Fundamentals of Medical Coding

What is Medical Coding?

Medical coding is the transformation of healthcare diagnosis, procedures,
medical services, and equipment into universal medical alphanumeric codes.
The diagnoses and procedure codes are taken from medical record
documentation, such as transcription of physician’s notes, laboratory and
radiologic results, etc. Medical coding professionals help ensure the codes
are applied correctly during the medical billing process, which includes
abstracting the information from documentation, assigning the appropriate
codes, and creating a claim to be paid by insurance carriers.

What Does a Medical Coder Do?

Medical Coders work in a variety of settings and their individual workday
may differ based on the size of a facility, type of physician, type of specialty,
etc. The following example outlines what a typical day in the life of a Medical
Coder may look like.

After settling into the office and grabbing a cup of coffee, a medical coder
usually begins the workday by reviewing the previous day’s batch of patient
notes for evaluation and coding. The type of records and notes depends on
the clinical setting (outpatient or facility) and may require a certain degree of
specialization (Larger facilities may have individuals who focus on medical
specialties while coders who work in smaller, or more general offices, may
have a broad range of patients and medical conditions.).

Selecting the top patient note or billing sheet on the stack, the coder begins
reviewing the documentation to understand the patient’s diagnoses assigned
and procedures performed during their visit. Coders also abstract other key
information from the documentation, including physician names, dates of
procedures, and other information.

Coders rely on ICD-10 and CPT code books to begin translating the
physician’s notes into useful medical codes. ICD-10 and CPT are both coding
systems used in healthcare billing and medical records:

 ICD-10
The International Classification of Diseases, 10th Edition, is a diagnostic
coding system that classifies diseases, conditions, and other health
issues. ICD-10 codes are used to specify a patient's diagnosis, which is
important for medical records and insurance claims. ICD-10 codes are
alphanumeric and seven characters long. The first character is a letter,
followed by two numbers that represent the category of disease or injury.

 CPT
Current Procedural Terminology is a procedural coding system that describes
the medical services and procedures performed by a healthcare
professional. CPT codes are used to report services to payers for
reimbursement. CPT codes are detailed invoices that list the specific
procedures or services provided to a patient. For example, CPT code 93842
refers to "Electrical stimulation, multiple channels, 4 or more
areas/electrodes".

An example of basic procedure documentation and subsequently assigned

codes can be seen below.

Example:
Date of Procedure: 6/5/20xx
Patient Name: John Smith
DOB: 10/13/19xx
Diagnosis: Pigmented mole
Procedure Performed: Cryoablation of pigmented mole
Indications: Mr. Smith is a 50-year-old male who comes into the office today
to have a pigmented mole removed. The mole is located on the patient’s
back right at the level of his waistband, which is causing discomfort and
irritation. He is requesting removal of the offending mole. The plan today is
to remove the mole via cryoablation.
Procedure: The area around the mole was prepped with a Betadine solution
and injected with 1 cc of lidocaine mixed with epinephrine. We proceeded to
apply liquid nitrogen to the mole to freeze it down to the cutaneous level for
the adequate destruction of the lesion. I placed a dressing on the area to
avoid irritation by the patient’s clothing. The patient tolerated the procedure
well with no complications, with the plan to return to the office in a week for
follow-up.
Based on the previous note the medical coder would assign the following
codes:
CPT code: 17110 – Destruction (e.g. laser surgery, electrosurgery,
cryosurgery, chemosurgery, surgical curettement), of benign lesions other
than skin tags or cutaneous vascular proliferative lesions; up to 14 lesions.
ICD-9-CM code: D22.5 Melanocytic nevi of the trunk.
Many cases are simple to code. Individual medical coders develop a detailed
understanding of the procedures and commonality of their specific clinic or
facility. Coders occasionally encounter a difficult note requiring in-depth
research, taking more time to code correctly. Even among the more
commonly used codes are significant gray areas open for examination
among coders. With very complex or unusual cases, coding guidelines may
be confusing to interpret. Experienced coders will rely on their network of
peers and professionals to discuss nuances in online forums, networking with
specialists they have met at national conferences, or consult with co-workers
to help understand the issue and determine the proper codes. Ongoing
training and current coding-related periodicals also provide important
opportunities to advance understanding and professionalism.

Finally, the coder completes the chart and begins the next patient record.
This cycle of reading, note taking, assigning codes, and computer entry
repeat with each chart. Most coders will spend most of their day sitting at the
computer reading notes and using their computer to enter data into a billing
system or search for information to clarify the documentation in the notes.

Professional coders largely work independently. However, interaction with

coding staff, medical billers, physicians, and ancillary office staff is essential.
Medical coders are usually placed on tight production schedules and
expected to complete a determined number of notes each day or to keep
their lag days at a specified timeframe. Lag days are the number of days it
takes for the notes to be documented to the actual claims submission date.
The prime date is usually between two to five days.

Depending on the clinical setting, internal or external auditors will

periodically perform audits of the coding and documentation for accuracy
and completeness. The results of these coding audits are maintained by the
compliance department or the department supervisor and are a significant
part of job evaluations.

At the end of the day coders return unprocessed work, check productivity
either by a manual count or by running a system report and clean their work
area. Depending on the clinical setting, medical coders may share a
workspace with other coders assigned to opposing shifts where coding may
continue around the clock. Some coders work alone from their home office.

Is Medical Coding the same as Medical Billing?

The main task of a medical coder is to review clinical statements and assign
standard codes using CPT®, ICD-10-CM, and HCPCS Level II classification
systems. They work with patient medical records to transform raw data into
codes that are entered into a software program. Accurate coding helps
prevent misleading diagnoses and notes.

Medical billers, on the other hand, processes and submits claims to insurance
companies and government agencies on behalf of patients. Medical billers
interact with patients and insurance companies, and they create bills for
patients based on the codes from the medical coder.

The medical coder and medical biller may be the same person or may work
with each other to ensure invoices are paid properly. To help promote a
smooth coding and billing process, the coder checks the patient’s medical
record (i.e., the transcription of the doctor’s notes, ordered laboratory tests,
requested imaging studies, and other sources) to verify the work that was
done. Both works together to avoid insurance payment denials.

The medical coder and biller process a variety of physician services and
claims daily. Medical codes must tell the whole story of the patient’s
encounter with the physician and must be as specific as possible about
capturing reimbursement for rendered services.
Education and training are key to becoming a skilled and successful medical
coder. The first step coders must take is to have a thorough knowledge of
anatomy and medical terminology. It’s also important to become familiar
with the codebook resources CPT®, HCPCS Level II, and ICD-10-CM and their
coding systems. It’s also vital to know the coding systems’ corresponding
guidelines and what codes are accepted by which insurance plans, which
government and payer regulations to follow, and how to be compliant while
coding.

Besides assigning CPT®, ICD-10-CM, and HCPCS Level II codes correctly to

claims, coders may also audit and re-file appeals of denied claims. They may
step into the role of educator to providers and recommend the appropriate
codes that follow federal mandates and compliance. When coders are
auditors as well, they will require providers to use specific coding and billing
standards through chart audits. They may also speak on behalf of the
provider and patient on coverage and medical necessity issues. The standard
medical coding professional obtains the Certified Professional Coder (CPC®)
credential. The good news is coding-related jobs are expanding due to the
growing landscape of the business side of healthcare. For example, Certified
Professional Medical Auditor (CPMA®), Certified Professional Compliance
Officer (CPCO™), and Certified Physician Practice Manager (CPPM®), etc., are
areas that coders can branch into.

What role do medical coders play in the healthcare system?

Think back to the last time you visited a doctor. You were probably greeted
by a medical administrator, got your vitals taken by a nurse and then
examined by a doctor. But there’s a lot more happening behind the scenes
that patients never see.

After a medical provider examines or treats a patient, the insurance

company needs to understand what was done to process the bill. The
common language is too inexact to give the insurance company the accurate
details it needs, so a set of specific codes has been established to define
medical procedures.

Medical coding is essentially a specialized language for the medical and

insurance industries. Medical coders are the professionals who translate the
notes from the doctors and other medical professionals into a uniform set of
codes that is given to the insurance provider.
Where do medical coders work?
You may assume you know the answer to this question — hospitals, of
course! But there are several other settings a medical coder might work. The
simple answer is that these professionals are employed anywhere that
provides medical services. This includes hospitals, clinics, urgent care
facilities, nursing homes, treatment centers and more.
Some insurance agencies also employ medical coders to handle patient
claims from the other side of the table, verifying the accuracy of incoming
claims. Speaking of accuracy, some medical coders are hired by law firms to
help identify billing fraud.

What are some qualities that successful medical coders share?

There is no “typical” prototype when it comes to medical coders. You’ll find
men and women, young and old, single and married. But good medical
coders do share some common characteristics that help them on the job.
One critical trait is a high ethical standard because the patient data they
work with is highly confidential.
Medical coders must also have a keen eye for detail, as one miniscule
mistake in a code could lead to much larger issues. They also must be able
to remain focused because their work is rather repetitive, yet extremely
important.

What are some important skills medical coders need?

There are a handful of technical skills medical coders need to succeed in the
field, but transferable skills are important as well. We used real-time job
analysis software to examine more than 125,000 medical coding job postings
from the past year. The data revealed the most important skills employers
are seeking.
Here’s what we found:

If you can relate to a few of the skills on the right, you may be a natural fit
for a career as a medical coder. Don’t be intimidated by the list on the left —
those are precisely the skills you’ll acquire from formal training.

How do you become a medical coder?

Becoming a medical coder requires specialized training and certification. It’s
not a job just anyone can perform. But that’s what makes medical coders
valued professionals in the world of healthcare.

Although training is essential, the time it will take is significantly less than
other healthcare professions. Many medical coding programs can be
completed online in as few as nine months. This fast and flexible option
means aspiring medical coders can fit this training into their busy schedules.
It’s an ideal pathway for working adults with financial and family obligations.

Upon completing a medical coding program, the next step is to take the CCA
(Certified Coding Associate) or CCS (Certified Coding Specialist) exams
offered by the American Health Information Management Association
(AHIMA). This step is not always required but is typically favored by
employers.
 Education and Training is
Required to Become a Medical
Coder
What Education and Training Is Required to Become a Medical
Coder?
Earning a bachelor’s degree or master’s degree can strengthen a medical
coder’s career; however, it’s not required to show proficiency. What is
necessary is to have a solid foundation of anatomy, physiology, and medical
terminology education, which can be obtained by earning the Certified
Professional Coder (CPC®) credential. It’s recommended for serious coders
to complete a medical coding course of study and pass an exam to designate
him or her as a CPC®. Employers know CPCs® are individuals who can
perform medical coding tasks with the utmost proficiency and excellence.

Working Conditions
Medical coders work in every type of healthcare facility, including doctor’s
offices, surgery centers, hospitals and healthcare systems. Some
experienced coders can work at home through an employer or as a contract
worker.

Coding requires extraordinary detail. The coder must carefully review the
patient’s chart to learn the diagnosis and itemize every service provided. If a
service is overlooked, the provider will not receive payment for it. If the
coder chooses the wrong code, the provider may have to return any excess
payment or face legal charges for overbilling.

Codes frequently change, so coding professionals must keep up to date on

new rules and interpretations. A solid understanding of medical terminology,
including anatomy, is also required.

Academic Requirements
Earning a bachelor’s degree or master’s degree can strengthen a medical
coder’s career; however, it’s not required to show proficiency. What is
necessary is to have a solid foundation of anatomy, physiology and medical
terminology education. If you want to pursue a career as a medical coder,
you should complete a medical coding course of study.

