Basic Cpt/Hcpcs Coding

Basic CPT/HCPCS Coding 2006 Edition

Gail I. Smith, MA, RHIA, CCS-P

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CPT five-digit codes, nomenclature, and other data are the property of the American Medical Association. Copyright ©2006 by the American Medical Association. All rights reserved. No fee schedules, basic unit, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein. This workbook must be used with the current edition of Current Procedural Terminology (code changes effective January 1, 2006), published by the American Medical Association (AMA). Any five-digit numeric CPT codes, service descriptions, instructions, and/or guidelines are copyright 2006 (or such other date of publication of CPT as defined in the federal copyright laws) by the AMA. CPT is a listing of descriptive terms and five-digit numeric identifying codes and modifiers for reporting medical services performed by physicians. This presentation includes only CPT descriptive terms, numeric identifying codes, and modifiers for reporting medical services and procedures that were selected by the American Health Information Management Association (AHIMA) for inclusion in this publication. AHIMA has selected certain CPT codes and service/procedure descriptions and assigned them to various specialty groups. The listing of a CPT service/procedure description and its code number in this publication does not restrict its use to a particular specialty group. Any procedure/service in this publication may be used to designate the services rendered by any qualified physician. Copyright ©2006 by the American Health Information Management Association. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, photocopying, recording, or otherwise, without the prior written permission of the publisher. The Web sites listed in this book were current and valid as of the date of publication. However, Web page addresses and the information on them may change or disappear at any time and for any number of reasons. The user is encouraged to perform his or her own general Web searches to locate any site addresses listed here that are no longer valid. Portions of this volume were originally published in Clinical Coding Workout 2006, AHIMA product number AC201506. ISBN 1-58426-152-8 AHIMA Product Number AC200606 Claire Blondeau, Project Editor Melanie Endicott, MBA/HCM, RHIA, CCS, Reviewer Elizabeth Lund, Editorial Assistant Melissa Ulbricht, Editorial/Production Coordinator Ann Zeisset, RHIT, CCS, CCS-P, Technical Reviewer Ken Zielske, Publications Director American Health Information Management Association 233 North Michigan Avenue, Suite 2150 Chicago, Illinois 60601-5800 www.ahima.org

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Contents

About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Chapter 1

Introduction to Clinical Coding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Chapter 2

Application of the CPT System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Chapter 3

Modifiers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Chapter 4

Surgery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Chapter 5

Radiology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

Chapter 6

Pathology and Laboratory Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

Chapter 7

Evaluation and Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

Chapter 8

Medicine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

Chapter 9

Anesthesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

Chapter 10

HCPCS Level II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

Chapter 11

Reimbursement in the Ambulatory Setting . . . . . . . . . . . . . . . . . . . . . . . 229

Appendix A

References, Bibliography, and Web Resources . . . . . . . . . . . . . . . . . . . . 241

Appendix B

Evaluation and Management Documentation Guidelines . . . . . . . . . . . . 245

Appendix C

Additional Practice Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249

Appendix D

Answers to Chapter Review Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . 307

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339 iii

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About the Author

Gail I. Smith, MA, RHIA, CCS-P, is an associate professor and director of the health information management program at the University of Cincinnati in Cincinnati, Ohio. She has been an HIM professional and educator for more than thirty years. Prior to joining the faculty at the University of Cincinnati, she was director of a health information technology associate degree program and was health information manager in a multihospital healthcare system. Ms. Smith also is a coding consultant and a frequent presenter at conferences throughout the United States. An active member of the American Health Information Management Association (AHIMA), she has served on the board of directors and several of AHIMA’s committees and task forces. Ms. Smith received a bachelor of science degree in health information management from The Ohio State University in Columbus and a master of arts degree in education from The College of Mt. St. Joseph in Cincinnati.

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Preface

This workbook provides basic training and practice in the application of procedural codes from the Current Procedural Terminology (CPT) and the Healthcare Procedural Coding System (HCPCS). CPT is published by the American Medical Association (AMA). Updated annually on January 1, CPT is a proprietary terminology created and maintained by the AMA. Its purpose is to provide a uniform language for describing and reporting the professional services provided by physicians. HCPCS is maintained by the Centers for Medicare and Medicaid Services (CMS). Its purpose is to provide a system for reporting the medical services provided to Medicare beneficiaries. HCPCS is made up of two parts: Level I is composed entirely of the current version of CPT; HCPCS Level II provides codes to represent medical services that are not covered by the CPT system, for example, medical supplies and services performed by healthcare professionals who are not physicians. Like previous editions, the 2006 edition of Basic CPT/HCPCS Coding is intended for students who have limited knowledge of, or experience in, CPT/HCPCS coding, and also as a resource and review guide for professionals. The instructional materials in this workbook are not specific to any particular practice setting, and they apply to both hospital-based and officebased coding. The exercises provide hands-on experience in coding some of the more common procedures and services provided by physicians and other healthcare professionals. Many healthcare facilities and providers develop their own systematic methods for assigning CPT codes to frequently performed diagnostic procedures. For this reason, this workbook provides only minimal practice in assigning CPT/HCPCS codes for diagnostic procedures. The CPT/HCPCS coding process requires coders to apply analytic skills in combination with a practical knowledge of medical science. To become effective coders, students must be able to apply their knowledge of medical terminology, anatomy and physiology, pathophysiology, pharmacology, and medical–surgical techniques. This workbook assumes that students will already have a basic understanding of these subject areas. The primary objectives of this workbook include the following: • To provide a basic introduction to the format of CPT codes as well as CPT coding conventions • To demonstrate different ways to locate CPT codes through the use of the codebook’s index • To identify ways to ensure accurate code assignment through the application of coding guidelines from the AMA and CMS • To deliniate the documentation necessary for code assignment vii

