BASIC PRINCIPLES OF PROCEDURE CODING

Chapter 7


BASIC PRINCIPLES OF PROCEDURE CODING




Key Terms



add-on codes


codes used to expand the scope of a basic procedure code. Add-on codes are never used alone, and they are never listed first.


anatomic modifiers


Level II HCPCS modifiers that identify specific anatomical parts of the body; they are used when the procedure code does not include that information.


comprehensive code


a code that includes all the services essential to accomplishing a service or procedure; also called a bundle or a package.


Correct Coding Initiative (CCI)


a Medicare editing system designed to control improper coding.


CPT


Current Procedural Terminology; the Level I HCPCS procedure codebook updated and maintained by the American Medical Association.


fragmentation


occurs when a service that is normally completed in one visit is broken apart to require two or more visits.


global period


the time period during which all care related to a procedure is considered to be part of the code that reports the procedure, and it may not be billed separately.


HCPCS


HCFA Common Procedure Coding System; the Level II HCPCS procedure codebook updated and maintained by the CMS.


indicators


CCI indicators designate which codes can be pulled out of a bundle and which cannot.


modifiers


used with a procedure code to report that a service or procedure has been altered by a specific circumstance.


mutually exclusive code pairs


service or procedure combinations that would not or could not reasonably be performed at the same session, by the same provider, on the same patient.


place of service codes


codes used to identify where a service is rendered.


single component codes


codes used to bill services when only one component of a comprehensive procedure is performed.


special report


a report that explains or clarifies an unusual, variable, or infrequently performed service or procedure.


starred procedures


deleted in 2004, starred procedures were relatively minor surgical procedures that were not bundled and did not have a global period. All preprocedure and postprocedure work was reported separately.


type of service codes


used to categorize the type of service and give a clearer picture of what occurred.


unbundling


when a group of procedures covered by a single comprehensive code are each reported separately instead of using the comprehensive code.


unlisted procedure codes


used when CPT does not contain an appropriate entry. They end in -9 or -99. Each section of CPT has unlisted procedure codes.



Introduction


This chapter covers the basic principles of procedure coding for services, procedures, and supplies that are not evaluation and management (E/M) services. Coding for E/M services was covered in Chapter 6.


The HCFA Common Procedural Coding System (HCPCS—pronounced “hick-picks”) once was divided into three levels, but effective December 31, 2003, the third level was discontinued. The Health Care Financing Administration (HCFA—pronounced “hick-fuh”) is now called the Centers for Medicare and Medicaid Services (CMS), but the “H” in HCPCS still stands for “health care.”


The Level I HCPCS codes are found in the CPT codebook. “CPT” stands for Current Procedural Terminology. CPT is a registered trademark of the American Medical Association (AMA). The AMA maintains the CPT codebook and updates it annually. The fourth edition of CPT was first printed in 1977, and it has been revised every year since then. It is commonly called CPT-4. Unless otherwise indicated, the CPT codes used throughout this textbook will refer to CPT-4 codes.


Level I CPT is now divided into three categories of codes. The original, traditional part of CPT is called Category I, which contains the main body of procedure codes. Category I codes consist of five numeric digits, with no decimal points. In 2004, Category II was introduced. The Category II codes consist of four numeric digits followed by the letter F. They are supplemental codes that can be used for performance measurement. In 2002, Category III was introduced. The Category III codes consist of four numeric digits followed by the letter T. They are temporary codes assigned to new emerging technology.


The Level II HCPCS procedure codes are found in the HCPCS codebook. HCPCS was first developed in 1983 to provide a means to report medical supplies and medical, dental, and ancillary services not reported in CPT. HCFA developed the HCPCS codebook, and CMS updates it annually. HCPCS codes begin with a single letter (A through V), followed by four numeric digits, with no decimal points. Level I CPT codes and Level II HCPCS codes are national codes.


Level III codes were discontinued effective December 31, 2003. However, you might come across them when performing collections or audits on old claims, so you still need to know they once existed. Level III codes were local codes assigned and maintained by individual state Medicare carriers. They were found in Medicare newsletters and bulletins. Level III codes began with a single letter (W through Z), followed by four numeric digits. They were assigned to new services and procedures on an “as needed” basis.