Training in coding skills is available at many community colleges and through

online learning centers. Most training programs can be completed in 18 to 24
months. AAPC, a credentialing body for medical coders, offers several
medical coding courses.
Your course of study should prepare you to take a certification exam to
become a certified professional coder. Certification lets employers know that
you understand coding rules and have demonstrated a high level of accuracy
in translating patient charts into correctly coded insurance bills. Coders with
less than two years’ experience receive a CPC-A (apprentice) designation
until their experience is complete. AAPC offers examinations for testing your
knowledge of coding for physician offices (CPC), outpatient facilities (CPC-H)
or payers (CPC-P).

Because coding is based on the nature of the medical services provided,

certification is available for specific medical specialties, including evaluation
and management, general surgery and obstetrics and gynecology.
Continuing education is required to maintain certified status.

What Type of Jobs Are Available in the Medical Coding Field?

Medical billing and coding are a growing field that offers employees many
great opportunities. However, to be successful in this field, you must be well-
qualified, such as being certified in your area of expertise. This is often
achieved through an accredited training program and test. Certification is
important because it shows employers that you are well-trained and serious
about the profession.

There are several types of jobs within the medical billing and coding field
that typically attract medical coders:
Medical billing clerk: This entry-level position combines customer service
with hands-on applications of medical billing principles. This position tents to
deal with customers more often than other positions in this field. While most
medical billing clerk positions can be obtained without certification, many
successful candidates have some type of administrative assistant training
from a vocational school.

Medical billing specialist: Most people who hold this type of position have
gained certification from the American Medical Billing Association. This is an
organization that administers standardized tests to gauge proficiency in the
field. Medical billing specialists tackle the more intricate tasks of evaluating
and administering billing policies. They are considered experts at identifying
problem areas with a practice’s billing procedures and improving them.

Medical coding specialist: Unlike a medical billing specialist, medical

coding specialists have a more specific focus to their jobs. They handle the
coding of bills for presentation to an insurance company or the government
for payment. Medical coding specialists often work under the supervision of a
medical billing specialist. However, some medical coding specialists manage
their own work and that of others. Medical coders are trained to understand
the variety of codes used to submit bills to insurance companies. Often,
people in this type of position have taken coursework in the area. In addition
to coursework, medical coding specialists are often certified in specific areas
of expertise.

Medical auditing specialist: This type of specialist checks on the validity

of coding and billing practice. The medical auditing specialist will need to
take a special certification exam, known as the CPMA® or Certified
Professional Medical Auditor exam, to show proficiency in the field. A
professional medical auditor oversees all the coding and billing that leaves
an office. The medical auditing specialist’s job is to look for mistakes.
Clinical data specialist: A clinical data specialist is also a type of auditor,
but one who focuses on computer-generated data that is used in the
practice. This person attempts to verify that all medical coding and billing
information given to the doctor, the medical coding specialists, and/or the
medical billing specialists is accurate

What is a Typical Day in the Life of a Medical Coder?

Have you ever wondered what a day in the life of a medical coder might look
like? Medical coders can work in a variety of settings. Because of this, their
individual workday may differ from someone else in the same position
depending on the size of facility, type of physician, type of specialty, and
more.

A medical coder usually begins the workday by reviewing the previous day’s
batch of patient notes for evaluation and coding. Coders also abstract other
key information from the documentation, including physician names, dates of
procedures, and other information. Many cases are simple to code. However,
coders occasionally encounter a difficult note requiring in-depth research to
code correctly.

Finally, the coder completes the chart and begins the next patient record.
This cycle of reading, note taking, assigning codes, and computer entry
repeat with each chart. Therefore, most of the a coder’s day is spent sitting
at a computer reading notes and enter data into a billing system or searching
for information to clarify the documentation in the notes correctly.

Is This a Good Career Option?

Medical Coding – also referred to as Medical Coding and Billing – is a great
career option for those who are interested in the healthcare field but prefer
minimal interaction with the public. Contrary to popular belief, medical
coding requires more than just memorizing codes; Medical Coders must also
understand anatomy, medical terminology, and disease processes. This is
why it’s so important for those who want to pursue a career in this field to
obtain proper medical coding training.

Medical Coder Job Description

Medical Coders review patient medical records and assign codes to
diagnoses and procedures performed. These codes are used to bill insurance
and other third-party payers, as well as the patient. Medical Coders consult
classification manuals and rely on their knowledge of disease processes to
obtain the correct codes. They then use computer software to assign the
patient to one of numerous diagnosis-related groups, or DRGs. The DRG
system is used to determine the amount the hospital will be reimbursed if
the patient is covered by Medicare or other insurance programs. Some
coders are required to use other types of coding systems in addition to the
DRG system, such as those geared toward long-term care or ambulatory
settings. Medical Coding professionals must have an in-depth understanding
of medical terminology and receive thorough medical coding training to be
qualified for this position.

Medical Coder Education and Training

A minimum of an associate degree is typically required for the Medical Coder
position. Coursework in the Medical Coder degree program typically includes
medical terminology, medical insurance and billing, computer software
applications in healthcare, and ICD-10 CM training. Many Medical Coders
enter the field as a Medical Records Clerk and work their way up to a Medical
Coder position.

Medical Coder Work Environment

Medical Coders typically work in hospitals, physician’s offices, surgery
centers, long-term care facilities, nursing homes, dental offices, home health
care agencies, and mental health facilities. Medical Coding professionals
work behind-the-scenes and have minimal contact with the public or
patients, making this career a great choice for those who prefer a
background role within the healthcare setting. In fact, Medical Coding is one
of the few positions in the healthcare industry that requires minimal contact
with the public. People in this role typically work full-time and spend most of
their day at a desk in front of a computer.

Medical Coding Salary and Job Growth

Due to recent changes in the healthcare system, Medical Coders are in
higher demand than ever. According to the Bureau of Labor Statistics, the
number of Medical Coding jobs is expected to grow 22% from 2012 to 2022 –
much faster than average. Additionally, healthcare providers in the United
States face a deadline to achieve compliance with a nationwide conversion
to ICD-10 code sets by October 2014. BLS reports that the average salary for
those who work in Medical Coding is $34,160 per year, with an average
salary of $42,270 in California. Medical Coders can advance in their field one
of two ways: by specializing or managing. Areas of specialty include
Medicare coding and cancer registry. In larger health information
departments, Medical Coders can work their way up to department manager
where they oversee other Medical Coders within the department.
 Challenging Aspects of Medical
Coding
Mastering Medical Coding is Not as Hard as You Think
There’s no denying that healthcare careers are complicated. Healthcare
professionals attempt to understand, interpret and diagnose problems in the
complex human body. Even a health information technician (HIT) career,
which doesn’t involve working directly with patients, requires a strong
understanding of the various codes assigned to different medical diagnoses.

There are several different careers in HIT to choose from. If you’re looking for
an in-demand option that you could launch with less than two years of
schooling, medical coding might be the perfect fit. But you can help but
wonder: Is medical coding hard?
Learning the ropes as a medical coder may not be a walk in the park, but it’s
not rocket science, either. We asked experts in the field to provide their
insights on the challenging aspects of mastering medical coding and what
may not be as hard as you think.

What exactly is medical coding?

Medical coding is a step in the medical billing process that assigns codes to
insurance claims from a patient visiting a healthcare facility. In simple terms,
whenever a patient goes to a clinic or hospital for any reason, the visit is
assigned specific medical codes to help track the reason for the visit.

This system of medical coding ensures that healthcare visits are categorized
correctly when it comes time to bill and process insurance claims. The
medical coder is the person responsible for allocating those specific medical
codes (CPT, ICD and HCPCS) to each claim.

Is medical coding hard?

“It is like learning a foreign language,” says Professor Bonnie Moore, RHIT
and HIT program coordinator at Rasmussen College. “What makes it difficult
is that there are three major coding systems and each of them is different.
So, you are learning three foreign languages.”

Learning a foreign language may seem daunting, but it’s not impossible.
Certain aspects take some trial and error, according to Meredith Kroll, clinic
coder at Ridgeview Medical Center.

“At times it was harder than I thought, particularly the E/M coding,” Kroll
says. But she emphasizes that the challenging parts of learning medical
coding are vital to later success on the job. “I think my job now is easier than
my coding schooling, which means I was well prepared for my new career.”
Kroll advises new coders to keep trying and asking questions about anything
that doesn’t make sense. “It will eventually click,” she says. “Once I actually
started working as a coder, I was really thankful for all the questions that I
asked while learning.”

What are the most challenging aspects of medical coding?

Human anatomy has a lot of gray areas, but medical coding is black and
white. It can be challenging to transform cloudy and complex medical
symptoms into clear, discernible codes.

“One of the most challenging parts of the job is just learning the quirks of the
computer system and how to get around them,” Kroll says. It takes diligence
and attention-to-detail to be a successful medical coder. Kroll explains she
kept thorough notes throughout her training and created her own set of
‘guidelines.’ Her company has already asked her to utilize her notes for
training future coders into their organization.

Another challenging aspect is keeping up with industry changes. Moore

points out that medical coding is in a constant state of flux. The changes in
governance and healthcare regulations all impact coding, and it is critical for
coding professionals to stay on top of these changes to avoid documenting
inaccurate information.

But these challenges are the reason medical coders are in such high
demand. The hunt for efficient and accurate coders is fierce! “That is why
there is more demand for educated and credentialed coders,” Moore
explains. “The good news is that the pay increases with the more experience
and credentialing you have.”

Can medical coding be fun?

Medical coding may be a challenge to learn at first, but that doesn’t mean it
can’t be a fun job in the long run. Many coders think of themselves as private
investigators trying to crack a case. “Coding and billing is all about being a
detective,” Moore says, adding that dissecting a patient’s medical record and
even learning to read the medical records can be quite enjoyable.

“The daily work can be very entertaining,” Kroll says. “There are boring
parts, like any job, but I try to mix up my tasks so I’m not doing the same
thing all day long.” Kroll enjoys digging through provider documentation. “It’s
like a treasure hunt to look for the things I need to be able to code.”

And of course, coders get to see plenty of interesting medical stories coming
across their desks. “It’s very interesting to read some of the reasons that
people come into the clinic—what kids have stuck in their ears or noses, or
the stories behind people’s sprained ankles,” Kroll adds.
Medical coding also isn’t as isolating as people may think. Kroll has met all
the primary doctors she codes for and enjoys communicating with coworkers
throughout the day. “I have found that most people who work in this field are
fun and great to work with,” Moore concludes.

Some tips for success in medical coding

Medical coders are responsible for learning lots of information, and this job is
not for everyone, according to Moore. It takes self-motivation, focus, and
diligence to make it as a medical coder.

If you think you’ve got what it takes, these top tips from our experts will help
you achieve success in your coding studies:
 Enhance your learning with flashcards, note-taking, online quizzes and
other supplemental educational materials. Practice and deep
understanding is essential to the job.
 Make sure you grasp what you are learning. The bare minimum won’t
be enough to pass the certification exam. Commit to keeping current
with changes in the industry. To be successful in this field, you’ll have
to be a lifelong learner.

When you are sure that you understand something, read it one more time.
This will ensure that you’ve retained your new knowledge and have a deeper
understanding of the material.
Study and review daily. This will help you translate information from your
short-term memory to the long term.

Mastering medical coding can be done

If you’re willing to put in some work at the front end, you can overcome the
challenges of medical coding. Your reward for all that work is a satisfying
healthcare career that is critical to medical facilities. “The schooling isn’t
easy, but it is well worth it in the long run,” Kroll says.

By putting in the work to learn the “foreign language” of medical coding, you
could be setting yourself up for the career of your dreams. “Becoming a
coder is a great career choice that offers a lot of flexibility in schedule and
location,” Kroll explains. “I just started my first coding position two months
ago and am already working from home, setting my own hours and earning a
decent wage.”