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Preface

Specifically, chapter 1, Introduction to Clinical Coding, discusses the purpose of CPT/HCPCS codes. It also addresses diagnostic coding and the Medicare requirements for claims submission. Chapter 2, Application of the CPT System, introduces the CPT coding conventions and explains the application of CPT codes for healthcare reimbursement. Chapter 3, Modifiers, provides an overview of the purpose and use of CPT and HCPCS Level II modifiers. Chapter 4, Surgery, reviews the coding guidelines associated with the surgical procedures performed to treat illnesses and injuries of the various anatomical systems. It emphasizes the surgical procedures that are performed most commonly in the ambulatory setting. Chapter 5, Radiology, discusses the claims process for radiology services performed by physicians and hospital-based outpatient providers. The chapter also discusses the principles of radiology code reporting. Chapter 6, Pathology and Laboratory Services, addresses the code assignment process for common laboratory tests and procedures performed, supervised, or interpreted by pathologists and other physicians. Chapter 7, Evaluation and Management Services, provides a concise explanation of the evaluation and management section of CPT. The chapter also provides practice exercises designed to address the complexities of assigning evaluation and management codes. Chapter 8, Medicine, provides a general overview of the procedures and services described in the medicine chapter of the CPT codebook. Chapter 9, Anesthesia, introduces the codes used by the physicians who provide or supervise anesthesia services. Chapter 10, HCPCS Level II, reviews the format and usage of HCPCS National Codes and modifiers. Chapter 11, Reimbursement in the Ambulatory Setting, explains the claims process for ambulatory services, which is based on correct CPT code assignment. A skills practice at the end of this chapter asks students to review sections of a CMS-1500 form to determine the accuracy of code assignment. This practice reinforces the students’ understanding of the CPT/HCPCS coding principles and guidelines discussed in the preceding chapters. The 2006 edition of Basic CPT/HCPCS Coding has been expanded and updated in several ways this year. As in previous editions, review exercises are interspersed in each chapter. Appendix C of Basic CPT/HCPCS Coding has been expanded and updated to include new exercises and operative reports. A new appendix D includes keys to these chapter review exercises for student reference. Also included this year is a chapter test at the conclusion of each chapter. Keys to the chapter tests and appendix C exercises and operative reports are available in the supplementary materials for instructors. This book must be used with the 2006 edition of Current Procedural Terminology (CPT 2006) (code changes effective January 1, 2006), published by the AMA. The HCPCS Level II codes included in this publication were current as of October 1, 2005. The most current version of the HCPCS Level II codes can be found under the Utilities/Miscellaneous heading on the CMS Web site: www.cms.gov/providers/pufdownload/. Students beginning a CPT course of study should have several additional references to help them assign codes. Suggested references and recommended readings that may be helpful to students are listed in appendix A of this workbook. Chapter 7 of this publication is based on the evaluation and management documentation guidelines developed jointly by the AMA and CMS in 1997. For additional information on these guidelines or to check for additional revisions, students and educators should visit the CMS Web page at www.cms.gov.

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Preface

The Web sites listed in appendix A and elsewhere in this workbook were current and valid as of November 1, 2005. However, Web addresses and the information on Web sites may change or disappear at any time and for any number of reasons. Students and educators are encouraged to perform their own Web searches to locate the current addresses of any sites that can no longer be found under the addresses provided in this workbook. AHIMA provides supplementary materials for educators who use this workbook in their classes. Materials include lesson plans, keys to practice exercises in appendix C, PowerPoint slides, and other educational resources. All answer keys are available to instructors in online format from the individual book page in the AHIMA Bookstore (imis.ahima.org/orders), and also are posted on the AHIMA Assembly on Education Community of Practice (AOE CoP) Web site. Instructors who are AHIMA members can sign up for this private community by clicking on the help icon within the CoP home page and requesting additional information on becoming an AOE CoP member. An instructor who is not an AHIMA member or a member who is not an instructor may contact the publisher at [email protected].

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Acknowledgments

AHIMA wishes to acknowledge Rita A. Scichilone, MHSA, RHIA, CCS, CCS-P, CHC; the late Rita Finnegan, RHIA, CCS; and Toula Nicholas, RHIT, CCS, CCS-P, who served as authors of previous editions of Basic CPT/HCPCS Coding, the members of the AHIMA Professional Practice Resources team who prepared Clinical Coding Workout 2006, for generously agreeing to republish portions of their work in this book (June Bronnert, RHIA, CCS; Melanie Endicott, MBA/HCM, RHIA, CCS; Susan Hull, MPH, RHIA, CCS, CCS-P; Rita Scichilone, MHSA, RHIA, CCS, CCS-P; Mary Stanfill, RHIA, CCS, CCS-P; and Ann Zeisset, RHIT, CCS, CCS-P), as well as the many internal and external reviewers who have contributed throughout the years to this publication.

