcare facilities can generally claim the cost of medical equipment, surgical equipment,and office supplies as tax write offs,1 getting properly reimbursed by insurance companies, and other payers for patient services and procedures, requires a different system altogether: medical coding.

Medical coding is the translation of healthcare diagnoses, procedures, medical services, and medical equipment into universal codes.

Medical coders are specially-trained individuals who interpret physician’s notes from patient charts and identify the appropriate code for the services or procedures provided. This not only creates a record of what was provided,it also ensures that the doctor and/or medical facility is properly reimbursed by the insurance company, CMS (Medicare/Medicaid), or other third-party payer. Accurate coding is therefore vital to the financial success of any healthcare organization.

Ahead we’ll look at the main medical coding systems used today and explore why it’s so important for healthcare administrators to code accurately.



The Different Medical Coding Systems

International Classification of Diseases (ICD)
This standardized system of classifying diagnoses and in-patient procedures is used by healthcare facilities in more than 100 countries. In fact, the majority (70%) of the world’s healthcare expenditures are distributed using the ICD system.

ICD-10 is the latest version of the system, which went into effect in October 2015. It has two parts

  • ICD-10-CM, which is used in all healthcare settings for diagnosis coding.
  • ICD-10-PCS, which is used in hospital inpatient settings to identify inpatient procedures.

ICD-10 replaced the previous version (ICD-9)—a significant change, as ICD-10 is more sophisticated, complex, and comprehensive than the former version.

One of the biggest complaints about ICD-9 was lack of specificity—for example, if a patient presented to the doctor’s office with a burn on his right leg, ICD-9 did not allow the medical coder to specify which leg sustained the burn. ICD-10 allows for this kind of specificity, resulting (it is hoped) in more accurate record keeping and billing.

Tens of thousands of additional codes were added to ICD-10, adding both to the specificity and the complexity of the system. The chart below highlights how significant the changes are in ICD-10.

ICD-9

ICD-10

Diagnosis Codes

approx. 13,000

approx. 68,000

Procedure Codes

approx. 11,000

approx. 72,000

Code Length

3 to 5 digits

3 to 7 digits

Code Form

primarily numeric

alpha-numeric


Current Procedural Terminology (CPT)
Developed by the American Medical Association (AMA), CPT codes identify different medical, surgical, and diagnostic services. There are nearly 10,000 CPT codes in all, covering everything from preventive medicine services, to psychiatry, to home health services.

CPT differs from ICD in that CPT identifies the services delivered rather than the diagnosis. CPT codes consist of five-digits, in numeric or alphanumeric form. CPT codes are organized into three different categories, as follows:

  • Category I: Five-digit codes that describe procedures or services.
  • Category II: Alphanumeric codes used to track performance (typically used optionally); they are reviewed by an advisory body to the CPT called the Performance Measures Advisory Group (PMAG).
  • Category III: Provisional codes for emerging technology, procedures, and services.

HCPCS-Level II
HCPCS stands for Healthcare Common Procedure Coding System. Developed by the Centers for Medicare & Medicaid Services (CMS), these codes are primary for identifying items, durable medical equipment, supplies, and non-physician services (such as ambulance services) that are billed to Medicare/Medicaid, as well as other healthcare payers, such as HMO plans, veteran’s health care plans, and others.

Why Accuracy Is So Important in Medical Coding

Medical coding requires an understanding of medical terminology and basic knowledge of human anatomy and physiology—without such understanding, medical billers could submit invoices to insurance companies listing the wrong medical condition or diagnosis. The resulting underpayments or overpayments would hurt medical practices financially and could land them in trouble for not complying with government regulations and/or private payer policies.