Medical codes are subject to annual revision, and coding becomes more complex every year. Physicians are very busy and must keep up with continuing medical education units (CMEs) to maintain their medical licenses. They seldom have time to also keep up with the changes to medical coding rules every year to correctly code their own services. Therefore medical coding has become a distinct specialty in the medical office, and another member of the medical office team usually performs or confirms the coding.


Procedure coding is a complex subject that cannot be fully covered in one chapter. The information presented in this chapter is an introduction to procedure coding and a broad overview of the most important coding rules. It is not as comprehensive as the information presented in a medical coding course. Specialty-specific coding rules are not addressed.


The compliance guidance documents issued by the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) strongly recommend that job descriptions be used to assign accountability for specific tasks in the medical office. The OIG developed the compliance guidance documents to help various types of medical entities meet the “accountability” requirements of the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191) (HIPAA). Many of the OIG’s recommendations relate directly to billing and collections, including assigning responsibility for gathering the information for the billing and coding of medical claims. The Medicare website for medical office education, www.cms.hhs.gov/medlearn/cbts.asp, notes how accountability for given tasks is typically assigned in a medical office, and that information provided the basis of accountability as addressed in this chapter. However, please remember that each medical office decides exactly which employee positions are assigned individual accountability for each task, and it will vary from one office to another. In addition, in a small medical office, one multiskilled professional often fills numerous employee positions.


The purpose of this chapter is to introduce the procedure codebooks used for physician and provider billing and to lay the foundation for procedure coding in the physician’s office. This chapter focuses on the Level I CPT and Level II HCPCS national codes for services, procedures, and supplies. When you finish this course, you will be able to:






Finding Information in Procedure Codebooks


You will need a current-year CPT codebook and a current year HCPCS codebook for this chapter. Open your codebooks and find each item as we discuss it.




Medical procedure codes are in a constant state of change, usually based on new medical research and technologic improvements. It is vitally important to always use current-year codebooks. When codes for a particular section of the codebook are expanded, the meanings of previously assigned codes often change as well. If you are not using codes that are valid for the date of service, you could inadvertently cause penalties or denials, both of which result in a needless reduction in payment.




Let’s take a closer look at the Level I CPT and Level II HCPCS codebooks.



LEVEL I—CPT


The CPT codebook is organized into three categories. Category I, the main body of the CPT codebook, is organized into six sections. The major sections in the main body of the CPT codebook are:



In addition, there are Category II codes (0001F-6999F) and Category III codes (0001T-9999T).


CPT Category I codes consist of five numeric digits. The procedures and services are listed in numeric code order in the main body of the codebook, with one exception. The “Evaluation and Management (E/M)” section is used the most and therefore is placed at the beginning of the main body, even though the numeric order would have placed it near the end, in the middle of the Medicine section.


Each section in Category I is divided into subsections and subheadings according to body part, service, or diagnosis. Guidelines are given at the beginning of each section, and special notes and directions are given at the beginning of many subsections and subheadings to clarify how to report the information in that section, subsection, and/or subheading.


Categories II and II are still small and only have one section each. However, guidelines are given at the beginning of the sections, and special notes and directions are given at the beginning of some subsections and/or subheadings to clarify how to report the information in that section, subsection, and/or subheading.


The code narrative in the CPT codebook is not always intended to be a complete description of the service or procedure. To save space, an indented entry includes the common portion of a preceding entry. The common portion is the part of a description before the semicolon (;).




Add-on codes identify items that are not included in the description for a particular procedure code but that expand the scope of the service for the code. Add-on codes are never used alone, and they are not to be used with modifier -51 (multiple procedures). They are used in addition to the primary procedure code to accurately report an expanded service. The phrase in the parentheses following the add-on code tells exactly what codes the add-on code should be used with, and it may not be used with any other codes.




Appendixes A through I and the alphabetical index follow Categories I, II, and III in the Level I CPT codebook.


Appendix A contains a complete list of Level I CPT modifiers and selected Level II modifiers (anatomic). Modifiers are used with procedure codes to report that a service or procedure has been altered by a specific circumstance. The Level I and Level II (and formerly Level III) code sets each have modifiers that may be used with code numbers in both levels. Multiple modifiers may be reported when applicable. Some modifiers have restrictions, and some apply only to specific settings. Modifiers are discussed in more detail later in this chapter.