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Chapter 1

Introduction to Clinical Coding

Several medical terminologies and classification systems are used to document and report information related to healthcare services in the United States. The International Classification of Diseases, Clinical Modification, currently in its ninth revision (ICD-9-CM), is used to describe and report the illnesses, conditions, and injuries of patients who require medical services. ICD-9-CM is made up of a series of numerical and alphanumerical codes and code descriptions that represent very specific illnesses and injuries. Similarly, the services provided by physicians and other healthcare professionals are described and reported by using terminologies and classification systems. The International Classification of Diseases, Clinical Modification, provides a system for coding medical procedures performed in the inpatient departments of hospitals, but two other systems apply to the services provided by physicians and other medical providers in hospital-based outpatient departments, physicians’ offices, and other ambulatory settings: the Current Procedural Terminology and the Healthcare Common Procedure Coding System.

Current Procedural Terminology The Current Procedural Terminology (CPT), published by the American Medical Association (AMA), provides a system for describing and reporting the professional services furnished to patients by physicians. CPT generally applies to the services provided to patients who are not covered by the federal Medicare program. CPT was initially developed in 1966 and was designed to meet the reporting and communication needs of physicians. The system was adopted for application to the Medicare reimbursement system in 1983. Since that time, CPT has been widely used as the standard for outpatient and ambulatory care procedural coding and reimbursement. The information represented by CPT codes is also used for several purposes other than reimbursement, including: •

Trending and planning outpatient and ambulatory services

•

Benchmarking activities that compare and contrast the services provided by similar non–acute care programs

•

Assessing and improving the quality of patient services

The CPT codebooks include several additional appendixes and an index of procedures. CPT codebooks and codes are updated annually, with additions, revisions, and deletions 1

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Chapter 1

becoming effective on January 1 of each year. A new edition of the CPT codebook is published annually, and the new edition should be purchased every year to ensure accurate coding. Healthcare providers are expected to begin using the newest edition for encounters on January 1, and there is no longer a grace period during which claims based on out-of-date codes will be accepted.

CPT Category I The CPT codebook includes a general introduction followed by six main sections that together make up the list of Category I CPT codes: Evaluation and Management Anesthesia Surgery Radiology Pathology and Laboratory Medicine Specific coding guidelines are provided for each of the main sections. The Category I codes in each of the main sections are further broken down into subsections and subcategories according to the type of service provided and the body system or disorder involved. For example, code 76645—Ultrasound, breast(s) (unilateral or bilateral), B scan and/or real time with image documentation—appears in the radiology section under the subsection entitled Diagnostic Ultrasound and the subcategory Chest. Similar procedures are grouped to form ranges of codes. For example, the range of codes from 19140 through 19240 represents the various types of mastectomy in the subsection covering the integumentary system in the surgery section. The codes in each of the six main sections (or Category I) of the CPT codebook are composed of five digits and are arranged in numerical order within each section.

CPT Supplementary Codes CPT also provides three types of supplementary codes: Category II codes, Category III codes, and modifiers. Each of these code sets is listed and explained in a separate section. The Category II and III sections are placed after the medicine codes in the codebook. The list of modifiers and the coding guidelines for modifiers are included in appendix A of CPT 2006. CPT Category II Codes Category II provides supplementary tracking codes that are designed for use in performance assessment and quality improvement activities. CPT Category II codes are composed of five characters: four numbers and an alphabetic fifth character, capital letter F. Codes 1000F and 1001F, for example, describe a specific aspect of patient history, specifically, assessments of patient tobacco use. The assignment of Category II CPT codes is optional. Category II supplementary codes are updated twice each year, on January 1 and July 1. CPT Category III Codes CPT Category III includes temporary codes that represent emerging medical technologies, services, and procedures that have not yet been approved for general by the FDA and so are not otherwise covered by CPT codes. Level III codes give physicians and other healthcare 2

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Introduction to Clinical Coding

providers and researchers a system for documenting the use of unconventional methods so that their efficacy and outcomes can be tracked. Like CPT Category II codes, Category III codes are composed of five characters: four numbers and an alphabetic fifth character, capital letter T. Example:

Code 0017T represents a procedure for destroying macular drusen by the application of photocoagulation.

Updated Category III codes are released semiannually via the AMA’s CPT Web site. The complete list of temporary codes is published annually in the CPT codebooks. CPT Modifiers A third set of supplementary codes known as modifiers can be reported along with many of the Category I CPT codes. The two-character modifier codes are appended to Category I five-digit CPT codes to report additional information about any unusual circumstances under which a procedure was performed. The reporting of modifiers is meant to support the medical necessity of procedures that might not otherwise qualify for reimbursement. Example:

Suppose that a surgeon successfully performed a percutaneous transluminal balloon angioplasty to remove a blockage from a patient’s renal artery, but later that day it became evident that the artery had become occluded again. If the surgeon who performed the original procedure were not available, another surgeon on call would repeat the procedure to remove the blockage. Code 35471 would be reported by the first surgeon to identify the original angioplasty, and the second surgeon would report 35471–77 to identify the repeat angioplasty.