Proper Medical Coding Ensures Accurate Reimbursement
Insurance Companies, clearinghouses, and other healthcare payers rely on healthcare professionals and administrators to accurately and completely describe what medical services, tests (such as CT scans and MRI's) procedures, and medical devices (such as blood pressure monitors) were provided to patients. When a service, test or procedure appears out of place, claims may be denied or rejected. Common reasons for denials or rejections include:
  • Incorrect patient information (such as name, DOB, insurance ID number, etc.)
  • Incorrect codes (using confusing ICD, CPT, or HCPCS codes, for example)
  • Incorrect provider information (address, name, etc.)
  • Leaving out codes altogether

Then there are fraudulent coding errors, such as upcoding - intentionally listing a code for a service that wasn’t actually administered,and/or entering a code for a more expensive procedure than the patient received.

Undercoding is another fraudulent process wherein the provider intentionally leaves out a procedure or codes for a less serious one in order to avoid an audit or to try to save a patient money. It goes without saying that upcoding, undercoding, and other fraudulent submissions are absolute no-no’s to be avoided.

Let’s look at an example of a coding oversight:

A patient presents to the clinic with chronic pain in his right elbow. The physician orders an x-ray and an arthroscopy—common diagnostic tests for this problem. She also orders blood work (for an unrelated condition) but fails to note why she ordered it. The medical coder also fails to dig deeper and bills the insurance company without clarifying the reason for the blood work. While the x-ray and arthroscopy support the elbow condition, the blood work is a question mark (at least to the payer). The claim is denied or rejected.

The medical coder or biller should have queried the doctor about the blood work and whether it supported an existing or new diagnosis before billing. These kinds of errors lead to inefficiencies that negatively impact the bottom line of medical providers, hospitals, and other facilities.



Proper Medical Coding Improves Patient Safety and Outcomes
Medical coders play a larger role in improving patient safety and outcomes than they may know. The medical codes we mentioned earlier (ICD, CPT, etc.) are used in big data to assess the health of a population, identify issues with quality of care, and even influence public policy.

CPT Category II codes, for example, are periodically reviewed by an advisory board to evaluate the performance of physicians and other healthcare professionals, hospitals, and other facilities, and assess the quality of care delivered to patients.

By assigning codes appropriately and accurately, medicals coders help identify preventable complications, which could spur quality initiatives to help prevent such complications in the future; proper coding also helps organizations assess the cost associated with preventable complications.

Hospital Acquired Conditions (HACs) are one area in which medical coders can make a tremendous difference. By choosing the right code that identifies a condition as an HAC—that is, a condition that was not preexisting but rather developed as a consequence of medical care—codersplay a key role in helping organizations identify and track these preventable conditions.

In short, accurate medical coding:
  • Allows for the efficient transmission of huge amounts of data to insurance companies and other healthcare payers - consider that in 2012 alone there were 928.6 million physician office visits in the U.S.
  • Enables administrators to see and address inefficiencies in their organization.
  • Allows for uniform documentation between different medical facilities, since the codes are universal.


Medical coding is a vital part of ensuring the health of patients, the financial health of medical facilities—even the well-being of society in general; these codes , when viewed as a composite, paint a picture of the health of a country as a whole. This information is used to address problems within individual organizations and larger systems, and it can help fuel public health initiatives.

Sources
  1. http://medicaleconomics.modernmedicine.com/medical-economics/news/modernmedicine/modern-medicine-feature-articles/tax-writeoffs-what-take-what-
  2. http://www.who.int/classifications/icd/en/
  3. http://www.cdc.gov/nchs/data/ahcd/namcs_summary/2012_namcs_web_tables.pdf