Is medical coding right for you?

Medical coding may not be simple, but it’s not impossible. Earning a medical
coding degree is a worthwhile step to teach you the ropes of medical coding
and prepare you for the job market.
With all the changes in the healthcare world, medical coders are in high
demand and the job opportunities are expected to continue growing faster
than average.
 Different Types of Codes
Medical coding is a little bit like a translation. Coders take medical reports
from doctors, which may include a patient’s condition, the doctor’s diagnosis,
a prescription, and whatever procedures the doctor or healthcare provider
performed on the patient, and turn that into a set of codes, which make up a
crucial part of the medical claim.

WHY WE CODE
Let’s start with a simple question about medical coding: Why do we code
medical reports? Wouldn’t it be enough to list the symptoms, diagnoses, and
procedures, send them to an insurance company, and wait to hear which
services will be reimbursed?

To answer that, we must look at the massive amount of data that every
patient visit entails. If you go into the doctor with a sore throat and present
the doctor with symptoms like a fever, sore throat, and enlarged lymph
nodes, these will be recorded, along with the procedures the doctor performs
and the medicine the doctor prescribes.

In a straightforward case like this, the doctor will only officially report his
diagnosis, but that still means the portion of that report that will be coded
contains a diagnosis, a procedure, and a prescription.

Take a step back, and this is suddenly a lot of very specific information. And
that’s just for a relatively simple doctor’s visit. What happens when a patient
comes into the doctor with a complicated injury or sickness, like an ocular
impairment related to their Type-2 diabetes? As injuries, conditions, and
illnesses get more complex, the amount of data that needs to be conveyed
to insurance companies increases significantly.

According to the Centers for Disease Control (CDC), there were over 1.4
billion patient visits in the past year. That’s a stat that includes visits to
physician offices, hospital outpatient facilities and emergency rooms. If there
were just five pieces of coded information per visit, which is an almost
unrealistically low estimate, that’d be 6 billion individual pieces of
information that needs to be transferred every year. In a system loaded with
data, medical coding allows for the efficient transfer of huge amounts of
information.

Coding also allows for uniform documentation between medical facilities. The
code for streptococcal sore throat is the same in Arkansas as it is in Hawaii.
Having uniform data allows for efficient research and analysis, which
government and health agencies use to track health trends much more
efficiently. If the CDC, for example, wants to analyze the prevalence of viral
pneumonia, they can search for the number of recent pneumonia diagnoses
by looking for the ICD-10-CM code.

Finally, coding allows administrations to look at the prevalence and

effectiveness of treatment in their facility. This is especially important to
large medical facilities like hospitals. Like government agencies tracking,
say, the incidence of a certain disease, medical facilities can track the
efficiency of their practice by analyzing.

Now that we understand the importance of this practice, let’s look at the
three types of code that you’ll have to become familiar with as a medical
coder.

THREE TYPES OF CODE YOU’LL HAVE TO KNOW

There are three sets of code you’ll use on a daily basis as a medical coder.
ICD
The first of these is the International Classification of Diseases, or ICD codes.
These are diagnostic codes that create a uniform vocabulary for describing
the causes of injury, illness and death. This code set was established by the
World Health Organization (WHO) in the late 1940s. It’s been updated
several times in the 60-plus years since its inception. The number following
“ICD” represents which revision of the code is in use.

For example, the code that’s currently in use in the United States is ICD-10-
CM. This means it’s the 10th revision of the ICD code. That “-CM” at the end
stands for “clinical modification.” So the technical name for this code is the
International Classification of Diseases, Tenth Revision, Clinical Modification.
The clinical modification is a set of revisions put in place by the National
Center for Health Statistics (NCHS), which is a division of the Center for
Medicare and Medicaid Studies (CMS).

The Clinical Modification significantly increases the number of codes for

diagnoses. This increased scope gives coders much more flexibility and
specificity, which is essential for the profession. To give you an idea of how
important the clinical modification is, the ICD-10 code has 14,000 codes. Its
clinical modification, ICD-10-CM, contains over 68,000.

ICD codes are used to represent a doctor’s diagnosis and the patient’s
condition. In the billing process, these codes are used to determine medical
necessity. Coders must make sure the procedure they are billing for makes
sense with the diagnosis given. To return to our strep throat example, if a
coder listed a strep throat diagnosis as the medical justification for an x-ray,
that claim would likely be rejected.
Let’s turn our attention now to the two types of procedure codes.

CPT
Current Procedure Terminology, or CPT, codes, are used to document the
majority of the medical procedures performed in a physician’s office. This
code set is published and maintained by the American Medical Association
(AMA). These codes are copyrighted by the AMA and are updated annually.

CPT codes are five-digit numeric codes that are divided into three categories.
The first category is used most often, and it is divided into six ranges. These
ranges correspond to six major medical fields: Evaluation and Management,
Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine.

The second category of CPT codes corresponds to performance

measurement and, in some cases, laboratory or radiology test results. These
five-digit, alphanumeric codes are typically added to the end of a Category I
CPT code with a hyphen.

Category II codes are optional and may not be used in the place of Category I
codes. These codes are useful for other physicians and health professionals,
and the AMA anticipates that Category II codes will reduce the administrative
burden on physicians’ offices by providing them with more, and more
accurate, information, specifically related to the performance of health
professionals and health facilities.

The third category of CPT codes corresponds to emerging medical

technology.
As a coder, you’ll spend most of your time with the first two categories,
though the first will undoubtedly be more common.

CPT codes also have addendums that increase the specificity and accuracy of
the code used. Since many medical procedures require a finer level of detail
than the basic Category I CPT code offers, the AMA has developed a set of
CPT modifiers. These are two-digit numeric or alphanumeric codes that are
added to the end of the Category I CPT code. CPT modifiers provide
important additional information to the procedure code. For instance, there is
a CPT modifier that describes which side of the body a procedure is
performed on, and there’s also a code for a discontinued procedure.

HCPCS
Healthcare Common Procedure Coding System (HCPCS) commonly
pronounced as “hick picks,” are a set of codes based on CPT codes.
Developed by the CMS (the same organization that developed CPT), and
maintained by the AMA, HCPCS codes primarily correspond to services,
procedures, and equipment not covered by CPT codes. This includes durable
medical equipment, prosthetics, ambulance rides, and certain drugs and
medicines.
HCPCS is also the official code set for outpatient hospital care, chemotherapy
drugs, Medicaid, and Medicare, among other services. Since HCPCS codes
are involved in Medicaid and Medicare, it’s one of the most important code a
medical coder can use.
The HCPCS code set is divided into two levels. The first of these levels is
identical to the CPT codes that we covered earlier.

Level II is a set of alphanumeric codes that is divided into 17 sections, each

based on an area of specificity, like Medical and Laboratory or Rehabilitative
Services.
Like CPT codes, each HCPCS code should correspond with a diagnostic code
that justifies the medical procedure. It’s the coders responsibility to make
sure whatever outpatient procedure is detailed in the doctor’s report makes
sense with the listed diagnosis, typically described via an ICD code.

ICD-10-CM
LAYOUT AND ORGANIZATION
ICD-10-CM is a seven-character, alphanumeric code. Each code begins with a
letter, and that letter is followed by two numbers. The first three characters
of ICD-10-CM are the “category.” The category describes the general type of
the injury or disease. The category is followed by a decimal point and the
subcategory. This is followed by up to two subclassifications, which further
explain the cause, manifestation, location, severity, and type of injury or
disease. The last character is the extension.
The extension describes the type of encounter this is. That is, if this is the
first time a health care provider has seen the patient for this
condition/injury/disease, it’s listed as the “initial encounter.” Every encounter
after the first is listed as a “subsequent encounter.” Patient visits related to
the effects of a previous injury or disease are listed with the term “sequela.”
To review: the first digit of an ICD-10-CM code is always an alpha, the second
digit is always numeric, and digits three through seven may be alpha or
numeric. Here’s a simplified look at ICD-10-CM’s format.
A01 – {Disease}
A01.0 {Disease] of the lungs
A01.01 … simple
A01.02 … complex
A01.020 … affecting the trachea
A01.021 … affecting the cardiopulmonary system
A01.021A … initial encounter
A01.021D … subsequent encounter
A01.021S … sequela
The ICD-10-CM code manual is divided into three volumes. Volume I is the
tabular index. Volume II is, again, the alphabetic index. Volume III lists
procedure codes that are only used by hospitals. (We won’t be covering ICD-
10-CM Volume III codes in these courses).
ICD-10-CM is divided into ranges based on the type of injury or disease they
document.
Below, we’ve provided an example to show the levels of detail to which ICD-
10 codes can go.
As you can clearly see, ICD-10-CM allows coders to code to a high level of
specificity. ICD-10-CM also documents laterality—which side the injury or
infection is on—and substantially increases the amount of information about
the diagnosis.
CONVENTIONS
Aside from its format and organization, ICD-10-CM makes use of a number of
conventions that help guide the coder to correct diagnosis codes. Some of
these conventions include:
 Brackets [ ]
 Parentheses ( )
 “Includes”
 “Excludes”
There is a slight variation here: ICD-10-CM includes two types of “Excludes”
conventions
 Excludes1: lists codes that should never be coded with the code listed
above. You can think of this as a “hard excludes.”
 Excludes2: lists other codes for conditions/injuries that may be a part
of the condition, but are not included here. This is more of a “soft
excludes.” An Excludes2 note functions similarly to a “See Also” note
“Code first”
“Use Additional Code”
“In Disease Elsewhere Classified”
“See”
“See Also”
“Not Elsewhere Classified”
“Not Otherwise Specified”
ICD-10-CM’s Excludes notes have been divided into two ‘levels.’ Excludes1
informs coders that the codes listed in the note may not, in any
circumstance, be listed with the code that contains the Excludes1 note. For
example, you might find something that looks like this:
A12 {Disease} A
Excludes1
{disease} B, {disease} C
The conditions listed in an Excludes1 note are mutually exclusive with the
main condition the coder is looking up. An Excludes1 note informs the coder
that if the code they are looking up is in the Excludes1 note, the coder
cannot, under any circumstances, use the code that houses the note. That is,
if a medical coder is looking for {disease} B, but thinks the code for
{disease} A would be appropriate, the Excludes1 note would direct her to
look elsewhere besides {disease} A.
Excludes2 is the other Excludes note. An Excludes2 note indicates that the
code above the note does not include the other conditions listed below the
note. Let’s take another look at our simplified example.
A12 {Disease} D
Excludes2
{disease} E, {disease} F
This Excludes2 note means that while Diseases E and F might be pertinent to
or related to Disease D, they’re not found in the same code as Disease D.
Unlike Excludes1, you can code conditions found in an Excludes2 note with
the condition above the note. You can think of Excludes2 as sort of like “See
Also,” while an Excludes1 note is more like a “See” note.

ICD-10-CM has another important convention that has to do with the code’s
extensions. Remember, extensions typically provide information what
encounter this is for the healthcare provider with the patient. These are not
always included, but in the case that they are, they cannot simply be
appended to the end of whatever code is attached. Extensions are only
found in the seventh character of an ICD-10-CM code.
If a coder has to include an extension for an initial encounter on a code that
does not have six characters, they must add placeholder characters. Coders
use an ‘X’ for the placeholder digit.