Most of the two-character modifiers for Category I codes are numerical. (Chapter 3 of this workbook includes a list of the CPT modifiers in CPT 2006.) However, there also are some alphanumeric modifiers to indicate the physical status of patients undergoing anesthesia. These modifiers begin with a capital letter P, as follows: P1 P2 P3 P4 P5 P6

A normal healthy patient A patient with mild systemic disease A patient with severe systemic disease A patient with severe systemic disease that is a constant threat to life A moribund patient who is not expected to survive without the operation A declared brain-dead patient whose organs are being removed for donor purposes

(Chapter 2 of this workbook provides additional guidelines for applying CPT codes, and chapter 3 discusses modifiers in more detail.)

Healthcare Common Procedure Coding System The Health Care Financing Administration (HCFA) developed the original version of the HCFA Common Procedure Coding System (HCPCS) in 1983. HCPCS was designed to represent the physician and nonphysician services provided to Social Security beneficiaries under the federal Medicare program. HCFA’s name was changed to the Centers for Medicare and Medicaid Services (CMS) in 2001. The official name of the coding system was also changed, and the system is now called the Healthcare Common Procedure Coding System. CMS is the 3

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Chapter 1

division of the U.S. Department of Health and Human Services that administers the Medicare program and the federal portion of the Medicaid program. The purpose of HCPCS as implemented in 1985 was to fulfill the operational needs of the Medicare reimbursement system. Originally, HCPCS codes applied only to the services provided by physicians to Medicare patients. Since 1986, however, the federal government has required that physicians use HCPCS codes to report services provided to Medicaid patients as well. Moreover, with the passage of the Omnibus Reconciliation Act of 1986, hospitals are also required to report HCPCS codes on reimbursement claims for ambulatory surgery services as well as radiology and other diagnostic services provided to Medicare and Medicaid patients. HCPCS codes enable providers and suppliers to accurately communicate information about the services they provide. Analysis of HCPCS data also helps Medicare carriers to establish financial controls that prevent expense escalation. Finally, the information from coded claims facilitates uniform application of Medicare and Medicaid coverage and reimbursement policies. HCPCS includes two separate levels of codes. Level I is based on the current edition of CPT. Level II is made up of the National Codes that represent the medical supplies and services not included in CPT.

HCPCS Level I Copyrighted and published by the AMA, Level I of HCPCS consists of five-digit Category I CPT codes. Level I HCPCS codes are used by physicians to report services such as hospital visits, surgical procedures, radiological procedures, supervisory services, and other medical services. Hospitals also use Level I codes to report hospital-based outpatient services, such as laboratory and radiological procedures and ambulatory surgeries, to Medicare and other thirdparty payers. Level I codes represent approximately 80 percent of the HCPCS codes submitted for reimbursement each year.

HCPCS Level II Known as the National Codes, HCPCS Level II codes were developed by CMS for use in reporting medical services not covered in CPT. Level II codes are provided for injectable drugs, ambulance services, prosthetic devices, and selected provider services. Level II codes are made up of five characters: The first character is a capital Arabic letter, and the following four characters are numbers. Examples of HCPCS Level II codes include the following: A4550 E1625 J0475 L3260

Surgical trays Water softening system, for hemodialysis Injection, baclofen, 10 mg Ambulatory surgical boot, each

Like Level I (CPT) codes, HCPCS Level II codes are updated annually on January 1. A list of current Level II codes can be requested from the U.S. Government Printing Office or any local Medicare carrier. Several commercial publishing companies distribute the National Codes in book form, which is more user-friendly than the government-issued lists owing to the addition of enhancements such as indexes and cross-references. In addition, an electronic file containing the most current version of the HCPCS Level II codes can be downloaded from the CMS Web site at Utilities/Miscellaneous, www.cms.gov/providers/pufdownload/. (HCPCS Level II codes are discussed in more detail in chapter 10 of this workbook.) 4

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Introduction to Clinical Coding

