Coding Presentation

HCR 263: Introduction to Medical Billing & Compliance

Arizona State University
By: Lisa-Ann M. Datu and Katherine O’Connor
 ICD-10 Evaluation and
1 Diagnosis Codes 2 CPT Procedure
Codes 3 Management Codes 4 HCPCS Level II
Procedure Codes

5 Modifiers 6 References

Table of Contents
 ICD-10 Diagnosis Codes:
History and Pertinent Definitions
• Went into effect in the United States in 2015 (CMS, 2021).
• Prior to ICD-10, ICD-9 was being used since 1979 (Smiley, 2020, p. 15a).
• ICD-11 is the next revision to be released with an additional 40,000 codes for diseases, injuries, and cause
of death (Smiley, 2020, p. 21).
• Stands for: International Classification of Diseases, Tenth Revision (Smiley, 2020, p. 15b)
• Classifies diseases and injuries from patient’s encounter with their physician (Smiley, 2020, p. 15c)
• Two categories of ICD codes (Smiley, 2020, p. 243).
o ICD-CM: Clinical Modifications. These codes are used by healthcare providers, and currently has over
68,000 codes.
o ICD-PCS: Procedure Coding System. The codes are used by hospital billing and coding for inpatient
reporting, and currently has over 72,000 codes.
 ICD-10 Diagnosis Codes:
Document Requirements
• ICD-10 Codes rely on documentation from the physician (Smiley, 2020, p. 18a)
• Documentation needs to show medical necessity (Smiley, 2020, p. 18b)
• Types of Documentation
o Operative reports (Smiley, 2020, p. 19a)
• Describes what was done during surgery
• Includes information like patient data (name/date of birth), date of service, operating physician
and assistant(s), preoperative diagnosis and postoperative diagnosis
o Physician’s office notes (Smiley, 2020, p. 20a)
• Describes patients symptoms
• Physician’s findings
• Treatment plan
• Follow-up plan
• Unclear documentation/Missing information (Smiley, 2020, p. 21a)
• “If the doctor didn’t say it, it wasn’t done (Smiley, 2020, p, 21b).”
• Follow up action is required to be able to assign ICD-10 codes
 ICD-10 Diagnosis Codes
Regulatory Considerations Importance to Coding, Billing and
• “Healthcare is a regulated industry” with Reimbursement
certain guidelines to follow (Smiley, 2020, p.
• It is important to accurately code data for
10). When choosing ICD-10 codes, billers and
reimbursements (TriCounty, 2014a)
coders need to be familiar with policies and
procedures of (Smiley, 2020, p. 47a): o To ensure payments of claims.
o Government entities like CMS & OIG o Inaccurate coding can cause claims to be denied
o Individual payers like insurance • ICD-10 codes are used by
companies o Medical coders: Inputs ICD-10 codes to claims &
• Regular training and continuing education sends to biller
helps keep billers and coders up to date on o Medical biller: Submits claims complete with codes
changes, and remain compliant with coding & follows up on payment
requirements (TDC, 2014a). o World Health Organization (WHO): To study the
o Avoids fraud. health of large population group (Smiley, 2020, p.
o Prepares for regulatory audits. 15)
o Payors: Government entities and insurance
o Avoids fines/penalties.
companies review the codes to make sure it is
medically necessary
 CPT Procedure Codes
History and Pertinent Definitions
• Stands for: Current Procedural Terminology (AMA, 2022)
• The copyright for CPT codes are owned by the American Medical Association, or AMA. AMA develops and
maintains the CPT codes, making edits when it is required (Smiley, 2020, p. 46a).
• CPT codes are used for medical billing and coding, as well as creating guidelines for health care studies (AMA,
2022).
• Five-digit alphanumeric codes based on categories (AMA, 2022).
o Category I: Codes range from 00100-99499. They are ordered into subcategory based on anatomy and
the procedure.
o Category II: Supplemental alphanumeric tracking codes. These codes are optional and could be used to
measure performance.
o Category III: Temporary codes for new services or procedures that don’t fall in Category I.
o Proprietary Laboratory Analyses (PLA) codes: Codes used for clinical lab analyses from labs that are FDA
approved, e.g. Advanced Diagnostic Laboratory Tests (ADLTs) and Clinical Diagnostic Laboratory Tests
(CDLTs).
 CPT Procedure Codes
Document Requirements
• Much like ICD-10 diagnosis code, CPT codes rely on documentation from patient encounter. “The diagnosis must fit
the procedure (Smiley, 2020, p. 69).”
• For example, if documentation & ICD-10 lists a broken foot, the payer will only pay for the broken foot, not for a
broken wrist even though both injuries are from the same accident
• Types of Documentation
o Operative reports (Smiley, 2020, p. 19b)
• Describes procedures done during surgery
• Includes information like patient data (name/date of birth), date of service, operating physician and
assistant(s).
o Physician’s office notes (Smiley, 2020, p. 20b)
• Describes patients symptoms
• Physician’s findings
• Treatment plan
• Follow-up plan
• Unclear documentation/Missing information (Smiley, 2020, p. 21c)
• “If the doctor didn’t say it, it wasn’t done (Smiley, 2020, p, 21d).”
• Follow up action is required to be able to assign correct CPT codes
 CPT Procedure Codes
Regulatory Considerations
• CPT Codes are recognized by government payers like Medicare & Medicaid as well as individual payers like
insurance companies.
• CMS works with AMA to edit CPT codes when necessary (Smiley, 2020, p. 46b)
• The AMA Board of Trustees appoint a CPT Editorial Panel which is an independent group of volunteer experts
from the health care industry to meet three times per year and conduct evidence-based reviews to determine any
code changes (AMA, 2022). These panel meetings are open to anyone who wishes to participate by submitting
an application to attend.
• Companies, billers, and coders should seek continued training and education to prepare for audits and avoid
fraud claims, legal fees, fines, and penalties (TDC, 2014b).