If, for example, a coder needs to code an instance of poisoning by

unintentional under dosing of antibiotic penicillin, the coder would use
T36.0X1A. In this case, the fifth digit is empty, and so we’d use the
placeholder character ‘X.’ Remember that placeholder characters are only
used when an extension is necessary. Most ICD-10 codes do not include an
extension for the encounter.
HOW TO USE ICD-10-CM
The coding process begins with the analysis and abstraction of a medical
report. Using their notes from the report, the coder may go straight to the
tabular section or may refer to the alphabetic section to find the correct
code, and then confirm it in the tabular.
Let’s take a look at an example.

Patient is 44-year-old Caucasian male. Self reported height and weight 1.8m
and 80 kg. No notable medical history.
Patient presents with a red rash around the nose and labial folds. Some
yellowish-reddish pimples. Patient complains of itching and flaking skin.
Patient says rash emerged two months ago but then subsided. Diagnosed
patient with seborrheic dermatitis and prescribed a topical antifungal
medication.

In order to code this relatively straightforward visit, the coder would first
abstract the information in the doctor’s report. The patient shows one very
specific symptom (a rash on the face), and the doctor is able to make a
positive diagnosis: seborrheic dermatitis.
The coder could look this up in the alphabetic index, or turn to the section in
the tabular index for diseases of the skin or subcutaneous tissue: L00-L99.
From there the coder would look for dermatitis and eczema and find L21:
“seborrheic dermatitis.”

Underneath that category we’d find four subcategories. We’d select the one
that best describes the condition diagnosed by the physician, which in this
case would be L21.9, “Seborrheic dermatitis, unspecified.” We use
“unspecified” here because the other codes for seborrheic dermatitis pertain
either to infants or describe an “other” seborrheic dermatitis. In this case,
“unspecified” is our best option.
Let’s look at the tree of codes for this diagnosis code.
L00-L99 – DISEASES OF THE SKIN AND SUBCUTANEOUS TISSUE
L21 – Seborrheic Dermatitis
 L21.0 – Seborrhea capitis
 L21.1 – Seborrheic infantile dermatitis
 L21.8 – Other seborrheic dermatitis
  L21.9 – Seborrheic dermatitis, unspecified
You’ll note that this ICD-10-CM code doesn’t have any subclassifications or
extensions. Remember, not all codes need to go to the level of specificity
that ICD-10-CM provides. In this case, the fourth digit is all that’s needed to
describe the diagnosis.

FURTHER EXPLORATIONS
Let’s look at another example, this time an injury. Injuries often have
extensions that document the encounter because the stage of treatment
(whether it has not been treated, as in an initial encounter, or has already
received treatment, as in a subsequent encounter) can greatly impact the
medical necessity on a claim.

“Patient presents with bruising and a swollen nose and cheek after contact in
a rugby match. Patient has not lost consciousness. Examination shows no
rupture of the skin on the face. X-rays confirm a type II Le Fort fracture [a Le
Fort fracture is one of three fractures of the bones in the face, including
fractures the lower and mid maxillary bones and the zygomatic arch/cheek
bone].”

We know right off the bat that this is an injury code, so we can start
searching in the ICD-10-CM injury codes, found in S00-T88: “Injury, poisoning
and certain other consequences of external causes.” From there we’d
winnow our search to S00- S09, “Injuries to the head.”
Within that subfield of codes, we’d find S02, “fracture of the skull and facial
bones.” We could also go about this by looking up a Le Fort fracture in the
alphabetic index. As mentioned in the note above, a Le Fort fracture can be
one of three fractures to the facial bones and skull. According to the medical
report, we’re looking for a Type II Le Fort fracture.
Below S02, we’d find a number of subcategories, including codes for
fractures of the vault and base of the skull, fractures of the nasal bones, and
fractures of the orbital floor. We’re looking for a very specific type of fracture,
however, one that involves the maxillary and zygoma bones of the face.
Thankfully, there’s a specific subcategory for this: S02.4, “fracture of the
malar, maxillary and zygoma bones.”

Once in this subcategory, we’d find a subclassification for Le Fort fractures

(S02.4), and then three more subclassifications for each type of Le Fort
fracture (S02.41). We’d select the code for our Type II Le Fort fracture:
S02.412. Since this is the doctor’s first encounter with this injury, we’d use
the initial encounter extension ‘A,’ and would end up with: S02.412A, “Le
Fort type II fracture, closed, initial encounter.”
Now let’s look at the code tree to see how we got there.

S00-T88 – INJURIES, POISONINGS AND CERTAIN OTHER

CONSEQUENCES OF EXTERNAL CAUSES
  S02 – Fracture of skull and facial bones
 S02.0 – Fracture of vault of skull
 S02.1 – Fracture of base of skull
 S02.2 – Fracture of nasal bones
 S02.4 – Fracture of malar, maxillary and zygoma bones
 S02.40 – Fracture of malar, maxillary and zygoma bones, unspecified
 S02.41 – Le Fort fracture

S02.411 Le Fort I fracture
S02.412 Le Fort II fracture
S02.412A – … initial encounter for closed fracture
S02.412B – … initial encounter for open fracture
S02.412D – … subsequent encounter for fracture with routine healing
Etc.

HOW TO USE ICD-10-CM

The medical coder should approach ICD-10-CM in the exact same way as
ICD-9-CM. The coding process again begins with the analysis and abstraction
of a medical report. Using their notes from the report, the coder may go
straight to the tabular section or may refer to the alphabetic section to find
the correct code, and then confirm it in the tabular.
Let’s take a look at an example.
Patient is 44-year-old Caucasian male. Self reported height and weight 1.8m
and 80 kg. No notable medical history.
Patient presents with a red rash around the nose and labial folds. Some
yellowish-reddish pimples. Patient complains of itching and flaking skin.
Patient says rash emerged two months ago but then subsided. Diagnosed
patient with suborrheic dermatitis and prescribed a topical antifungal
medication.
In order to code this relatively straightforward visit, the coder would first
abstract the information in the doctor’s report. The patient shows one very
specific symptom (a rash on the face), and the doctor is able to make a
positive diagnosis: suborrheic dermatitis.
The coder could look this up in the alphabetic index, or turn to the section in
the tabular index for diseases of the skin or subcutaneous tissue: L00-L99.
From there the coder would look for dermatitis and eczema and find L21:
“seborrheic dermatitis.”
Underneath that category we’d find four subcategories. We’d select the one
that best describes the condition diagnosed by the physician, which in this
case would be L21.9, “Seborrheic dermatitis, unspecified.” We use
“unspecified” here because the other codes for seborrheic dermatitis pertain
either to infants or describe an “other” serborrheic dermatitis. In this case,
“unspecified” is our best option.
Let’s look at the tree of codes for this diagnosis code.
L00-L99 – DISEASES OF THE SKIN AND SUBCUTANEOUS TISSUE
L21 – Seborrheic Dermatitis
  L21.0 – Seborrhea capitis
 L21.1 – Seborrheic infantile dermatitis
 L21.8 – Other seborrheic dermatitis
 L21.9 – Seborrheic dermatitis, unspecified
You’ll note that this ICD-10-CM code doesn’t have any subclassifications or
extensions. Remember, not all codes need to go to the level of specificity
that ICD-10-CM provides. In this case, the fourth digit is all that’s needed to
describe the diagnosis.
FURTHER EXPLORATIONS
Let’s look at another example, this time an injury. Injuries often have
extensions that document the encounter because the stage of treatment
(whether it has not been treated, as in an initial encounter, or has already
received treatment, as in a subsequent encounter) can greatly impact the
medical necessity on a claim.
“Patient presents with bruising and a swollen nose and cheek after contact in
a rugby match. Patient has not lost consciousness. Examination shows no
rupture of the skin on the face. X-rays confirm a type II Le Fort fracture [a Le
Fort fracture is one of three fractures of the bones in the face, including
fractures the lower and mid maxillary bones and the zygomatic arch/cheek
bone].”
We know right off the bat that this is an injury code, so we can start
searching in the ICD-10-CM injury codes, found in S00-T88: “Injury, poisoning
and certain other consequences of external causes.” From there we’d
winnow our search to S00- S09, “Injuries to the head.”
Within that subfield of codes, we’d find S02, “fracture of the skull and facial
bones.” We could also go about this by looking up a Le Fort fracture in the
alphabetic index. As mentioned in the note above, a Le Fort fracture can be
one of three fractures to the facial bones and skull. According to the medical
report, we’re looking for a Type II Le Fort fracture.
Below S02, we’d find a number of subcategories, including codes for
fractures of the vault and base of the skull, fractures of the nasal bones, and
fractures of the orbital floor. We’re looking for a very specific type of fracture,
however, one that involves the maxillary and zygoma bones of the face.
Thankfully, there’s a specific subcategory for this: S02.4, “fracture of the
malar, maxillary and zygoma bones.”
Once in this subcategory, we’d find a subclassification for Le Fort fractures
(S02.4), and then three more subclassifications for each type of Le Fort
fracture (S02.41). We’d select the code for our Type II Le Fort fracture:
S02.412. Since this is the doctor’s first encounter with this injury, we’d use
the initial encounter extension ‘A,’ and would end up with: S02.412A, “Le
Fort type II fracture, closed, initial encounter.”
Now let’s look at the code tree to see how we got there.