International Classification of Diseases, Ninth Revision, Clinical Modification The International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9CM), is based on an international classification system originally developed and maintained by the World Health Organization. The purpose of the international version of the ICD is the classification and reporting of morbidity data (illnesses and injuries) and mortality data (fatalities) from around the world. ICD-9 was modified for use in the United States and was first released as ICD-9-CM in 1979. The World Health Organization generally publishes revised editions of the ICD about every ten years, and the tenth revision of the international system is currently in use worldwide. However, the United States continues to use ICD-9-CM for diagnostic reporting, although U.S. providers currently use ICD-10 to code the content of death certificates for public health reporting. A draft version of a clinical modification of ICD-10 has been developed, but no dates for implementing ICD-10-CM in the United States have been established. When federal legislation called for modifications in the Medicare reimbursement system in 1983, ICD-9-CM was adopted as part of the reporting requirements for the new Medicare prospective payment systems (PPSs). These systems have been gradually implemented in various healthcare settings over the past twenty years. Inpatient services were the first to be affected, but Medicare prospective payment systems have now been implemented in almost every setting. A PPS for inpatient psychiatric care was implemented in 2004. The difference between PPSs and older, cost-based reimbursement systems is that PPS reimbursement is based primarily on the patient’s diagnosis rather than on the actual cost of providing specific services. For that reason, the accuracy of diagnostic coding has become extremely important for healthcare providers and third-party payers alike. (Note that the PPS for inpatient psychiatric services is somewhat different from the PPSs implemented for other types of care and treatment settings. The psychiatric PPS bases reimbursement on per diem rates, set rates paid for each day of hospital inpatient care.) Today, CMS and private third-party payers require physicians and other medical providers to report ICD-9-CM diagnostic codes on virtually every reimbursement claim. The diagnostic information is used to assign cases to Medicare payment groups (for example, diagnosis-related groups for inpatient services) and to document the medical necessity and quality of the services provided to all patients. The official version of ICD-9-CM is published in three volumes. Volume 1 contains the main list of diagnostic codes in tabular format. The codes are organized into chapters according to body system. For example, chapter 1 covers the codes for infectious and parasitic diseases. Volume 2 provides an alphabetic index of diseases and injuries that helps coders locate the appropriate code listings in the tabular list. Volume 3 includes procedural codes and an alphabetic index for procedures. Only inpatient acute care hospitals use ICD-9-CM volume 3 to report procedures for reimbursement. Therefore, hospital-based outpatient departments, physicians’ offices, and other ambulatory facilities never use volume 3. Like CPT and HCPCS, ICD-9-CM codes are reevaluated and appropriate revisions are implemented on a regular basis. ICD-9-CM code updates are now released by the federal government twice each year, on April 1 and October 1. The official version of ICD-9-CM is issued only in CD-ROM format by the Government Printing Office. Updated ICD-9-CM codes are also available electronically from the National Center for Health Statistics Web site. Several commercial publishers, however, offer enhanced print versions of the classification. The yearly editions of these codebooks are usually released during the summer and incorporate the official ICD-9-CM changes that will become effective on October 1 of the same year. 5

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Chapter 1

To ensure complete and accurate coding, healthcare providers must update or replace their ICD-9-CM codebooks as new codes are implemented and existing codes are amended or deleted. In addition, encoders and other coding software must also be updated at least yearly.

ICD-9-CM Diagnostic Codes ICD-9-CM diagnostic codes represent the reasons why patients require and/or seek medical care. Each numerical code represents a specific symptom, condition, injury, or disease. ICD-9-CM diagnostic codes in the main classification (codes 001 through 999) consist of three, four, or five digits. The first three numbers represent a specific diagnosis, and one or two additional numbers may follow a decimal point after the three-number code to provide information that is more specific. Example:

Code 562.13 represents a diagnosis of diverticulitis of the colon with intestinal hemorrhaging. The first three numbers (562) indicate a diagnosis of diverticula of the intestine; the number 1 after the decimal point represents the location of the diverticula, the colon; and the fifth digit represents the most specific diagnosis: diverticulitis of colon with hemorrhage.

Supplementary ICD-9-CM Codes ICD-9-CM includes two supplementary classifications. Alphanumeric codes from the supplementary classifications provide additional information about the patient and/or the circumstances surrounding the patient’s illness or injury. V codes (V01 through V85) represent the various factors that may influence the patient’s health status and contact with health services. E codes (E800 through E999) represent the external factors that cause injuries and poisonings.

Diagnostic Coding The Central Office on ICD-9-CM maintains the official coding guidelines for diagnostic coding. The guidelines require ICD-9-CM code assignments to be as specific as possible and to be supported by health record documentation. The guidelines also require the reporting of as many codes as necessary to completely describe the patient’s condition. Guidelines also establish the order in which multiple codes are to be reported. The ICD-9-CM codebook also provides detailed advice on assigning codes correctly. Every claim for outpatient services must contain at least one ICD-9-CM code, but care must be taken to report every applicable code in the sequence specified in the official coding guidelines. Medicare and most other third-party payers reject claims that report incomplete ICD-9-CM codes. A set of Official ICD-9-CM Coding Guidelines for Outpatient Services was developed in 1990 and revised subsequently in 1995 and 2002. Coders must thoroughly understand and carefully follow these guidelines. Official ICD-9-CM coding advice is also published by the American Hospital Association (AHA) in its quarterly publication, Coding Clinic. The official coding guidelines for ICD-9-CM are available from the Central Office on ICD-9-CM of the American Hospital Association as well as from the CMS Web site. The following examples illustrate correct and incorrect code assignments for a patient with a diagnosis of type II diabetes. 6

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Introduction to Clinical Coding

Example: 250.00

Diabetes mellitus without mention of complication, Type II or unspecified type, not stated as uncontrolled

Correct

250.0

Diabetes mellitus without mention of complication, Type II or unspecified type, not stated as uncontrolled

Incorrect

250

Diabetes mellitus without mention of complication, Type II or unspecified type, not stated as uncontrolled

Incorrect

(Basic ICD-9-CM Coding, by Lou Ann Schraffenberger, MBA, RHIA, CCS, CCS-P, provides a more detailed discussion of the basics of ICD-9-CM coding. The workbook also provides numerous practice exercises. A new edition of the workbook with updated codes is released by the American Health Information Management Association every summer.)

