Lesson

Medicare is an example of a third party reimbursement process. Medicare uses the RBRVS payment methodology as the basis and framework for the physician fee schedule. It is important for a coder to understand the difference in the types of codes that are used for both Medicare Part A and Part B. Inpatient Facility coding/billing will primarily be paid under the Medicare Part A and outpatient facility/ physicians will fall under the Medicare Part B payment system. Most providers will be required to follow all of the regulations under the Health Insurance Portability and Accountability Act (HIPAA) which governs five areas related to health care; Health Coverage Portability, Health Information Privacy, Administration Simplification, Medical Savings Accounts, and Long Term Care insurance. Some key terms from this chapter to remember:

• CMS – Centers for Medicare and Medicaid System
• HMO – Healthcare Maintenance Organization
• MCO – Managed Care Organization
• HIPAA – Health Insurance Portability and Accountability Act
• RBRVS – Resource Based Relative Value Scale

The CMS web site has a web based training that will introduce you to the fundamentals of the Medicare program. click here for the web-based training.

HIPAA was enacted in 1996 to ensure protection of a patient's personal health information as well as the development of security requirements and national standards to maintain the confidentiality, integrity, and availability of electronic protected health information. It is important for a healthcare provider, health plan, employers, or individuals that are considered a covered entity under the HIPAA regulations to understand their responsibilities for the protection and security of Personal Health Information (PHI). There are fines and possible incarceration for individuals committing HIPAA violations.

There are resources that may assist you with questions during your coding career:

• United States Department of Health and Human Services: http://www.hhs.gov/ocr/privacy/hipaa/understanding/index.html
  
• Centers for Medicare & Medicaid Services, HIPAA General Information: http://www.cms.gov/HIPAAGenInfo/01_Overview.asp#TopOfPage
  

When most physicians hear the word compliance they begin to have concerns that their organization will be at risk for fraud and abuse, most likely through governmental entitlement programs such as Medicare and Medicaid. Most recently The Office of Inspector General (OIG) issued rules and regulations for coding processes which prevent the incidence of erroneous claims through fraudulent billing practices.

Below is the link with the OIG rules on compliance for physician billing: http://www.oig.hhs.gov/authorities/docs/physician.pdf.

Fraud may present in a variety of ways, a few of these are; billing for services not furnished by the provider, incorrect diagnosis codes applied for payment purposes, receiving money as a "kickback", unbundling charges that are normally a bundled service, and routinely waiving a patient's co-payment or deductible.

As coders or health information professionals, managers or supervisors, it is our responsibility to ensure that we are following through with the guidelines as established by the OIG.

CMS developed the RBRVS payment system primarily to decrease Medicare expenditures, distribute physician reimbursement more equally, and to ensure patients received quality health care at a reasonable rate. The RBRVS system includes three components that are defined by the physician's work, overhead, and malpractice expense. CMS has applied a value to each of these components to equal one Relative Value Unit (RVU) for the service. Most CPT and HCPCS codes that CMS has identified as an allowable service will have a RVU assigned to it and these can be found in the CMS RVU tables. (http://www.cms.gov/PhysicianFeeSched/PFSRVF/list.asp#TopOfPage)

These values are then multiplied by a conversion factor which is a national dollar amount that is applied to all allowable CPT & HCPCS codes and this, along with the Geographic Practice Cost Indices (GPCIs) will make up the CMS physician schedule.

The American Medical Association (AMA) and some third-party payers developed CPT in the 1960s. It was used as a communication tool between third-party payers and physicians. It was not until the mid-1980s that hospitals began to use CPT. The Omnibus Budget Reconciliation Act demanded that hospitals use CPT to report outpatient services.

HCPCS: This is quite confusing. When CMS decided to use CPT (which are also considered Level 1 HCPCS codes) for reimbursement to hospitals/physician offices, there was one big hurdle - not everything that is reimbursed by Medicare/Medicaid is contained in CPT (for example: drugs, supplies, and ambulance services). Keep in mind that CMS does not own CPT; therefore, CMS cannot control the contents. To supplement CPT, CMS (formerly called Health Care Finance Administration, HCFA) wrote its own book of codes called Level II National Codes. When billing Medicare for an ace bandage given to a patient, the coder would have to reference Level II codes, because there are no codes in CPT for supplies.

CMS subcontracts with local carriers to manage claims processing in the geographic area. Prior to 2004, CMS gave local carriers the authority to also create codes, if the need arose. These codes were called Level III or Local Codes. The codes were communicated through newsletters called Medicare Bulletins. This two-part system is called HCPCS. Sometimes CPT and HCPCS are used interchangeably, but that technically is not correct. Local codes are no longer in use, but Level III codes are.

CPT/HCPCS codes are used to identify procedure/services, and ICD-9-CM codes which will transition to ICD-10-CM in the future, continues to be the coding system used by all healthcare providers for diagnosis codes. ICD-9-CM can be described as answering why services were performed, and CPT/HCPCS can be described as telling which services were performed. ICD-9-CM includes both diagnosis and procedure coding. In the future ICD-10 will be broken out in two sections, ICD-10-CM for diagnosis and ICD-10-PCS for procedural coding. ICD-9CM/ICD-10-PCS continues to be the only system for coding inpatient surgical procedures for hospitals. Although third-party payers want CPT/HCPCS for billing purposes on outpatient services, hospitals will assign ICD-9-CM / ICD 10-PCS procedure codes for their hospital's database for statistical reasons as well as inpatient billing. Many private insurers also accept HCPCS Level II codes.