S00-T88 – INJURIES, POISONINGS AND CERTAIN OTHER

CONSEQUENCES OF EXTERNAL CAUSES
 S02 – Fracture of skull and facial bones
  S02.0 – Fracture of vault of skull
 S02.1 – Fracture of base of skull
 S02.2 – Fracture of nasal bones
 S02.4 – Fracture of malar, maxillary and zygoma bones
 S02.40 – Fracture of malar, maxillary and zygoma bones, unspecified
 S02.41 – Le Fort fracture
S02.411 Le Fort I fracture
S02.412 Le Fort II fracture
S02.412A – … initial encounter for closed fracture
S02.412B – … initial encounter for open fracture
S02.412D – … subsequent encounter for fracture with routine healing
Etc.
As you can see, navigating ICD-10-CM is both similar to and different from
using ICD-9-CM. Because ICD-10-CM provides a much higher number of
specific codes, coders must be more accurate when reading and abstracting
medical reports. ICD-10-CM, for instance, includes laterality in the code set—
that is, what side the disease or injury occurs on. Information like this will be
in the medical report, and so it’s simply up to the coder to get every last bit
of pertinent information from the medical report.
CONVENTIONS
Like ICD-9-CM, ICD-10-CM makes use of a number of conventions that help
guide the coder to correct diagnosis codes. Most of these conventions, as we
mentioned in the last course, are the same in both code sets, and so we
won’t rehash them here. ICD-10-CM does have one significant upgrade,
however, and it comes in the “Excludes” convention.
ICD-10-CM’s Excludes notes have been divided into two ‘levels.’ Excludes1
informs coders that the codes listed in the note may not, in any
circumstance, be listed with the code that contains the Excludes1 note. For
example, you might find something that looks like this:
A12 {Disease} A
Excludes1
{disease} B, {disease} C
The conditions listed in an Excludes1 note are mutually exclusive with the
main condition the coder is looking up. An Excludes1 note informs the coder
that if the code they are looking up is in the Excludes1 note, the coder
cannot, under any circumstances, use the code that houses the note. That is,
if a medical coder is looking for {disease} B, but thinks the code for
{disease} A would be appropriate, the Excludes1 note would direct her to
look elsewhere besides {disease} A.
Excludes2 is the other new Excludes note. An Excludes2 note indicates that
the code above the note does not include the other conditions listed below
the note. Let’s take another look at our simplified example.
A12 {Disease} D
Excludes2
{disease} E, {disease} F
This Excludes2 note means that while Diseases E and F might be pertinent to
or related to Disease D, they’re not found in the same code as Disease D.
Unlike Excludes1, you can code conditions found in an Excludes2 note with
the condition above the note. You can think of Excludes2 as sort of like “See
Also,” while an Excludes1 note is more like a “See” note.
The upgrade from ICD-9-CM to ICD-10-CM is set for October 1, 2015. In the
meantime, coders across the country are learning how to use this new large
code set. We’ll cover that process, and the process of transitioning codes
from ICD-9-CM to ICD-10-CM, in Course 2-13. For now, we’re going to move
on to procedure codes.
 Introduction to CPT Coding
Earlier, we introduced you to Current Procedural Terminology, or CPT. This
expansive, important code set is published and maintained by the American
Medical Association (AMA), and it is, with ICD, one of the most important
code sets for medical coders to become familiar with. Note also that all the
codes featured in this course, and every course that touches on CPT codes,
are copyrighted by the AMA.
CPT codes are used to describe tests, surgeries, evaluations, and any other
medical procedure performed by a healthcare provider on a patient. As you
might imagine, this code set is extremely large, and includes the codes for
thousands upon thousands of medical procedures.
CPT codes are an integral part of the billing process. CPT codes tell the
insurance payer what procedures the healthcare provider would like to be
reimbursed for. As such, CPT codes work in tandem with ICD codes to create
a full picture of the medical process for the payer. “This patient arrived with
these symptoms (as represented by the ICD code) and we performed these
procedures (represented by the CPT code).
Like ICD codes, CPT codes are also used to track important health data and
measure performance and efficiency. Government agencies can use CPT
codes to track the prevalence and value of certain procedures, and hospitals
may use CPT codes to evaluate the efficiency and abilities of individuals or
divisions within their facility.
FORMAT
Let’s look a little closer at what these codes look like and how they’re
organized. Each CPT code is five characters long, and may be numeric or
alphanumeric, depending on which category the CPT code is in. Don’t
confuse this with the ‘category’ in ICD. Remember that in ICD codes the
‘category’ refers to the first three characters of the code, which describe the
injury or disease documented by the healthcare provider.
With CPT, ‘Category’ refers to the division of the code set. CPT codes are
divided into three Categories. Category I is the most common and widely
used set of codes within CPT. It describes most of the procedures performed
by healthcare providers in inpatient and outpatient offices and hospitals.
Category II codes are supplemental tracking codes used primarily for
performance management. Category III codes are temporary codes that
describe emerging and experimental technologies, services, and procedures.
Note that while CPT codes have five digits, there are not 99,000-plus codes.
CPT is designed for flexibility and revision, and so there is often a lot of
“space” between codes. Unlike ICD, each number in the CPT code does not
correspond to a particular procedure or technology.
Here’s a closer look at the three categories of CPT codes.
CATEGORY I
Medical coders will spend the vast majority of their time working with
Category I CPT codes. For the sake of simplicity, we’ll refer to the CPT
codebook when we’re describing the code set. This book, which is updated
yearly by the AMA and the CPT Editorial Board, is an essential tool for every
medical coder. In the next few minutes, you’ll learn the basic layout, format,
and instructions found in the CPT codebook.
Like the ICD code set and its division into chapters by type of injury or
illness, Category I CPT codes are divided into six large sections based on
which field of health care they directly pertain to. The six sections of the CPT
codebook are, in order:
 Evaluation and Management
 Anesthesiology
 Surgery
 Radiology
 Pathology and Laboratory
 Medicine
CPT codes are, for the most part, grouped numerically. The codes for surgery,
for example, are 10021 through 69990.
In the CPT codebook, these codes are listed in mostly numerical order,
except for the codes for Evaluation and Management. These Evaluation and
Management, or E&M, codes are listed at the front of the codebook for ease
of access. Physician’s offices frequently use E&M codes for reporting a
number of their services. The code 99214, for a general checkup, is listed in
the E&M codes, for example.
Note also that some codes appear out of numerical sequence but near
similar procedures. This may seems slightly confusing, but having these
codes clustered near similar procedures prevents having to delete and
resequencing codes, and so is seen as a sort of necessary evil.
Here’s a quick look at the sections of Category I CPT codes, as arranged by
their numerical range.
 Evaluation and Management: 99201 – 99499
 Anesthesia: 00100 – 01999; 99100 – 99140
 Surgery: 10021 – 69990
 Radiology: 70010 – 79999
 Pathology and Laboratory: 80047 – 89398
 Medicine: 90281 – 99199; 99500 – 99607
Within each of these code fields, there are subfields that correspond to how
that topic—say, Anesthesia—applies to a particular field of healthcare. For
instance, the Surgery section, which is by far the largest, is organized by
what part of the human body the surgery would be performed on. If you’d
like to learn more about the anatomy and physiology terms used in the
Surgery section. Likewise, the Radiology section is organized into sections on
diagnostic ultrasound, bone and joint studies, radiation oncology, and other
fields.
Each of these fields has its own particular guidelines when it comes to use.
For example, the Surgery section has a guideline for how to report extra
materials used (such as sterile trays or drugs) and how to report follow-up
care in the case of surgical procedures.
Like ICD codes, many CPT codes are arranged by indentation. If a procedure
is indented below another code, the indented procedure is an important or
noteworthy variation on the above procedure and would replace the first
code. Let’s take a look at an example of an indented code.
The code for “management of liver hemorrhage; simple suture of liver wound
or injury” is 47350.
It’s helpful to look at a code like this in two parts. The first, which comes
before the semicolon, is the general procedure. In this case, that’d be “liver
management.” The phrase that comes after the semicolon is additional,
specific information. In this example, we could read the code as “liver
management, with a simple suture of liver wound or injury.”
If, however, a doctor performed a more complicated procedure on a patient’s
liver, 47350 would no longer be the correct code to use. If we look in the CPT
manual, we find the code 47360 below 47350. Code 47360 reads “complex
suture of liver wound or injury, with or without hepatic artery ligation.” That
phrase is meant to take the place of the phrase that comes after the
semicolon in code 47350.
You could therefore read code 47360 as “liver management, with complex
suture of liver wound or injury, with or without hepatic artery ligation.”
CPT codes also have a number of modifiers. These modifiers are two-digit
additions to the CPT code that describe certain important facets of the
procedure, like whether the procedure was bilateral or was one of multiple
procedures performed at the same time. CPT modifiers are relatively
straightforward but are very important for coding accurately. For this reason,
we’ll cover them in a later video.
Like ICD codes, many CPT codes also have additional instructions featured
below the code. These instructions, which are in parentheses below the code
you’ve looked up, tell the coder that, in certain situations, another code
might be better suited than the present code. For now, just recognize that
the CPT code set has a number of instructions that inform the medical coder
on how to best code the procedure performed. Remember that you always
need to code to the highest level of specificity, and a miscoded procedure
can be the difference between an accepted and rejected claim.
The CPT code set also instructs coders on when to use multiple codes, when
to use codes in tandem with one another (add-on codes), and which codes
are “modifier exempt.”
This is an awful lot of information to take in regarding Category I CPT codes,
so let’s review briefly.
Category I CPT codes are numeric and are five digits long.
They are divided into six sections: Evaluation and Management, Anesthesia,
Surgery, Radiology, Pathology and Laboratory, and Medicine.
Each of these sections has its own subdivisions, which correspond to what
type of procedure, or what part of the body, that particular procedure relates
to.
The sections are grouped numerically, and, aside from Evaluation and
Management, are in numerical order. That is, the codes for Anesthesia come
before, or are “lower” than the codes for Pathology and Laboratory.
Each of these sections also has specific guidelines for how to use the codes
in that section.
Certain codes have related procedures indented below them. These indented
codes are important variations on the code above them, and denote different
methods, outcomes, or approaches to the same procedure. For example, the
code for the elevation of a simple, extradural depressed skull fracture is
62000. The code for the elevation of a compound or comminuted, extradural
depressed skull fracture is 62005.
There are a few important CPT Modifiers, which provide additional
information about the procedure performed. We’ll cover these in just a little
bit.
Some codes have instructions for coders below them. These instructions are
found in parentheses below the code, and they instruct the coder that there
may be another, more accurate code to use.
Now that we’ve given you a brief glimpse of Category I CPT codes, let’s take
a look at the next section of CPT.
CATEGORY II
These codes are five character-long, alphanumeric codes that provide
additional information to the Category I codes. These codes are formatted to
have four digits, followed by the character F. These codes are optional but
can provide important information that can be used in performance
management and future patient care.
Here’s a quick example. If a doctor records a patient’s Body Mass Index (BMI)
during a routine checkup, we could use Category II code 3008F, “Body Mass
Index (BMI), documented.”
These codes never replace Category I or Category III codes, and instead
simply provide extra information. They are divided into numerical fields, each
of which corresponds with a certain element of patient care.
Composite codes
These codes combine a number of procedures that typically occur in
conjunction with one main procedure.
Example: 0001F: heart failure assessed (includes all of the following):
 Blood pressure measured
 Level of activity assessed
 Clinical symptoms of volume overload assessed
 Weight recorded
 Clinical signs of volume overload assessed
Patient Management
 Includes patient care provided for specific clinical purposes like pre-
and postnatal care.
Example: 0503F: Postpartum care visit
Patient History
  Describes measures for select elements of patient history or symptom
review
Example: 1030F: Pneumococcus immunization status assessed
Physical Examination
Example: 2014F: Mental status assessed
Diagnostic/Screening Processes or Results
 Includes results of tests ordered, including clinical lab tests and
radiological procedures
Example: 3006F: Chest X-ray documented and reviewed
Therapeutic, Preventive, or Other Interventions
 Describes pharmacologic, procedural or behavioral therapies
Example: 4037F: influenza immunization ordered or administered
Follow-up or Other Outcomes
 These codes describe the review and communication of test results to
a patient, patient satisfaction, patient functional status, and patient
morbidity or mortality
Example: 5005F: patient counseled on self-examination for new or changing
moles
Patient Safety
 Includes codes that describe patient safety precautions
Example: 6015F: Patient receiving or eligible to receive foods, fluids, or
medication by mouth
Structural Measures
 This short section includes codes that describe the setting of the
delivered care, and also covers the capabilities of the healthcare
provider
Example: 7025F: patient information entered into a reminder system with a
target due date for the next mammogram
There are not nearly as many Category II CPT codes as there are in Category
I, and in general you will not use Category II nearly as much. Still, it is an
important element of the CPT code set, and you should be familiar with the
basics of Category II codes as you prepare for a career in the field.
CATEGORY III
The third category of CPT codes is made up of temporary codes that
represent emergent or experimental services, technology, and procedures. In
certain cases, you may find that a newer procedure does not have a
Category I code. There are codes in Category I for unlisted procedures, but if
the procedure, technology, or service is listed in Category III, you are
required to use the Category III code.
Category III codes allow for more specificity in coding, and they also help
health facilities and government agencies track the efficacy of new,
emergent medical techniques.
Think of Category III as codes that may become Category I codes, or that just
don’t fit in with Category I. Category I codes must be approved by the CPT
Editorial Panel. This Panel mandates that procedures or services must be
performed by a number of different facilities in different locations and that
the procedure is approved by the FDA. Due to the nature of emerging
medical technology and procedures, it’s not always possible for an
experimental procedure to meet these criteria, and thus become a Category I
code.
Whether a Category III code becomes a Category I code or not, all Category
III codes are archived in the CPT manual for five years. If at the end of this
five year period the code has not been converted to Category I, this
procedure must be marked with a Category I “unspecified procedure” code.
When flipping through the Category III section of the CPT manual, you’ll
notice that each of the codes has a phrase listing its sunset date below the
code. Think of the sunset dates as expiration dates on the code.
Like Category II, these codes are five characters long and are comprised of
four digits and a terminal letter. In this case, the last letter of Category III
codes is T. For example, the code for the fistulization of sclera for glaucoma,
through the ciliary body is 0123T.
Now that you have a better idea of what CPT looks like, how it’s formatted,
and when to use which category of codes, let’s dive a little deeper into
modifiers and how CPT codes look in action.