Importance to Coding, Billing and Reimbursement

• CPT Procedure codes are important for coding, billing, and reimbursement because inaccurate coding can lead to
claims being rejected or payments being delayed (Tricounty, 2014b).
 Evaluation and Management Codes
History and Pertinent Definitions
• In 1995, CMS and AMA implemented guidelines to clarify E/M
code assignments for both providers and claim reviewers
(Harrington, 2019).

• In 1997, CMS and AMA revised the guidelines to be able to

include different details (Harrington, 2019).

• History also pertains to the patient's history and the history of

the family.
o The history of the patient includes what they have been
diagnosed with, any chronic illness they may have, or
anything a provider should know about the patient to
make informed decisions (Aapc, 2021).
o The history of the family is the same as the history of the
patient, but it pertains to what providers know about the
family’s history of health issues, e.g. cancer (Aapc, 2021)
 Evaluation and Management Codes
Document Requirements
• Details of the visit are necessary for completion. Things such as what, where, when, why, and who are important for the
full documentation (Aapc, 2021). This goes for HPI (History of Present Illness) and PFSH (Past, Family, and/or Social
History) (Aapc, 2021).
o HPI’s can be brief or extended where brief includes a sentence or two, but extended should include 4 or more
elements of the illness (Aapc, 2021).
o PFSH is a review of the HPI that includes at least one of three:
• Illness, operations, injuries, and treatments (Aapc, 2021).
• Medical events, diseases, and hereditary conditions (Aapc, 2021).
• Age-appropriate review of past and current activities (Aapc, 2021).
• Current procedural terminology, or CPT, is the selection of codes that best describe the patient type, setting of service,
and level of E/M service performed (Harrington, 2019).
• There are seven components for levels of E/M services (Aapc, 2021).
o One, two, and three are for history, examination, and medical decision-making (Aapc, 2021).
o Four, five, and six are for counseling, coordination of care, and the nature of presenting problems (what
contributes to the encounters) (Aapc, 2021).
o Seven is time, specifically how much time an encounter takes. The CPT book is the guideline for whether to use an
average or range of time (Aapc, 2021).
 Evaluation and Management Codes
Regulatory Considerations
• After 2010, certain codes are not going to be recognized by
Medicare (Aapc, 2021).

Importance to Coding, Billing and

Reimbursement
• The documentation of the visit must be complete and include
all that happened so that the CPT codes and E/M services can
be coded and billed correctly (Harrington, 2019).
 HCPCS Level II Procedure Codes
History and Pertinent Definitions
• A standardized coding system was established in 1978 and has been in use since 1983 to help describe specific items
and services provided that level l did not (Harrington, 2019).
o Was voluntary in the beginning, but is now mandatory because of HIPAA (Aapc, 2019).
o Intended for Medicare claims at first (Aapc, 2019)

Document Requirements
• Level ll involves a provider documenting the necessary use of drugs, supplies, equipment, non-physician services, and
services on a patient (Aapc, 2019).
o To show this, a coder uses CPT, ICD-10, alongside HCPCS codes to formulate a claim (Aapc, 2019).
• The code structure consists of five characters, and it begins with a letter which is followed by four numbers (Aapc,
2019).
o For example, the code for a generator, neurostimulator (implantable), non-rechargeable, with transvenous sensing
and stimulation leads is C1823 (Aapc, 2019).
 HCPCS Level II Procedure Codes
Regulatory Considerations
• CMS is the organization that maintains HCPCS codes (Harrington, 2021).
• There are yearly updates to the permanent code set, and quarterly updates for temporary codes (Aapc, 2019).
• AHA Coding Clinic for HCPCS is the coding guideline for the level ll codes (Aapc, 2019).
o Comes in the form of a newsletter every quarter (Aapc, 2019).
o Introduced in March 2001, the Central Office of ICD-9-CM publishes the newsletters (Aapc, 2019).
• Includes a section with examples, correct code assignments for new technologies, articles, and a bulletin
of coding changes and/or corrections (Aapc, 2019).
• A coder must verify that the payer covers level ll codes since not all payers do (Aapc, 2019).