Appendix B contains a summary of codes that have changed since the previous edition. Appendix C gives clinical examples of conditions that might warrant specific levels of E/M services when documentation requirements are also met for the code.


Appendix D is a list of valid add-on codes.


Appendix E is a list of codes exempt from modifier -51 (multiple procedures).


Appendix F is a summary of CPT codes that are exempt from modifier -63.


Appendix G is a summary of CPT codes that include conscious sedation as part of the bundle.


Appendix H is an alphabetical index of performance measures (Category II codes) by clinical condition or topic.


The alphabetical index in the CPT codebook is organized using four primary types of main terms:





A main term in the alphabetic index is bolded. It can be listed alone or it can be followed by up to three levels of modifying terms, with the second and third levels of modifying terms indented to show that they only apply to the preceding modifying term.




Either a single code or a code range shows where to find the entry in the main body of the CPT codebook. When there are only two codes or the code range is nonsequential, multiple codes will be separated by a comma rather than a hyphen.




Do not code from the alphabetical index alone. Even when only one code is listed, look it up in the main body to be sure the description for the code accurately matches the service performed as it is documented in the medical record.


When the CPT description includes items not performed and a better code is not available, a modifier is required to accurately report that the entire service, as described in CPT, was not performed. Modifier -52 is appended to the CPT code to report a “reduced” service.


When additional items are performed and documented, additional codes and/or modifiers are sometimes, but not always, required to accurately report the service. Modifier -51, multiple services, is often added to additional codes, but sometimes modifier -59 is a better choice, and sometimes codes are exempt from using -51. Read modifier requirements in Appendix A carefully and codebook directions for each specific code carefully. When in doubt, call the payor and politely ask if the codes may be billed together for the same date of service. Remember to document the call: time, date, whom you spoke with, and the directions you were given.


Specific code numbers are assigned in each section of the main body for “unlisted” services or procedures related to that section. Unlisted procedure codes are only used when CPT does not contain an appropriate entry. Most often, they are used for new, emerging technology and for seldom-used procedures that do not get enough use to warrant a code. A special report is always required when an unlisted code is used.


A special report is a detailed description of a service or procedure and an explanation of why this service or procedure is the best course of action for the patient. Sometimes a special report is required to clearly identify an unusual, variable, or infrequently performed service or procedure. A special report is usually printed on letterhead stationery and signed by the physician who performed the service or procedure. Supporting documents, such as a photocopy of an article in a medical journal, may be attached to further justify medical necessity.


CPT instructs that any qualified physician may report any of the codes in the CPT codebook. The listing of a service or procedure in a particular section of the codebook does not restrict the use of the codes in that section to any particular group or specialty.


However, be aware that some payors use secret “black box” edits that monitor code selection. They consider these edits to be trade secrets. If your physician does not normally perform the reported service, the claim might be automatically flagged for closer scrutiny. This type of edit might apply when a general practice physician performs a service most often performed by a specialist, such as if an internal medicine physician reports a code for abdominal surgery. It might also apply when a specialist performs a service that is not normally in the scope of that specialty, such as when an orthopedic surgeon reports a code for bronchoscopy.


Payors know that claims that report improbable situations are most apt to occur when a biller or coder transposes two or more digits of the correct code for a service; and coding that reports an improbable situation seldom matches chart documentation. Therefore, it is wise to send supporting documentation with the claim any time you bill a service not normally performed by your provider. Secret “black box” edits are not part of the national standard billing rules and coding conventions, and specific details about them are seldom known.



LEVEL II—HCPCS


Level II HCPCS codes are national codes, and they are required when billing for government payors (Medicare and Medicaid). Each year an increasing number of commercial payors and managed care payors also provide coverage for and require the use of HCPCS codes.




HCPCS codes are used to report services and supplies not included in CPT or procedure codes with more detail than included in CPT. When codes for the same service or supply are available in both CPT and HCPCS, use the HCPCS code unless the payor does not provide coverage for them.