Using CPT
Let’s look at how to use CPT as a medical coder.
Remember, the CPT code is divided into three categories. Most coders spend
the majority of their time with Category I, which describes procedures,
services, and technologies administered by healthcare professionals.
Category I is divided into six sections, which are grouped, for the most part,
in numerical order. The sections are Evaluation and Management (E&M),
Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine.
These sections, except for E&M, are in loose numerical order, though you
may find some codes from one section referenced in another section.
When you’re coding, you first want to think about what kind of procedure
you’re looking at. Was it a patient visit? A surgical procedure? Did a physician
administer an X-ray? Did they prescribe medication to the patient? Using that
information, you can start looking at higher and higher levels of specificity.
Where on the patient’s body was the surgery performed? Where was the X-
ray?
As a coder, your job is to use this information to find the best possible code
for the procedure.
As with ICD codes, the process of procedure coding begins with a physician’s
report. The coder reads this report, makes notes of the important procedures
and terms used in the report, and then uses this information to determine
the best CPT code to input. Let’s take a look at a quick, simple example.
A patient breaks his arm and must go to the emergency room. His injury is
serious but is not a risk to the patient’s life or major physiological functions.
Leaving aside the other procedures that a physician would undoubtedly
perform in this situation, let’s look only at the hospital visit itself as a
procedure code.
We’d find the “Emergency Department Services” subsection and look at the
codes listed there. There are a number of codes for a trip to the ER, and so
we have to pick the one that fits our situation best. We’d select 99282 for an
“Emergency department visit” of “low to moderate severity.” There are
higher and lower levels of severity, but this code fits the visit best: the
patient has a moderately severe injury but is in no serious danger.
Like ICD codes, when coding with CPT we always want to code to the highest
level of specificity. We never want to stop coding at a CPT code that is simply
“close enough” to the procedure performed. In E&M situations, this may be a
bit of a judgment call, but as the procedures get more and more specific,
there is less room for interpretation.
Here’s a slightly more complicated example. A patient requires the biopsy of
a deep, intramuscular cyst in his elbow. This is a surgical procedure. This is
also a procedure related to the musculoskeletal system, which is the first
subsection of the Surgery section, so we’d flip toward the front of the
section. We’d locate the correct part of the body that the surgery is
performed on, the humerus (upper arm) and elbow.
From there we’d look at excision codes. The first one that comes up is the
excision of the soft tissue of the upper arm.
PARENT CODES
Now is a good time to recall something that we learned earlier. There are
indented, or parent codes, in the CPT book. Certain procedures, like the
excision of soft tissue for a biopsy in the upper arm, have important
variations. In our example, there are two options for this procedure: an
excision of soft tissue on the skin of the upper arm, and an excision of soft
tissue deep in the arm. The latter procedure is indented below the former.
The former is the parent code. The specification of the parent code comes
after a semi-colon and describes where the excision takes place.
When using the indented code, we’d replace what comes after the semicolon
with the procedure listed in the indented code.
Here’s the parent code: 24065 – Biopsy, soft tissue of the upper arm or elbow
area; superficial.
And here’s the code we want: 24066 – Biopsy, soft tissue of the upper arm or
elbow area; deep (subfascial or intramuscular).
So, we’d select the indented code (24066) and use that as the procedure
code for the biopsy on the cyst in our patient’s elbow.
In certain cases, you may find that the procedure you’ve been asked to code
cannot be found in the CPT code manual. Remember that we want to code as
accurate as possible at all times. In cases where a procedure has not yet
made its way into the CPT book, we use an unlisted procedure code and file
an additional report.
OUT OF ORDER CODES
Sometimes you may find procedure codes that are out of order in the code
manual. Placing codes out of numerical order allows for clustering of similar
procedures and can help the medical coder find exactly the right procedure
code. These out-of-sequence codes typically have a note instructing the
coder to flip to the correct code elsewhere in the book. Think of these out-of-
sequence codes as road signs.
GUIDELINES
The CPT codebook is full of guidelines. Each section of Category I has
guidelines specific to that section. The Anesthesia section, for example,
instructs coders on how to code the duration of the anesthetic procedure.
Many codes also have guidelines or instructions, and this is where the CPT
code set can get very complex. Certain procedures, like a “photodynamic
therapy of second eye” (code 67225), must be used in conjunction with
another procedure. In this case, code 67225 must be coded along with code
67221, for “photodynamic therapy (includes intravenous infusion).”
Other codes may instruct you not to report this code in conjunction with a
certain other code. Those procedures may contradict one another or overlap.
Some codes will also have instructions, listed in parentheses, that instruct
the coder to look elsewhere for a procedure. Let’s say a coder receives a
medical report that a patient had the ACL in his knee reconstructed during a
surgical procedure. That coder would turn to the Surgery section of the
codebook, then to the musculoskeletal subsection. The coder would find the
section on the femur and knee joint, and look at code 27407 – “repair,
primary, torn ligament and/or capsule, knee; cruciate.”
The coder would then look at the instructions below this code and see a
note: “For cruciate ligament reconstruction, use 27427.” The medical coder
needs to describe a reconstruction, not a repair, and so the first code—27407
—would be incorrect. The coder would go to 27427, check that it is the
correct procedure, and then use that code.
These guidelines and instructions may seem redundant, highly specific, or
needlessly complicated, but insurance companies need as much information
as possible in order to properly gauge the authority of a medical claim. When
in doubt, always follow the rules laid out by the CPT code set.
CODE SYMBOLS
In an effort to save space and save you from having to read tedious notes on
each and every code, the CPT Editorial Board has instituted a number of
symbols within the codebook. These symbols will tell you important
information about the code. Each codebook will have a key that explains
these symbols.
We won’t dive fully into all of these symbols, but you should know about a
few of the more common ones.
Part of the purpose of the code symbols included in the CPT manual is to tell
coders which codes are new, resequenced or revised procedure codes. The
new procedures are marked with a red dot. Heavily revised procedures are
marked with a blue triangle. New and revised procedure descriptions are
marked with green triangles.
These code symbols also illustrate which codes must be, or cannot be, used
in conjunctions with other codes. Certain codes are always paired with other
codes. These are called “add-on” codes and are noted with a boldfaced plus
sign. Other codes are incompatible with the -51 modifier and are marked
with a circle with a diagonal line through it. We’ll cover what a -51 modifier is
in the next section—or now, just know that a procedure marked like this
cannot be part of a “multiple procedure” report.
APPENDICES
When you’re using a code set as large and complicated as CPT, it helps to
have a place to turn to for information specific to certain parts of the code
set. The appendices at the back of the CPT manual allow you to search newly
added codes, CPT modifiers, and a list of CPT add-on codes.
INDEX
Finally, we come to the index. The CPT Index can be used like any other
index. You can use it to track down hard-to-code procedures, services, and
tests, and you can search it by both procedure and body part.
However, a trained medical coder never codes from the index. It is merely a
tool for finding the right information.
Let’s close this course with a quick example of a coder using the index the
right way.
A patient receives an X-ray of both their femoral arteries. The medical report
is passed to the coder. The coder knows this is a radiology code but isn’t sure
which procedure to code. She turns to the index and finds Artery, Femoral,
but can’t find the proper procedure. The coder is looking for the code for a
venography, which is an invasive procedure that uses a catheter filled with
dye, which is injected and traced through the body via X-ray.
The coder turns instead to Venography in the index and finds the code range
for venographies in the leg: 75820-75822. The coder turns to this section
and finds a number of venographies, each for a specific part of the body. The
coder chooses the first one, 75822, for a bilateral venography of the
extremities, with radiological supervision and interpretation.

CPT Modifiers
Since medical procedures and services are often complex, we sometimes
need to supply additional information when we’re coding. CPT Modifiers, like
modifiers in the English language, provide additional information about the
procedure. In English, a modifier may describe the who, what, how, why, or
where of a situation. Similarly, a CPT modifier may describe whether multiple
procedures were performed, why that procedure was necessary, where the
procedure was performed on the body, how many surgeons worked on the
patient, and lots of other information that may be critical to a claim’s status
with the insurance payer.
CPT Modifiers are always two characters and may be numeric or
alphanumeric. Most of the CPT modifiers you’ll see are numeric, but there
are a few alphanumeric Anesthesia modifiers that we’ll look at toward the
end of this course.
CPT modifiers are added to the end of a CPT code with a hyphen. In the case
of more than one modifier, you code the “functional” modifier first, and the
“informational” modifier second. The distinction between the two is simple:
you always want to list the modifiers that most directly affect the
reimbursement process first.
There’s a straightforward reason for this, too. While CMS-1500 and UB-04
forms, the two most common claim forms, have space for four modifiers,
payers don’t always look at modifiers after the first two. Because of this, you
always want the most important modifiers to be visible. We’ll return to this
point in a few examples after we examine the CPT modifiers.
Bear in mind that each of the CPT modifiers you’ll find in this course are A)
copyrighted by the American Medical Association (AMA) and B) contingent on
a number of factors and guidelines. In other words, there are rules for their
use. You can’t simply add a modifier to the end of a procedure code if you
think it makes sense. There are, for example, a number of modifiers that
state they are not compatible with Evaluation and Management (E&M) codes.
EXAMPLE
Let’s take a quick look at an example of a CPT modifier in action.
A surgeon performs a procedure to remove a bone cyst in the upper arm of a
patient. The procedure also includes obtaining a graft from elsewhere in the
body. Due to minor complications, the surgeon is unable to fully excise the
bone cyst.
For the procedure, we’d code 23140 for “excision or curretage of bone cyst
or benign tumor, humerus; with autograft (includes obtaining the graft).”
Since the procedure was completed but not fully successful, we’d add the -52
modifier, for reduced services, to the code, and we’d end up with 23140-52.
PHYSICAL STATUS MODIFIER (FOR ANESTHESIA)
Anesthesia procedures have their own special set of modifiers, which are
simple and correspond to the condition of the patient as the anesthesia is
administered. These codes are:
 P1 – a normal, healthy patient
 P2 – a patient with mild systemic disease
 P3 – a patient with severe systemic disease
 P4 – a patient with severe systemic disease that is a constant threat to
life
 P5 – a moribund patient who is not expected to survive without the
operation
 P6 – a declared brain-dead patient whose organs are being removed for
donor purposes
As we said, these are relatively straightforward, but let’s look at an example
that will also use some of the CPT modifiers we learned just a minute ago.
Let’s return to that angioplasty example. The patient needs to be
anesthetized before undergoing this procedure, so we turn to the Anesthesia
section of the CPT codebook and find the code 00216 for “vascular
procedures.” Now, kidney problems notwithstanding, our patient is in good
health, so we’d add the –P1 modifier to this anesthesia code, and end up
with 00216-P1.
MODIFIERS APPROVED FOR AMBULATORY SURGERY CENTER (ASC)
HOSPITAL OUTPATIENT USE
CPT modifiers are also used in ambulatory surgery centers (ASC). These
hospital outpatient facilities specialize in procedures where the patient
leaves the same day.
Note that there may be some overlap or contradiction with the set of HCPCS
modifiers, which we’ll cover in more depth later on.
For example, HCPCS codes, which are used to report procedures to Medicare
and Medicaid, have modifiers that describe which side of the body a
procedure is performed on.
We won’t dive much deeper than that for now, but just know that HCPCS,
another important code set that shares a lot with CPT, has its own set of
modifiers and that it’s important to note which format you need to use for a
particular claim.
SUPPLEMENTAL REPORTS
Many CPT modifiers require supplemental reports to the health insurance
payer. If, for instance, a payer wants to know why a surgery to repair lesions
on the liver of a patient was discontinued (let’s say there was a complication
with one of the proximal organs), the coder would want to file a
supplementary report stating this. We both want to code to the highest level
of specificity and provide as much documentation as possible. If a modifier
that requires justification of medical necessity is left without a supplemental
report, the claim that procedure is on may very well be rejected.
 Medical Terminology and Human
Anatomy
In our previous modules, you may have noticed a number of complex
anatomy and physiology terms getting tossed around. Our complete medical
terminology list will help you learn some of the most common anatomical
and surgical terms by looking at prefixes, suffixes, and roots.
Let’s start off with the basics.
NUMBERS
Many times, you’ll encounter a medical term that contains a prefix that
describes a number. Here are a few of the most common.