Documentation for Reimbursement Health record documentation continues to play a pivotal role in the accurate and complete collection of health services data. The documentation records pertinent facts, findings, and observations about an individual’s health history, including past and current illnesses, examinations, tests, treatments, and outcomes. By chronologically documenting the patient’s care, the health record becomes an important element in the provision of high-quality healthcare and serves as the source document for code assignment. The following general principles of health record documentation, developed jointly by the AMA and CMS, apply to the records maintained for all types of medical and surgical services: •

The health record should be complete and legible.

•

The documentation of each patient encounter should include: —The reason for the encounter and the patient’s relevant history, physical examination findings, and prior diagnostic test results —A patient assessment, clinical impression, or diagnosis —A plan for care —The date of the encounter and the identity of observer

•

The rationale for ordering diagnostic and other ancillary services should be documented or easily inferred.

•

Past and present diagnoses should be accessible to the treating and/or consulting physician.

•

Appropriate health risk factors should be identified.

•

The patient’s progress and response to treatment and any revision in the treatment plan and diagnoses should be documented.

•

The CPT and ICD-9-CM codes reported on health insurance claim forms or billing statements should be supported by documentation in the health record. 7

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Chapter 1

Additional documentation guidelines pertinent to evaluation and management (E/M) services are discussed in chapter 7 of this book. (Various links pertinent to the information discussed in this chapter are listed in the Web resources in appendix A of this workbook.)

Medicare Regulations The Social Security Act of 1965 and its subsequent amendments establish the federal regulations that govern Medicare. Medicare regulations require the collection of several types of coded information on reimbursement claims for services provided to Medicare beneficiaries: •

ICD-9-CM diagnostic and procedural codes for inpatient hospital services

•

ICD-9-CM diagnostic codes and HCPCS procedural codes for hospital outpatient services including laboratory and radiology procedures

•

ICD-9-CM diagnostic codes and HCPCS procedural codes (regardless of the service location) for medical services provided by physicians and allied health professionals (psychologists, nurse practitioners, social workers, licensed therapists, and dietitians)

Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification The intent of the federal government’s simplification mandate is to streamline and standardize the electronic filing and processing of health insurance claims; to save money; and to provide better service to providers, insurers, and patients.

HIPAA Transaction and Code Set Standards Before the implementation of HIPAA transaction and code set standards, healthcare providers and health plans used various formats when performing daily electronic transactions, which led to confusion. HIPAA requirements specify that all electronic data interchange formats be standardized. These standards apply to any health plan, clearinghouse, and any healthcare providers that transmit health information in electronic form in connection with defined transactions. HIPAA also required the standardization of the reporting of medical procedures with industry-established and -maintained codes. These are codes used by healthcare providers to identify what procedures, services, and diagnoses pertain to that encounter. The following code sets have been approved for use by HIPAA: •

International Classification of Diseases, 9th Edition, Clinical Modification (ICD-9-CM)

•

Current Procedure Terminology (CPT)

•

Healthcare Common Procedure Coding System (HCPCS)

•

Current Dental Terminology (CDT)

•

National Drug Codes (NDC)

Claims Submission Reimbursement claims for medical services provided to beneficiaries of commercial and government-sponsored health insurance programs may be submitted in electronic or paper 8

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Introduction to Clinical Coding

form. Electronic claims, however, must follow the standards developed by the Accredited Standards Committee (ASC) and mandated by the Health Insurance Portability and Accountability Act (HIPAA). ASC Standard X12 applies exclusively to electronic claims. The CMS-1500 form shown in figure 1.1 is the standard billing document used for physician claims submitted on paper for Medicare Part B reimbursement. Providers also use this form for paper claims submitted to many private health insurance companies and Medicaid agencies. (CMS forms may be accessed on the Web by following the links and instructions at cms.hhs.gov/providers/edi/edi5.asp.) Up to four diagnostic codes may be reported in field location 21 of this form; information on the service or procedure provided is reported in field location 24. Up to six HCPCS codes may be reported in column D of field location 24; in column E, the diagnostic codes are linked with the related HCPCS codes by placing a number (1, 2, 3, or 4) to show which diagnostic code is related to the procedure. Coders must be sure that any association of ICD-9-CM diagnostic codes with HCPCS procedure codes is logical and appropriate. Example:

Patient’s chief complaint is lower leg pain. The physician orders a lower leg x-ray and an EKG. The lower leg pain is linked with the x-ray, but there is no logical symptom or diagnosis to link with the EKG. Review of the health record may reveal an existing condition, such as premature ventricular contractions, or a symptom, such as tachycardia. Documentation must support the procedure or service provided; otherwise, the claim will be denied.