99070, the “supply” code in CPT, is very nonspecific. The description reads, “supplies and materials (except spectacles), provided by the physician over and above those usually included in an office visit or other service rendered (list drugs, trays, supplies, or materials provided).” Most of the codes in the HCPCS codebook provide specific details about an item that would fall in this nonspecific category in the CPT codebook. For example, A4550 is for “Surgical trays” only, and the entire “J” category is for specific drugs.


HCPCS codes are organized alphabetically and numerically using alphanumeric codes. They begin with a single letter (A through V) followed by four numeric digits. In the 2004 Professional Edition HCPCS codebook published by Ingenix, the index is listed after the introduction but before the main body of codes. Seven appendices follow the main body of codes. The arrangement of information and number of appendixes may vary with other publishers and other editions of the codebook.


The codes in the HCPCS codebook are organized by alpha categories:



image A-codes report transportation services, medical and surgical supplies, and administrative, miscellaneous, and investigational services, procedures, or supplies.


image B-codes report enteral and parenteral therapy and the related equipment and supplies (feeding tubes, IV fluids, etc.).


image C-codes report codes used by Outpatient PPS, the Medicare APC classification system for outpatient hospital charges. The codes mainly represent drugs, biologicals, and devices eligible for transitional pass-through payments. When the diagnosis codes provide medical necessity, they are billed in addition to other APC services.


image D-codes report dental services and procedures, dental prosthetics, and dental supplies.


image E-codes report a wide variety of durable medical equipment and devices and related supplies and repairs.


image G-codes report temporary procedures/professional services. These codes replace many local codes for CMS and other carriers.


image H-codes report drug and alcohol abuse treatment services.


image J-codes report a limited selection of drugs and medications, primarily those reimbursed by Medicare. Each code designates routes of administration and a dosage or dosage range applicable to the specific code.


image K-codes report temporary codes assigned to Medicare’s Durable Medical Equipment Regional Carriers (DMERCs) and temporary codes for wheelchairs, wheelchair accessories, spinal orthotics, immunosuppressive drugs, and miscellaneous temporary codes.


image L-codes report orthotic procedures, devices, supplies, and repairs and prosthetic procedures, devices, supplies, and repairs.


image M-codes report medical services and cardiovascular services. These codes also are used to replace former local codes.


image P-codes report pathology and laboratory services, chemistry and toxicology tests, pathology screening tests, microbiology tests, and miscellaneous tests.


image Q-codes report temporary codes and include some medication and injection codes as well as some cast supply codes. They also replace some of the former local codes.


image R-codes report diagnostic radiology services.


image S-codes report temporary national codes. These are primarily non-Medicare medications and procedures.


image T-codes are national codes established for state Medicaid agencies. They replace many of Medicaid’s local codes.


image V-codes report vision services, equipment and supplies, hearing services, and language-pathology services.


To find an item in the HCPCS codebook, you look up the item or service in the alphabetical index and confirm the code in the tabular list.


The index is listed after the codebook introduction and before the main body of codes. The alphabetical index is organized by main terms with subterms listed under the main terms. Like the CPT codebook, anatomic locations are acceptable as a main term in the index.




Appendix 1 is a complete list of Level II modifiers. HCPCS modifiers are two digits: The first is always an alpha digit, and the second may be either an alpha or a numeric digit. They are recognized by payors nationally, including payors that do not accept HCPCS codes. Some of the HCPCS modifiers are anatomic modifiers that identify a specific part of the body. Others clarify the credentials of the provider. Most of the others provide additional details that influence reimbursement. HCPCS modifiers are used with Level I CPT and Level II HCPCS codes.


Appendix 2 contains HCPCS abbreviations and acronyms.


Appendix 3 is a table of drugs.


Appendix 4 contains Medicare references and revisions to the CMS manual system. MCM is the Medicare Carriers’ Manual. CIM is the Coverage Issues Manual. This is the largest appendix.


Appendix 5 is a list of companies that accept Level II HCPCS codes.


Appendix 6 is a list of codes for which CPT codes should be reported. Normally, when similar codes are available in both Level I CPT and Level II HCPCS, HCPCS codes override CPT codes except when the payor does not accept HCPCS codes. These codes are the exception to that rule.