Improve Patient Care & Increase Reimbursement with These Medical Tests
Ancillary Service
CPT Codes Total Reimbursement Cost Per Test (Disposables)
Test Length
Click on Link for
Medical Equipment
Allergy Testing 95004 (multiplied times each antigen tested; 95004 (avrge. $6.00) x 72 antigens (standard panel) $450 $85
17 Minutes
Allergy Testing
Ear Irrigation 69210 (Removal impacted cerumen requiring instrumentation, unilateral) $50.15 $1.50 5 Minutes Welch Allyn Ear Wash System
Nerve Conduction 95912 (Nerve conduction studies; 11-12 studies ) $250 $2.00 20-25 Minutes
Axon II
Holter 93224 (External electrocardiographic recording up to 24 hours by continuous rhythm recording and storage) $125.00 $6.00
3 minute Patient Hook up;
5-10 minutes to print and edit report
Nasiff Holter
Spirometry
94010 (Spirometry, including graphic record, total and timed vital capacity), 94060 $36.18 $1.50 5 Minutes Astra 300
EKG 93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report) $16.84 0.85¢ 5 Minutes Cardio7, Nasiff Cardiocard
Small Lesion Skin Removal 11200 (Removal of skin tags, multiple fibrocutaneous tags, any area; up to and including 15 lesions) $88.12 0 1 Minute Aaron 940 Desiccator
Glaucoma Testing 92140 (Provocative tests for glaucoma, with interpretation and report, without tonography) $63.76
0 2 Minutes Diaton Tonometer
Stress Test 93015 (Cardiovascular stress test using maximal or submaximal treadmill or bicycle exercise, continuous electrocardiographic monitoring, and/or pharmacological stress; with supervision, interpretation and report) $75.94 $2 20-30 Minutes CardioCard Stress
Tympanometer 92567 (Tympanometry - impedance testing) $14.69 0 1 Minute Racecar Tympanometer
Audiometer 92551 (Screening test, pure tone, air only), 92552 (Pure tone audiometry - threshold; air only) $11.82 - $30.81 0 1 Minute AMBCO
ABI 93922 (Limited bilateral noninvasive physiologic studies of upper or lower extremity arteries) $89.20 0.25¢ < 5 Minutes LifeDop L250ABI
Sleep Studies 95806 (Sleep study, unattended, simultaneous recording of, heart rate, oxygen saturation, respiratory airflow, and respiratory effort) $173.02 $25
Overnight, Patient Hookup -
< 5 Minutes
Sleepview
Ultrasound Abdominal Aorta 76770 (Ultrasound, retroperitoneal (eg, renal, aorta, nodes), real time with image documentation; complete) $134.69 $1.00 10 Minutes Abdominal USB Probe
Bone Densitometer 77081 (Dual-energy X-ray absorptiometry (DXA), bone density study, 1 or more sites; appendicular skeleton (peripheral)) $27.94 0.25¢ 15 Minutes MiniOmni
Fall Prevention Balance Testing 92542 (Positional nystagmus test, minimum of 4 positions, with recording), 92546 (Sinusoidal vertical axis rotational testing), 92547 (Use of vertical electrodes (List separately in addition to code for primary procedure), 92270 (Electro-oculography with interpretation and report) $225.12 $2.00 12-15 Minutes VAT
Autonomic Testing and PWV 95921 (Testing of autonomic nervous system function; cardiovagal innervation (parasympathetic function), including 2 or more of the following: heart rate response to deep breathing with recorded R-R interval, Valsalva ratio, and 30:15 ratio), 95922 (Testing of autonomic nervous system function; vasomotor adrenergic innervation (sympathetic adrenergic function), including beat-to-beat blood pressure and R-R interval changes during Valsalva maneuver and at least 5 minutes of passive tilt), 93923 (Complete bilateral noninvasive physiologic studies of upper or lower extremity arteries, 3 or more levels), 93040 (Rhythm ECG, 1-3 leads; with interpretation and report) $200.00 $1.00 15 Minutes ANS