Medicare and many commercial third-party payers often establish coverage limits for certain services. Reimbursement claims for services with coverage limits (for example, inpatient psychiatric care) must include sufficient diagnostic information to support the medical necessity of the services provided. This diagnostic information is communicated in the form of ICD-9-CM codes. Medicare policies include two types of coverage limits: national coverage decisions and local coverage determinations (LCD). CMS establishes contractual arrangements with the private insurance companies (referred to as carriers), intermediaries, and Program Safeguard Contractors who process Medicare claims in local geographic regions. These contractors are responsible for making coverage decisions for Medicare beneficiaries, and the contractors base their decisions on established national coverage requirements for specific medical supplies and services. For cases that are not covered by existing national policies, contractors may make local coverage determinations at their own discretion. A list of the Medicare coverage policies can be found on the CMS Web site. The following policy is an example of a LCD. (It was accessed on the Web site for the Ohio fiscal intermediary AdminaStar Federal.) Example:

CPT codes 20974 and 20975 for electrical stimulation to aid bone healing are covered by Medicare only when one of the following ICD-9-CM diagnosis codes appears on the claim form: 733.82 909.3 V45.4

Nonunion of Fracture Late Effect of Complications of Surgical & Medical Care Postsurgical Arthrodesis Status

The CMS-1450 form, better known as UB-92 (figure 1.2), is used primarily by hospitals for both outpatient and inpatient services. This form is used to submit claims for Medicare Part A services. It is also used by other third-party payers to report claims for outpatient and inpatient services provided by hospitals and ambulatory surgery centers (ASCs). 9

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Chapter 1

Sample CMS-1500 form CARRIER

PLEASE DO NOT STAPLE IN THIS AREA

HEALTH INSURANCE CLAIM FORM

(Medicare #)

MEDICAID

CHAMPUS

(Medicaid #)

GROUP HEALTH PLAN (SSN or ID)

CHAMPVA

(Sponsor’s SSN)

(VA File #)

2. PATIENT’S NAME (Last Name, First Name, Middle Initial)

FECA BLK LUNG (SSN)

3. PATIENT’S BIRTH DATE MM DD YY

CITY

Spouse

Child

Single

CITY

Married

ZIP CODE

9. OTHER INSURED’S NAME (Last Name, First Name, Middle Initial)

Full-Time Part-Time Student Student 10. IS PATIENT’S CONDITION RELATED TO:

a. OTHER INSURED’S POLICY OR GROUP NUMBER

a. EMPLOYMENT? (CURRENT OR PREVIOUS) YES

(

M

F

YES

PLACE (State)

c. INSURANCE PLAN NAME OR PROGRAM NAME

d. IS THERE ANOTHER HEALTH BENEFIT PLAN? YES

17. NAME OF REFERRING PHYSICIAN OR OTHER SOURCE

SIGNED

17a. I.D. NUMBER OF REFERRING PHYSICIAN

18. HOSPITALIZATION DATES RELATED TO CURRENT SERVICES MM DD YY MM DD YY FROM TO 20. OUTSIDE LAB? YES

21. DIAGNOSIS OR NATURE OF ILLNESS OR INJURY. (RELATE ITEMS 1,2,3 OR 4 TO ITEM 24E BY LINE) 1.

3.

2. 24.

4.

MM

DATE(S) OF SERVICE To From MM DD DD YY

If yes, return to and complete item 9 a-d.

15. IF PATIENT HAS HAD SAME OR SIMILAR ILLNESS. 16. DATES PATIENT UNABLE TO WORK IN CURRENT OCCUPATION DD YY MM DD YY MM DD YY GIVE FIRST DATE MM FROM TO

19. RESERVED FOR LOCAL USE

A

NO

13. INSURED’S OR AUTHORIZED PERSON’S SIGNATURE I authorize payment of medical benefits to the undersigned physician or supplier for services described below.

DATE ILLNESS (First symptom) OR INJURY (Accident) OR PREGNANCY(LMP)

F

b. EMPLOYER’S NAME OR SCHOOL NAME

NO

READ BACK OF FORM BEFORE COMPLETING & SIGNING THIS FORM. 12. PATIENT’S OR AUTHORIZED PERSON’S SIGNATURE I authorize the release of any medical or other information necessary to process this claim. I also request payment of government benefits either to myself or to the party who accepts assignment below. SIGNED

SEX

NO

10d. RESERVED FOR LOCAL USE

d. INSURANCE PLAN NAME OR PROGRAM NAME

a. INSURED’S DATE OF BIRTH MM DD YY M

c. OTHER ACCIDENT? YES

)

11. INSURED’S POLICY GROUP OR FECA NUMBER

NO

b. AUTO ACCIDENT?