Appendix 7 is a list of new, changed, or deleted codes.





Importance of Code Order


When more than one service or procedure code is reported for the same date of service, the order in which the codes are reported can influence the amount of reimbursement. Services listed after the first service on a particular date are usually paid at a lower rate because some of the work included in each code has already been accomplished and is not repeated. Typically, the first service or procedure code listed is reimbursed at 100%, the second code at 50%, and subsequent codes at 25% to 50%.




Comprehensive codes are combination codes. They are available for many procedures that are commonly performed together. Some codes clearly define everything included in the bundle, and others assume that every step and sometimes every supply inherent to the procedure is included in the comprehensive code package or bundle. You must use the comprehensive code when one is available and everything included in the code has been performed and documented. When a comprehensive code is not available, the second procedure is paid at a reduced rate to accurately reflect the actual amount of work performed.


Codes for each date of service are sequenced on the claim form according to reimbursement value, not according to the order in which they are performed. The code with the largest reimbursement value should be listed first, followed by codes in descending order of reimbursement value.


The exact same codes are occasionally reported in a different order for different payors, depending on the payor fee schedules. For some payors, reimbursement value order only applies to surgery, but other payors use this principle for every service. The only way to know for sure is to read your contracts and watch reimbursement trends. To avoid any confusion when your contracts do vary, it is better to develop the habit of listing all codes for a specific date of service by reimbursement value.




For example: Shannon is a 12-year-old girl with a medical history of juvenile diabetes, insulin controlled, and she is recovering from a bout of pneumonia. When Shannon arrives with her mother for a follow-up office visit, a blood glucose (blood sugar) test using a reagent strip ($10.00) and a two-view chest x-ray ($25.00) are performed before the level 4 office visit ($140.00). The medical record documentation supports the level-four office visit, and the results of the blood glucose test and chest x-ray are recorded.


All work associated with each code is included in the code. Because the check-in and the check-out work are only performed once, the second and third codes are paid at a reduced rate. Shannon’s insurance plan pays 100% of the first code and 50% of each subsequent code performed on the same date of service.


The level-four office visit has the highest dollar value, $140.00, so it is coded first. Look in the CPT index under “evaluation and management, office and other outpatient.” Find the code range in the main body of the codebook. The level 4 office visit code for an established patient is 99214.


The chest x-ray has the second highest dollar value, $25.00, so it is coded second. Look in the CPT index under “chest, x-ray, 2-view” or under “x-ray, chest, 2-view.” Confirm the code in the main body of the codebook. The code for a 2-view chest x-ray is 71020.


The blood glucose has the lowest dollar value, $10.00, so it is coded last. Look in the CPT index under “glucose, blood test.” Confirm the code in the main body of the codebook. The code for blood glucose by reagent strip is 82948.


When billed correctly, the full price is billed for each code, and the reimbursement is received as follows: $140.00 (100%) + $12.50 (50%) + $5.00 (50%) for a total of $157.50.


If the codes had been billed chronologically instead of by reimbursement value, the total reimbursement received would have been $10.00 (100%) + $12.50 (50%) + $70.00 (50%) for a total of only $92.50, a needless loss of $65.00.




























Payor $ Cholecystectomy first $ Appendectomy first First code
Medicare $ _______________________ $ _______________________ $ _______________________
Aetna $_______________________ $ _______________________ $ _______________________
BCBS $_______________________ $ _______________________ $ _______________________


image




Correct Coding Initiative


In the early 1990s, the General Accounting Office (GAO) compared Medicare’s software system with commercial and managed care payors’ software systems that included an editing process. They concluded that software edits reduced fraud and abuse while saving money. In response, HCFA contracted with AdminaStar Federal, a Medicare carrier in Indiana, to develop software edits for Medicare. The resulting system of edits was named the Correct Coding Initiative (CCI). The CCI editing system went into effect on January 1, 1996.


CCI edits are based on:



The resulting edits are defined in the CCI. No other payor publishes this information. Because Medicare based the CCI on the edits of other payors nationwide, a study of the CCI will provide the clearest information available about the edit process for other payors as well.


The AMA’s Correct Coding Policy Committee works with the specialty societies to evaluate disputed edits and to evaluate proposed new edits. AdminaStar agreed to regularly review the suggestions it receives and make necessary corrections to the code edits.