There are also a number of positional and directional medical terms that are
not suffixes or prefixes, but are instead standalone words. Here is a short
medical billing terminology list of some of the most valuable.

BASIC ANATOMY TERMS

This medical billing terminology list will help you navigate the CPT and ICD
manuals, decipher doctor’s reports, and give you a more thorough
understanding of the medical practice in general. Let’s look now at a few
basic terms for the regions of the body. You might recognize some of them.
CONDITIONS
Now that we’ve taken a look at the terms that describe the major regions of
the body, let’s turn to some conditions that may affect those body parts in
this medical terminology list.

SURGICAL PROCEDURES
Let’s wrap up this vocabulary review with a look at some of the most
common surgical procedures. Since it’s always imperative to list where on
the body a surgical procedure was performed, these vocabulary terms are a
small but useful addition to this section. Memorize this medical terminology
suffixes list and you’ll know instantly what kind of procedure was performed,
even if you don’t know exactly what the procedure did.
 HCPCS Codes
In this module, we’ll look at the third major code set: Healthcare Common
Procedure Coding System (HCPCS), commonly pronounced “hicks-picks.”
This code set is based upon CPT. In fact, the first level of HCPCS is identical
to CPT. That might sound a little confusing, so let’s take a step back.
HCPCS was developed by the Centers for Medicare and Medicaid (CMS) for
the same reasons that the AMA developed CPT: for reporting medical
procedures and services. Up until 1996, using HCPCS was optional. In that
year, however, the government passed the Health Information Portability and
Accountability Act, or HIPAA. We’ll look closer at that very important piece of
legislation in later courses, but for now all you need to know is that HIPAA
made the use of HCPCS mandatory in certain cases.
Coders today use HCPCS codes to represent medical procedures to Medicare,
Medicaid, and several other third-party payers. The code set is divided into
three levels. Level one is identical to CPT, though technically those codes,
when used to bill Medicare or Medicaid, are HCPCS codes. CMS looked at the
established CPT codes and decided that they didn’t need to improve upon or
vary those codes, so instead they folded all of CPT into HCPCS.
To clarify: if you are coding, say, the placement of a tracheal stent for an
elderly patient who is on Medicare, you would still use the CPT code 31631.
However, because that code is going to Medicare, and not another payer, the
code you’ve selected is technically a HCPCS code. For the most part this is
just a technicality, but it can be confusing.
Where the real difference between CPT and HCPCS comes in is in Level II of
HCPCS and the HCPCS modifiers. We’ll cover Level II codes here and work on
HCPCS modifiers in the next course.

LEVEL II HCPCS CODES

Level II HCPCS codes are designed to represent non-physician services like
ambulance rides, wheelchairs, walkers, other durable medical equipment,
and other medical services that don’t fit readily into Level I. Where CPT
describes the procedure performed on the patient, it doesn’t have many
codes for the product used in the procedure. HCPCS Level II takes care of
those products and pieces of medical equipment.
Level II codes are, like Level I, five characters long, but Level II codes are
alphanumeric, with a letter occupying the first character of the code. These
codes, like those in ICD and CPT, are grouped together by the services they
describe, and are in numeric order.
You can generally refer to the range of codes by their initial character. J-
codes, for example, are the codes for non-orally administered medication
and chemotherapy drugs. J-codes are some of the most commonly used
HCPCS Level II Codes.
HCPCS code manuals have an index and a large table of drugs. Whenever a
coder is coding the delivery of a drug or medication, they should always use
the drug table. Coding for medication is one of the most important parts of
using HCPCS, and the drug table will provide much more accurate
information on where to find the correct code.
Coders use HCPCS codes much like they would ICD or CPT codes. Upon
receiving a medical report, you’d take notes on which procedure was
performed, which products were prescribed, injected, or otherwise delivered
to the patient, and then you’d use your HCPCS code set to find the
appropriate code.
Be aware that when coding with HCPCS, you’re going to have to strive for an
even higher level of specificity than with CPT. Since this code set has codes
for all different variations and amounts of equipment and medicine, you’ll
have to stay as close to the medical report as possible to make sure you’re
coding the correct procedure. Look at it this way: 20 ten-mg capsules of
antibiotics is going to cost more than ten ten-mg capsules, right? That’s what
you have to watch out for with HCPCS.
Here’s an example. A patient receives an injection of 20 mg of adalimumab
to temporarily relieve the signs of rheumatoid arthritis. If you received this
medical report, leaving aside the CPT procedure code and the ICD diagnosis
code, you’d look at the amount of medication and the type of medication.
You’d also know, from going over the HCPCS Level II format, that you’re
looking at a J-code—a drug administered any way except orally. A lot of J-
codes are injected drugs, and that’s what we’re looking at in this example.
So, you’d look up adalimumab and find the J-code J0135, “injection,
adalimumab, 20 mg.” That’s your HCPCS Level II code, and that’s what you’d
put in if you were creating a claim for Medicare, Medicaid, or one of the many
other payers that take HCPCS codes.
Like CPT, HCPCS alerts you to which codes are new and which codes have
been revised. New codes are listed with a circle, while revised codes have a
triangle next to them. HCPCS is constantly being updated, and CMS, which
maintains the code set, will often recycle codes. HCPCS features a number of
strikethrough codes, and these let you know that a code that used to be
listed there has been deleted and moved elsewhere.
You should also note that many codes in HCPCS Level II have specific
guidelines for their use. Those guidelines are too various and fine grain to go
over here, but you should know that with HCPCS, you always need to be
paying attention. The diligent coder always takes note of the type of
equipment used and the amount of medication delivered to the patient.