Vision Screening 99173 (Screening test of visual acuity, quantitative, bilateral) $2.87 0 2 Minutes Titmus
PT/INR Testing 85610-QW (Prothrombin time, -QW indicates CLIA-Waived) $5.49 $3.9 13 Seconds Coag-Sense
Lipid Testing 80061-QW: (Lipid Panel (CLIA-Waived)) , 82947-QW: (Glucose; quantitative, blood (CLIA-Waived)) $22.54 $9.00 2 Minutes LipidPlus
Holter Monitor 93224 (External electrocardiographic recording up to 48 hours by continuous rhythm recording and storage; includes recording, scanning analysis with report, review and interpretation by a physician or other qualified health care professional) $91.71 $6.00
24 Hours, Patient Hookup -
< 5 Minutes
CardioCard Holter
24hr. BP Testing 93784 (Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; including recording, scanning analysis, interpretation and report) $54.09 0
24 Hours, Patient Hookup -
< 5 Minutes
ABPM-6100
Sudomotor Function 95923 (Testing of autonomic nervous system function; sudomotor, including 1 or more of the following: quantitative sudomotor axon reflex test (QSART), silastic sweat imprint, thermoregulatory sweat test, and changes in sympathetic skin potential) $207.41 0 2 Minutes SudoPath
Fetal Monitoring 59025 (Fetal Non-Stress Test) $48.72 0 30 Minutes BT350 (Single & Twins)
Colposcope 57420 (Colposcopy of the entire vagina, with cervix if present), 57456 (Colposcopy of the cervix including upper/adjacent vagina; with endocervical curettage) $94.21 0 20 Minutes ZoomStar with Trulight
Cryosurgery 17110 (Destruction (eg, laser surgery, electro surgery, cryosurgery, chemosurgery, surgical curettement), of benign lesions other than skin tags or cutaneous vascular proliferative lesions; up to 14), 11200 (Removal of skin tags, multiple fibrocutaneous tags, any area, up to and including 15 lesions) $69.85 $1.20 10 Minutes LL100 Cryosurgical System
Pulse Oximetry 94760 (Noninvasive ear or pulse oximetry for oxygen saturation; single determination) $3.22 0 < 1 Minute BCI Digit Finger Oximeter
Overnight Oximetry 94762 (Noninvasive ear or pulse oximetry for oxygen saturation; by continuous overnight monitoring (separate procedure)) $24.72 0 Overnight, Patient Hookup - < 5 Minutes SPO 7500 Wrist Oximeter
Urinalysis 81002 (Urine Reagent Test Srips - Accutest) $3.49 .19¢ 2 minutes Accutest Urine Reagent Strips
Urinalysis 81002 (Urine Reagent Test Srips - Accustrip) $3.49 .22¢ 2 Minutes Accustrip Urine Reagent Strips
Uriscreen 81007QW (Urinalysis, bacteriuria screen) $3.50
$1.35 2 minutes Accutest Uriscreen
Rapid Strep Test 87880QW (Infectious agent antigen detection by immunoassay with direct optical observation; Streptococcus, group A) $16.36 $1.28 5 Minutes Accustrip Value+ Strep A Rapid Test Strep
H. Pylori Test 86318QW (Immunoassay for infectious agent antibody, qualitative or semiquantitative, single step method (eg, reagent strip)), 86677 - Antibody; Helicobacter pylori $17.66 $3.68 3-7 Minutes Accustrip H. Pylori Rapid Test
H. Pylori Urease Test 87077QW (A one hour rapid urease test for the detection of H.Pylori (CLIA Waived)) $11.03 $5.50 1 Minute - 1 Hour Accutest H. Pylori Urease Test
Mononucleosis Test 86308QW (Heterophile antibodies; screening (CLIA Waived)), 86308 (Heterophile antibodies; screening) $7.06 $3.50 8 Minutes Mononucleosis Rapid Test
Fecal Occult Blood Test (CS612) 82274QW (Blood, occult, by fecal hemoglobin determination by immunoassay, qualitative, feces, 1-3 simultaneous determinations. (CLIA Waived)), G0328QW - Colorectal cancer screening; fecal occult blood test, immunoassay, 1-3 simultaneous. (CLIA Waived) $21.70 $6.08 5-10 Minutes Accutest Immunological Fecal Occult Blood Test