Importance to Coding, Billing and Reimbursement

• CPT and ICD-10 codes can be used in conjunction with HCPCS level ll codes, or they could be used instead of them.
• HCPCS level ll codes are important to describe what the provider used, but since not every payer accepts these
codes it is up to the coder to submit a claim using the correct codes that are acceptable.
 Modifiers
History and Pertinent Definitions

• Modifiers provide additional information about

the medical services, procedures, or supplies
used without changing code meaning (MLN,
2021).
• Coders may use modifiers to indicate that a
service did not occur exactly as described by a
CPT® or HCPCS Level II code descriptor, but the
circumstance did not change the code that
applies (MLN, 2021).
 Modifiers
Document Requirements
• Modifiers are usually two digits, two letters, or alphanumerical (MLN, 2021).
• Modifiers work in conjunction with a variety of codes.
o CPT modifiers come in the form of two digits or alphanumeric (only for CPT ® Category II codes)
(MLN, 2021).
o HCPCS Level ll modifiers are alphanumeric or two letters (MLN, 2021).
o Pricing modifiers cause a pricing change for the code reported (MLN, 2021). Since it changes the price,
MCS (or Multi-Carrier System) used by Medicare, requires this modifier to be in the first modifier
position before any information modifiers (MLN, 2021).
o Informational modifiers are not classified as payment modifiers, although they can affect whether a
claim is reimbursed (MLN, 2021).
o NCCI modifiers are acceptable by Medicare and Medicaid to bypass, or unbundle, an NCCI PTP edit if
it is under appropriate clinical circumstances (MLN, 2021).
o MPFS (Medicare Physician Fee Schedule) modifiers are used by Medicare to know how much to pay
providers on a fee-for-service basis (MLN, 2021). These modifiers come in professional (physician’s
professional service fee) or technical components (fee for the use of equipment, supplies, staff), where
the coder can use both or only one (MLN, 2021).
 Modifiers
Document Requirements (continued)

• There are a multitude of modifiers, and all have

different meanings. When using them, a coder must
be careful because there are a few codes that are
similar or they are tricky to use (MLN, 2021).
o Modifier 25, an E/M service code, is a tricky one for
coders because it lets multiple services be provided
on the same day by the same or a different
provider (MLN, 2021). The extra work that is being
added on by modifier 25 has to be enough to
support an E/M service code by itself, therefore
coders find it difficult to prove that there was
enough extra work done by a provider (MLN,
2021).
 Modifiers
Regulatory Importance to Coding,
Considerations Billing and Reimbursement
• Some payer programs may have • Modifiers affect coding, billing, and
modifiers that only apply when you’re reimbursement by how they are used.
reporting codes that are connected Coders translate the documentation they
with those programs (MLN, 2021). are given from writing to codes, therefore
the use of modifiers can change the
• Medicare Claims that do not have a
meaning of the code. The wrong
price modifier will most likely receive
modifiers could affect the reimbursement
delays (MLN, 2021).
for the provider, and whether or not the
o WPS Government Health claim is denied for the biller. In that, it is
Administrators has fact sheets that important for the coder to be up to date
help with the placement of pricing on codes and the variety of modifiers that
modifiers and any secondary go with them.
modifiers (MLN, 2021).
 References
Aapc. (2021, January 25). All about medical coding modifiers. AAPC. Retrieved March 25, 2022, from
https://www.aapc.com/modifiers/
Aapc. (2019, October 24). All about HCPCS codes. AAPC. Retrieved March 25, 2022, from
https://www.aapc.com/resources/medical-coding/hcpcs.aspx
AMA. (2022). CPT overview and code approval. American Medical Association. Retrieved March 25, 2022, from
https://www.ama-assn.org/practice-management/cpt/cpt-overview-and-code-approval
CMS. (2021, December 1). ICD-10. Centers for Medicare and Medicaid Services. Retrieved March 25, 2022 from
https://www.cms.gov/Medicare/Coding/ICD10
Harrington, M. K. (2019). Health care finance and the mechanics of insurance and reimbursement (2nd ed.). Jones &
Bartlett Learning. https://bookshelf.vitalsource.com/books/9781284203301
MLN. (2021, February). Evaluation and Management Services Guide. Center for Medicare and Medicaid Services (CMS).
Smiley, K. (2020). Medical billing & coding for dummies (3rd ed.). John Wiley & Sons, Inc.
TDC Group. (2014, November 10). Healthcare billing risks. [Video]. YouTube.
https://www.youtube.com/watch?v=w-f68sRko_A&t=261s
TriCountyAllied. (2014, May 7). Medical coding vs. medical billing. [Video]. YouTube.
https://www.youtube.com/watch?v=f6LnlANMg5k&t=222s
Thank you!