SEX

c. EMPLOYER’S NAME OR SCHOOL NAME

14. DATE OF CURRENT: MM DD YY

TELEPHONE (INCLUDE AREA CODE)

Employed

)

b. OTHER INSURED’S DATE OF BIRTH MM DD YY

STATE

Other

TELEPHONE (Include Area Code)

(

7. INSURED’S ADDRESS (No., Street)

Other

8. PATIENT STATUS

STATE

ZIP CODE

4. INSURED’S NAME (Last Name, First Name, Middle Initial) F

6. PATIENT RELATIONSHIP TO INSURED Self

(FOR PROGRAM IN ITEM 1)

(ID)

SEX M

5. PATIENT’S ADDRESS (No., Street)

PICA

OTHER 1a. INSURED’S I.D. NUMBER

PATIENT AND INSURED INFORMATION

PICA 1. MEDICARE

$ CHARGES NO

22. MEDICAID RESUBMISSION CODE ORIGINAL REF. NO. 23. PRIOR AUTHORIZATION NUMBER

B C D Place Type PROCEDURES, SERVICES, OR SUPPLIES of of (Explain Unusual Circumstances) YY Service Service CPT/HCPCS MODIFIER

E

F

DIAGNOSIS CODE

$ CHARGES

G H I DAYS EPSDT OR Family EMG UNITS Plan

J

K

COB

RESERVED FOR LOCAL USE

1

2

3

4

5

PHYSICIAN OR SUPPLIER INFORMATION

Figure 1.1.

6 25. FEDERAL TAX I.D. NUMBER

SSN EIN

31. SIGNATURE OF PHYSICIAN OR SUPPLIER INCLUDING DEGREES OR CREDENTIALS (I certify that the statements on the reverse apply to this bill and are made a part thereof.)

SIGNED

26. PATIENT’S ACCOUNT NO.

27. ACCEPT ASSIGNMENT? (For govt. claims, see back) YES NO

32. NAME AND ADDRESS OF FACILITY WHERE SERVICES WERE RENDERED (If other than home or office)

$

PLEASE PRINT OR TYPE

29. AMOUNT PAID $

30. BALANCE DUE $

33. PHYSICIAN’S, SUPPLIER’S BILLING NAME, ADDRESS, ZIP CODE & PHONE #

PIN#

DATE

(APPROVED BY AMA COUNCIL ON MEDICAL SERVICE 8/88)

28. TOTAL CHARGE

GRP#

APPROVED OMB-0938-0008 FORM CMS-1500 (12-90), FORM RRB-1500, APPROVED OMB-1215-0055 FORM OWCP-1500, APPROVED OMB-0720-0001 (CHAMPUS)

10

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Introduction to Clinical Coding

Figure 1.2.

Sample UB-92 (CMS-1450) form

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Chapter 1

Up to nine diagnostic codes can be reported in field locations 67 through 75 and six ICD9-CM procedure codes in field locations 80 and 81. HCPCS codes (for outpatient services including surgery) are reported in field location 44. Required modifiers are appended to the HCPCS code in this field location. Up to two modifiers may be used to provide additional information about the HCPCS codes on the claim form for Medicare patients. Field locator 76 is for admitting diagnosis and 77 is for E-code reporting.

Exercise 1.1

Introduction

Review each of the following questions, and write the appropriate answers in the spaces provided. 1.

What organizations are responsible for updating CPT codes and HCPCS Level II codes?

2.

How many diagnostic codes may be submitted on the CMS-1500 form?

3.

Which coding system(s) is (are) used for claims submitted by physicians?

4.

Dr. Smith saw a Medicare patient with a diagnosis of rectal abscess in Central Hospital. She per formed an incision and drainage in the outpatient surgery department. a.

Which coding system(s) would Dr. Smith use to bill for her services? Diagnosis: ____________________________________________________________________ Procedure: ____________________________________________________________________

b.

Which coding system(s) would Central Hospital use to bill for its services? Diagnosis: ____________________________________________________________________ Procedure: ____________________________________________________________________

c.

Which form would Central Hospital use to submit a paper-based claim to Medicare for payment?

5.

Which coding system describes the reason for the patient visit or encounter?

6.

A patient was seen in a physician’s office for excision of a 0.5-cm facial nevus (HCPCS Level I code 11440). The ICD-9-CM diagnostic code for the benign lesion is 216.3. During this encounter, the physician also evaluated the patient’s hyperglycemia (ICD-9-CM code 790.6) and chronic simple anemia (ICD-9-CM code 281.9). A three-specimen glucose tolerance test (HCPCS Level I code 82951) was performed. Using the CMS-1500 form provided in figure 1.3, link the appropriate ICD-9-CM codes found in block 21 with HCPCS Level I codes found in block 24D. In column 24E, select the appropriate number (1, 2, or 3) to indicate which diagnostic code is related to the procedure.

12

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Introduction to Clinical Coding

Figure 1.3.

Information for question 6 of exercise 1.1

21. DIAGNOSIS OR NATURE OF ILLNESS OR INJURY, (RELATE ITEMS 1,2,3 OR 4 TO ITEM 24E BY LINE)

790.6

216.3 281.9

01-19

11440

01-19

82951

Chapter 1

Test

Choose or write the appropriate answers. 1.

Which of the following statements is (are) true of CPT codes? a. They are numeric. b. They describe nonphysician services. c. They are updated annually by CMS. d. All of the above

2.

CPT a. b. c. d.

was developed and is maintained by: CMS AMA The Cooperating Parties WHO

3.

CPT a. b. c. d.

is updated: Annually for the main body of codes and every 6 months for category III codes Annually Every 6 months As often as required by new technology

4.

There are six sections to CPT: evaluation and management, anesthesia, surgery, radiology, laboratory/pathology, and ________________________________________________________.

13

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