Fecal Occult Blood Test (CS632) 82274QW (Blood, occult, by fecal hemoglobin determination by immunoassay, qualitative, feces, 1-3 simultaneous determinations. (CLIA Waived)), G0328QW - Colorectal cancer screening; fecal occult blood test, immunoassay, 1-3 simultaneous. (CLIA Waived) $21.70 $2.40 5-10 Minutes Accutest Immunological Fecal Occult Blood Test
Fecal Occult Blood Test (CS601) 82274QW (Blood, occult, by fecal hemoglobin determination by immunoassay, qualitative, feces, 1-3 simultaneous determinations. (CLIA Waived)), G0328QW (Colorectal cancer screening; fecal occult blood test, immunoassay, 1-3 simultaneous. (CLIA Waived)) $21.70 $5.40 5-10 Minutes Accutest Immunological Fecal Occult Blood Test
Fecal Occult Blood Test (CS627) 82274QW (Blood, occult, by fecal hemoglobin determination by immunoassay, qualitative, feces, 1-3 simultaneous determinations. (CLIA Waived)), G0328QW (Colorectal cancer screening; fecal occult blood test, immunoassay, 1-3 simultaneous. (CLIA Waived)) $21.70 $1.60 5-10 Minutes Accutest Immunological Fecal Occult Blood Test
Fecal Occult Blood Test (CS625) 82274QW (Blood, occult, by fecal hemoglobin determination by immunoassay, qualitative, feces, 1-3 simultaneous determinations. (CLIA Waived)), G0328QW (Colorectal cancer screening; fecal occult blood test, immunoassay, 1-3 simultaneous. (CLIA Waived)) $21.70 $3.28 5-10 Minutes Accutest Immunological Fecal Occult Blood Test
Hypothyroidism Test 84443QW (Thyroid stimulating hormone (TSH) (CLIA Waived)) $23.69 $10.00 10 Minutes Accutest THS Rapid Test for Thyroid Stimulating Hormone
Sleep Studies 94762 (Recording of blood oxygen saturation and heart rate in clinical, ambulatory and sleep related settings) $20.05 0 Overnight Home Unattended Study SleepPro 3000 Wristwatch Recording System
Drug Test G0434QW (Drug screen, other than chromatographic; any number of drug classes, by clia waived test or moderate complexity test, per patient encounter) $19.84 $20.41 5 Minutes Accutest Drug Test Cups
Pregnancy Test (Urine Only)
81025QW (Ensure early pregnancy detection while preventing cross reactivity with other hormones present in patient samples) $8.63 $2.62
10 Seconds
Standio True 20 Pregnancy Tests
Pregnancy Test (Urine or Serum) 81025QW (Ensure early pregnancy detection while preventing cross reactivity with other hormones present in patient samples) $8.63 $2.86
10 Seconds
Standio True 20 Pregnancy Tests
Hb (Hemoglobin (Hb) Test 85018 QW (For the quantitative determination of hemoglobin in non-anticoagulated capillary whole blood or anticoagulated venous whole blood in EDTA or sodium heparin.) $3.31 $1.36
< 15 Seconds
AimStrip Hb Meter Starter Kit
Blood Glucose Test 829472W (Tracking blood glucose concentration through frequent testing is an important part of proper diabetes care) $6.80 0.16¢ 10 Seconds AimStrip Plus, Blood Glucose Meter Kit

Note: General reimbursement information is being provided only as of January 1, 2016, on an “as is” basis. Medical Device Depot makes no representation or warranties of any kind to the accuracy or applicability of any content contained herein. The information does not constitute professional or legal advice on coding or reimbursement and should be used at your soul liability and discretion. All coding, policies and reimbursement information is subject to change without notice. Before filing any claims, it is the provider’s responsibility to verify current requirements and policies with the payer.

 
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