Healthcare Common Procedure Coding System (HCPCS)

The HCPCS Level II codes are a standard code set maintained and published by CMS. These codes can be identified by their alphanumeric characters. The purpose of these codes is to offer hospitals, healthcare, and ancillary providers a billing system for reimbursement of supplies, services and procedures that are not identified within the CPT Codes. There are many types of categories within the HCPCS Level II codes that are defined as follows:

• Permanent National Codes – These codes are used by both private and public health plans and all types of healthcare providers to use for billing.
• Dental Codes – These codes are maintained by the American Dental Association and contain codes for dental procedures and supplies.
• Miscellaneous Codes – These are typically used by a healthcare provider to describe a service or supply that there is currently not national code in place.
• Temporary National Codes – These codes are created to be used temporarily until a permanent national code can be created.

The HCPCS codes are broken out into seventeen different categories that contain codes that describe services and supplies from ambulance to vision. The most important facts to remember when coding HCPCS services or supplies is not to code from the index but to use the index as a starting point in finding the correct HCPCS code and then review the entire code description to confirm it is the correct code to use. A list of the current and past years of the HCPCS codes can be found on the CMS web site:

• http://www.cms.gov/HCPCSReleaseCodeSets/
  
• http://www.cms.gov/medhcpcsgeninfo/01_overview.asp
  

CPT Codes

CPT stands for Current Procedural Terminology. It includes codes for every procedure and service currently performed. The codes are updated and revised each year. Insurance companies widely accept these codes for standardized billing.

The CPT Manual was developed by the AMA (American Medical Association). It converts descriptions of medical, surgical, and diagnostic services to five-digit codes. It was designed to help providers communicate with third-party payers.

CPT-4 Sections

• Evaluation and Management
• Anesthesia
• Surgery
• Radiology
• Pathology and Laboratory
• Medicine
• Category II Codes
• Category III Codes
• Appendices A through O:
  • Modifiers
  • Summary of Additions, Deletions, and Revisions
  • Clinical Examples
  • Summary of CPT Add-On Codes
  • Summary of CPT Codes Exempt from Modifier 51
  • Summary of CPT Codes Exempt from Modifier 63
  • Summary of CPT Codes that Include Moderate (Conscious) Sedation
  • Alphabetical Clinical Topics Listing
  • Genetic Testing Code Modifiers
  • Electrodiagnostic Medicine Listing of Sensory, Motor, and Mixed Nerves
  • Product Pending FDA Approval
  • Vascular Families
  • Renumbered CPT Codes - Citations Crosswalk
  • Summary of Resequenced CPT Codes
  • Multianalyte Assays with Algorithmic Analyses
• Index

Each year, the CPT code book is updated. Physicians are expected to begin using the new edition on January 1st. Supplementary codes are provided twice a year, on January 1 and July 1. Visit the AMA web site for information regarding CPT Codes.

As a coder, it will be your responsibility to accurately code the services documented to ensure correct reimbursement for the treatment provided to the patient.

With each section in the text, there will be some "stand-out" coding issues that will likely be confusing or difficult to understand.

Here's a tricky one:

Semicolon. This is one of the most confusing format concepts. If a code description contains a semicolon and there is one or more code descriptions indented underneath, then the description before the semicolon is a home description and the indented code needs the home description in order to fully complete the code description.

Here's an example:

The code 27705 states Osteotomy; tibia. The code 27707 has just the term fibula. The code 27709 states tibia and fibula. If I asked you to read 27707 and you just said "fibula," I would ask, "What about the fibula?" You need the home description before the semicolon in order to complete the description. It is simply a way to save printing space. So code 27707 would be Osteotomy fibula and 27709 is Osteotomy of both the tibia and fibula.

Look at another example, code 30150:

30150    Rhinectomy; partial 30160        total

If the physician documented that the patient had a total rhinectomy, the correct code would be 30160. Would you assign CPT codes 30150 and 30160 together? Answer: No; it does not make sense. Either it is partial or total, not both.

One of the most common mistakes new coders make is to code everything. Be sure not to try to code approaches and closures (just like in ICD-9-CM and ICD-10-PCS). Scan the operative reports for action words. Typical action words would be: excision, incision, endoscopy, exploration, etc.

Always begin with the index (alphabetical) at the back of the book. You can look up the code by: service or procedure, anatomic site, condition or disease, synonym (the same as), eponym (named after someone), or abbreviation. Then, look up the suggested code to determine more specific code information. Read, read, and read again. Sometimes two codes look the same, so try and figure out the difference. You must look up unfamiliar medical terms or abbreviations.

This week's lecture includes an interactive course available on the CMS web site. First, you'll need to go to Web-based Training Courses section of the following web site by clicking here: Interactive Web-based Training. From this page, click to view all currently available web-based training courses.

Once you've reached this page, please scroll down and find the course titled: Medicare Fraud and Abuse: Prevention, Detection, and Reporting (Developed May 2012, Revised November 2014).

If you have not done so already, you will be required to register in order to view this course. There is no fee.

This is a great learning opportunity, taken straight from the authorities. Please take advantage of it!

The following activity provides you with an opportunity to test your knowledge about key points from this week's readings.