Therefore the CCI is dynamic. The rules have changed many times over the years, with additions and deletions in each new version. It is important always to use the most current version of the CCI.


You may pay to subscribe to a quarterly update service through the National Technical Information Service (NTIS) (703-605-6060 or 800-553-6847), or you may purchase a complete copy of the CCI, with code-linking information, from NTIS and update it yourself from your carrier’s Medicare updates or from the CMS website (www.cms.gov.hhs). In addition, the entire manual and the updates can be downloaded for free from the CMS website. From the main page, do a search for “CCI” and follow directions.


All the information presented here about the CCI is taken from a purchased edition of the CCI and updated from CMS resources available over the Internet.





SURGICAL CODES


Surgical services typically include a specified number of days during which all care related to the procedure is considered to be part of the procedure. This is commonly referred to as the global period. In some cases, the global period begins as much as 3 days before the procedure (Medicare inpatients) and may extend as long as 90 days after the procedure. Most of the codes in the surgery section have either a 10-day or a 90-day follow-up period. The smaller procedures (generally those that can be performed in the office) have a 10-day follow-up period and the larger procedures (generally those that are performed in an operating room) have a 90-day follow-up period.


The CPT code 99024 is used to report postoperative follow-up visits that were included in the global charge for the surgery. Additional payment is not expected for these services. However, if a patient is seen during a global period for a visit that is not included in the global charge, modifier -24 is attached to the E/M code for the visit to notify the payor that this visit is an unrelated service, and therefore must be paid separately.




Unless otherwise specified, services that should not be separated from a surgical comprehensive code include:



image Cleansing, shaving, prepping of skin


image Insertion of IV access for medication


image Draping and positioning of the patient


image Sedative or anesthesia administered by the physician performing the procedure (Modifier -47 is used to identify this service when it is performed.)


image Surgical approach, including identification of anatomic landmarks; incision; evaluation of the surgical field; lysis of simple adhesions; isolation of neurovascular, muscular, bony, or other structures limiting access to the surgical field; and muscular stimulation to identify the muscle


image Surgical cultures


image Wound irrigation


image Controlling intraoperative bleeding using clamps


image Insertion and removal of drains, suction devices, dressings, or pumps into the same site


image Surgical closure


image Application, management, and removal of postoperative dressings, including pain management devices and other devices and associated care of the sites (Trans [TENS] units may be billed separately by anesthesia.)


image Preoperative, intraoperative and postoperative documentation, including photographs, drawings, dictation, and transcription


image Surgical supplies, unless listed as an exception in an existing CMS policy


Through the end of 2003, the CPT manual used a concept called starred procedures. Although it is no longer a part of the CPT manual, and therefore no longer a part of the CCI, you may encounter these codes when doing collections on old claims or performing a retrospective audit on old claims. Therefore you still need to know what they were. Surgical procedures that were identified in CPT by an asterisk (*) were called starred procedures. Starred procedures were usually the smallest surgical services. The national billing conventions for starred procedures were printed in the “section guidelines” at the beginning of the surgery section of the CPT codebook.


Code definitions for starred procedures included only the procedure as listed. Preprocedure and postprocedure work varied widely and was billed separately. If complications arose, they were also billed separately.


Unless otherwise specified in a payor contract, preoperative services for starred procedures were billed as follows:



image When a starred procedure was performed on the same day as the initial visit for a new patient and the starred procedure, though small, was the largest service performed that visit, the codes for the starred procedure and CPT code 99025 were used together to report the service. An E/M code was not billed and follow-up care, if any, was billed separately. Code 99025 was deleted when the starred procedures were deleted.


image When a starred procedure was performed during a visit that included a significant E/M service, both services were billed, and modifier -25 was attached to the E/M service. Follow-up care, if any, was billed separately.


image When a starred procedure required hospitalization or occurred during a hospitalization, a hospital visit and the starred procedure were both billed. Follow-up care, if any, was billed separately.

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May 25, 2017 | Posted by in GENERAL & FAMILY MEDICINE | Comments Off on BASIC PRINCIPLES OF PROCEDURE CODING

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