HCPCS Modifiers
Now that we’ve become a little more familiar with the HCPCS code set, it’s
time to take a look at HCPCS modifiers.
In an earlier module, we talked about CPT modifiers. HCPCS modifiers work in
almost exactly the same way. The two code sets are so similar, in fact, that
you can regularly use modifiers from one code set to the other. The HCPCS
modifier –LT, for example, is regularly used in CPT codes when you need to
describe a bilateral procedure that was only performed on one side of the
body.
HCPCS modifiers, like CPT modifiers, are always two characters, and are
added to the end of a HCPCS or CPT code with a hyphen. When
differentiating between a CPT modifier and a HCPCS modifier, all there’s one
simple rule: if the modifier has a letter in it, it’s a HCPCS modifier. If that
modifier is entirely numeric, it’s a CPT modifier.
HCPCS modifiers, like CPT modifiers, provide additional information about a
procedure or service without redefining the service provided.
As you can see, these modifiers cover a broad scope of information. While
most of the codes correspond to parts of the body, there are also modifiers
for ambulance services and mammograms. If you look at the full list of
HCPCS modifiers, you’ll also find modifiers that describe everything from the
Medicare eligibility of a procedure to the number of wounds dressed on a
single patient.
As with CPT codes, we always want to use modifiers for functionality first,
and information second. That is, you’ll want to list the HCPCS modifier that
directly affects reimbursement first. Remember that while certain coding
forms provide space for multiple modifiers, payers don’t always look at
modifiers listed after the first two.
Note that certain HCPCS modifiers don’t “agree” with certain CPT modifiers.
The most obvious example of this would be CPT modifier -50 and the HCPCS
modifiers –LT and –RT. These modifiers are mutually exclusive: CPT modifier -
50 describes a bilateral procedure, while HCPCS modifiers –LT and –RT
describe which side of the body a procedure is performed on.
Let’s look at a simplified example of an HCPCS modifier in action.
A patient is suffering from bronchitis and asthma. This patient has difficulty
breathing and calls his doctor. The doctor advises the patient to go directly to
the emergency room. The doctor arranges with the hospital, which in this
case would be the healthcare provider, to pick up the patient in an
ambulance with basic life support systems, or BLS.
In order to code this procedure on a claim, we’d look at the A-codes of
HCPCS, where the ambulance codes reside. There we’d find A0428, for
“Ambulance service, basic life support, non-emergency transport.” That’s our
base HCPCS code.
Since, however, the ambulance was provided by the healthcare provider and
not, say, called in via 911, we should add a modifier to explain this. This may
seem like splitting hairs, but how an ambulance is called can greatly affect
the amount of money owed for a procedure.
In this case, we’d look for a modifier that pertains to ambulance service.
We’d find the –QN modifier, for “Ambulance service furnished directly by a
provider of services”—in other words, the hospital, the service provider, sent
the ambulance over to pick up our patient.
We’d end up with this code: A0428-QN for a basic life support ambulance
service, non-emergency transport, furnished by the provider of services.
Let’s look at another example, this time using a combination of CPT codes,
CPT modifiers, and HCPCS modifiers.
A patient requires the drainage of a large, felon abscess on the tip of the
middle finger of his left hand. A “felon” abscess is a complicated infection of
the pulp on the distal, or last, phalanx of the hand. During the procedure,
however, the patient becomes agitated and doctor decides to discontinue
the procedure.
If we’re coding this procedure, we’d first look at the procedure performed.
This is a procedure done to a patient. It’s also a surgical procedure.
Specifically, this is an incision— its drainage made via a cut to the skin.
Once in the surgery section, we’d flip to the musculoskeletal subsection and
find the Hand and Fingers field of codes. There we’d find the codes for
incision and see that there are two codes for drainage of a finger abscess:
the parent code 26010 for “drainage of finger abscess; simple” and the
indented code 26011 for “drainage of finger abscess; complicated (e.g.,
felon).”
The abscess we’re draining is complicated—it’s even listed in the code as an
example of a complicated abscess. So, we’d select the indented code and
put 26011 as our base code.
Now we’d need to look at the additional information. What’s the more
important code for reimbursement: the place on the hand where the
procedure took place, or the fact that the procedure was discontinued? In
this case, it’d be the discontinued procedure.
We’d add the CPT modifier -53 for discontinued procedure, and then we’d
look at the HCPCS modifiers for where on the body the procedure was
performed. If you’ll recall, some of the HCPCS modifiers we listed earlier have
to do with parts of the hand. We’ll look at these modifiers and find the one
that fits our need: F2, for “left hand, third digit.”
So, our code would look like this: 26011-53-F2: a discontinued drainage of a
complicated abscess on the third digit of the left hand.
Coding with HCPCS modifiers won’t always be as easy as that example, but
that one should give you a good idea of how these additions to the code set
help us code to the highest level of accuracy.
That concludes this module on HCPCS modifiers. Like the rest of the HCPCS
code set, it’s easy to get overwhelmed by the number and variety of options
available. Once you get the hang of HCPCS’s organizational structure,
though, you should be able to easily navigate this important, useful code.
 ICD-9-CM and ICD-10-CM Codes
The International Classification of Diseases (ICD) code is one of the most
essential pieces of the medical billing and coding process. Created by the
World Health Organization (WHO) as a way of standardizing healthcare
classification, ICD codes are diagnostic codes that represent all aspects of a
medical diagnosis, including symptoms, social circumstances, cause of injury
or disease, and more.
Exploring the ICD-9 and ICD-10 with Easy Lookup Tools
On this page are two tools for investigating ICD-9-CM and ICD-10-CM codes.
They are a good place to get started with your education in medical billing
and coding.
ICD-9-CM Tool
To use the ICD-9-CM tool, simply type the name of a disease or injury in the
search field. The search engine should then give you the corresponding ICD-
9-CM code. You can look up that code in the ICD-9-CM index, available
through the CDC. You will have to download a copy and open it as an RTF file.
ICD-10-CM Tool
Use the ICD-10 -CM Tool to search by the name of the disease or injury, or by
the code itself. You can then take your search results and use them to find
more information on the World Health Organization’s version of ICD-10-CM.
Click on the chapter title (like “diseases of the respiratory system”) in the
drop-down menu on the left to get a list of code blocks that chapter contains.
You can also click the arrow button to the left of the chapter title to navigate
the drop-down menu from the sidebar.
Background on the ICD
ICD-9—the ninth revision of the International Classification of Diseases—was
published in 1978 by the WHO and adapted for use in America by the NCHS.
ICD codes were originally intended to be used for epidemiological purposes,
but in the United States these codes are used by healthcare providers and
insurance companies for billing and reimbursement.
In America, “CM” stands for “Clinical Modification,” which was instituted in
the United States by the National Center for Health Statistics (NCHS) to
provide additional information related to diagnosis and procedural codes. The
CM allows for a much wider spectrum of specific information. ICD-9-CM is
updated annually on October 1st in order to reflect new diagnoses, practices,
and procedures in the healthcare industry.
How the ICD-9-CM Works
ICD codes create a standard vocabulary for identifying causes of illness,
injury, and death around the world.
Physical copies of the ICD-9-CM codes are divided into volumes. Volume 1
contains a tabular list of codes (codes listed by number with the diagnosis
following the number) and Volume 2 contains an alphabetical list of
symptoms and diagnoses. The third volume for each of these contains
procedure codes, which are only used by hospitals to report surgeries
performed in their facility. Healthcare providers and insurance companies
only use the first two volumes. For the purposes of this course, you will be
looking up ICD codes entirely online, but it is still helpful to understand the
organization of the ICD manuals.
The 5-digit numeric ICD-9-CM codes are organized from 000 to 999 according
to the type of disease or injury they describe. For instance, codes in the 320-
359 range represent diseases of the nervous system, such as encephalitis or
meningitis. Codes 800-999 correspond to injury and poisoning, like
dislocation (codes 830-839) or poisoning by drugs, medications, or other
biological substances (codes 960-979).
Those first three digits in an ICD-9-CM code describe the general type of
injury or disease, and are called the “category.” The category can be
followed by a decimal point and up to two other digits, which provide more
specific information about the type, location, and severity of the disease or
injury. These last two digits are called the subcategory, and allow coders to
increase the level of specificity of their report on a disease or injury.
Example:
 The code 722.52 corresponds to degenerative disc disease of the
lumbar, where:
 The 3-digit code, or category, “722” corresponds to “intervertebral disc
disorders” in the list of diseases and injuries
 The two-digit sub-subcategories refers to degenerative disc disease,
lumbar
Generally speaking, the more digits in a code, the more specific the type,
cause, and/or area of injury or disease.
There are also two sets of alphanumeric codes in ICD-9-CM. E-codes describe
external causes of injury, while V-codes describe factors that influence health
status and/or describe interactions with health services. An example of an e-
code would be E905.2, which describes a scorpion sting causing poisoning
and toxic reactions. An example of a V-code is V30.00, which describes a
single live infant (V30) born in a hospital (V30.0) without mention of
caesarean section (V30.00). Like the numeric codes in ICD-9-CM, each of
these codes has varying degrees of specificity based on the incident.
Preparing for the Change to ICD-10
The ICD-9-CM will be replaced by the updated ICD-10 in late 2014. In order to
comply with this change, healthcare providers, insurance companies, and
clearinghouses must all be prepared to fully adopt ICD-10-CM by October 1,
2014. All claims filed with ICD-9-CM after that date will be rejected as non-
compliant. Procedures arranged or completed before that date may still be
filed with ICD-9-CM.
This switch is happening for a variety of reasons. For one, the ICD-9-CM is out
of room. ICD-9-CM is set up so every category can only have 10
subcategories. As it currently stands, the ICD-9-CM can only classify around
13,600 diagnoses, compared to ICD-10-CM’s estimate of 69,000. As
diagnoses continue to expand, the system can no longer support the breadth
of medical study. The ICD-10 is also better suited for modern technological
advances in the field, allowing for more optimized analysis of disease
patterns and treatment outcomes.
There are similarities between the two code sets. The conventions and
guidelines for assignment codes are largely the same, as is the organization
of both sets. For instance, the first chapter, or category cluster, in both ICD-
9-CM and ICD-10 is “Certain infectious and parasitic diseases,” so any
professional qualified to manage ICD-9-CM should not have a problem with
ICD-10. However, there are also key differences between the ICD-9-CM and
ICD-10 systems, requiring a conversion on the part of the medical coder.
The composition of codes in the ICD-9-CM is primarily numeric, with limited
alphanumeric additions, as discussed above. Valid ICD-9-CM codes are three,
four, or five digits. In ICD-10-CM, all codes are alphanumeric and may be
anywhere from three to seven digits, depending on the need for specificity.
For instance, in ICD-9-CM, the cluster for “Certain infectious and parasitic
diseases” is 001-139. In ICD-10 that same cluster would be labeled A00-B99.
Here is a broader example of the tabular breakdowns in ICD-9-CM and ICD-
10:
ICD-9-CM
Certain infectious and parasitic diseases (001-139)
Intestinal infectious diseases (001-009)
Cholera (001)
 Cholera due to vibrio cholerae (001.0)
 Cholera due to vibrio cholerae eltor (001.1)
 Unspecified (001.9)
ICD-10
Certain infectious and parasitic diseases (A00-B99)
Bacterial infections, other intestinal infectious diseases, and STDs (A00-A79)
Intestinal infectious diseases (A00-A09)
Cholera (A00)
 Cholera due to vibrio cholerae (A00.0)
 Cholera due to vibrio cholerae eltor (A00.1)
 Unspecified (A00.9)
As you can see, the two code sets are largely similar, but with key
differences. The alphanumeric numbering system of ICD-10 follows the same
tabular tree as the numeric system in ICD-9-CM, adding a new subcategory
within the A00-A79 cluster. As medical coders prepare for the shift, plenty of
resources will be made available to translate ICD-9-CM into ICD-10.
Because ICD-10 and ICD-10-CM have a significantly larger set of codes than
ICD-9 and ICD-9-CM, direct translation between the two code sets is
impossible.
Watch for Coding Notes
In many cases, codes will have notes attached to them that prevent
redundancies or inaccurate coding. These notes help medical coders
accurately translate the diagnosis into code, and may include instructions
like:
  “Code first,” in which case the coder must list an underlying condition
or prior procedure
 “Includes,” which tells the coder which symptoms or afflictions the
code contains
 “Excludes” or “excludes1,” which are especially important. Unique to
ICD-9-CM, the “excludes” note instructs the coder that there is
another, more appropriate code for a certain diagnosis. “Excludes1”
indicates that the term listed under the “excludes1” field cannot occur
simultaneously with the term listed above it. For example, systemic
inflammatory response syndrome (SIRS) is coded as R65.1, but
excludes severe sepsis (R65.2).
Those these notes can be complicated, they are essential for coding
accurately. Even the smallest mistake can cause a medical claim to be
denied, creating more work for the office and possibly delaying vital
payments from the insurance company to a patient.
Wrapping Up
Switching to the ICD-10 may seem intimidating, but you can get a jump start
on preparing yourself for the changes in the industry using the tools featured
on this page. Combined with an understanding of how the new version of the
ICD is structured, they will help you make a smooth transition into using the
new system.
 Crosswalking
Working in medical coding sometimes requires finding equivalencies
between different code sets. The code sets CPT, HCPCS, and ICD are updated
annually, and medical coders need to know how to find and map codes that
may have changed between updates.
To do this, we perform a task called crosswalking. The term ‘crosswalking’
actually comes from computer science. Put simply, crosswalking is the
mapping of equivalent, identical, or similar information across two or more
distinct data sets. Put another way, when you crosswalk codes, you perform
a coding translation between two sets, not unlike how coders translate
medical reports into codes in the first place.
Code sets we’re translating between the need to both describe the same
thing. Bear in mind that crosswalking is not the process of finding the correct
diagnosis code for a particular procedure. That’s the demonstration of
medical necessity, and it’s an unavoidable part of the coding process. We’ll
cover that in a little more depth later on and in our review.
Most crosswalking is done between two versions of the same code set. That
is a newer version and it’s older, now out-of-date version. For instance, the
AMA updates the CPT code set every year, adding, changing the definitions
or descriptions of, and deleting codes. For the most part, CPT and HCPCS
make this easy for you by listing deleted and updated codes in appendices in
the back of each code manual.
The real crosswalking challenge for the medical coder is between ICD-9-CM
and ICD-10-CM. For decades, the ICD-9-CM system was used across U.S.
healthcare venues to report diagnoses but is now out of date and no longer
able to effectively represent new medical diagnoses. The current coding
system, ICD-10-CM, was implemented on October 1, 2015. This system is
significantly larger and more flexible than its predecessor, thanks to its new
format.
CROSSWALKING BETWEEN ICD-9-CM AND ICD-10-CM
To review, ICD-9-CM had five characters and was primarily numeric, with a
few alphanumeric codes used in certain situations. ICD-10-CM, on the other
hand, is seven characters long and entirely alphanumeric. Where each ICD-9-
CM code could have one subcategory and one subclassification, an ICD-10-
CM code can have one subcategory and two subclassifications, in addition to
an alpha extension that provides information as to which visit, or encounter,
this is with the patient’s particular illness or injury. ICD-10-CM is obviously a
much more extensive, detail-oriented code set, and its new format and
organization presented coders with a challenge during the transition period.
In some cases, coders may still need to translate codes back and forth from
one set to the other. If, for instance, you are looking at a patient’s medical
history from 2009, it may be necessary to crosswalk those ICD-9-CM codes
forward to ICD-10-CM to comply with contemporary coding standards.
The new ICD-10-CM format makes this crosswalking process difficult.
Remember, as coders, we always have to be as exact as possible. But
because of the increased number of subclassifications, the higher specificity
(including ICD-10-CM’s use of laterality and information regarding location on
the body), and ICD-10-CM’s organization, less than a quarter of ICD-10-CM
codes have an exact match in ICD-9-CM.
So how should we approach the crosswalking process? The best place to
start is by breaking down the types of matches there are between code sets.
The AMA has classified four types of matches between ICD-9-CM and ICD-10-
CM. Let’s take a look at them now.
ONE-TO-ONE EXACT MATCHES
In these matches, one code set (the source) has an exact match, down to the
wording, in the other code set (the target).
ONE-TO-ONE APPROXIMATE MATCHES WITH ONE CHOICE
Notably more common than exact matchces, approximate matches with one
choice make up a majority of the crosswalking procedure. 82.6 percent of
ICD-10-CM codes can be crosswalked back to ICD-9-CM as approximate
matches with one choice, and 49.1 percent can be mapped in the other
direction. Matches like this describe a “close-enough” pairing for two codes.
ONE-TO-ONE APPROXIMATE MATCHES WITH MULTIPLE CHOICES
While exact and approximate matches with only one choice make up the
majority of crosswalked codes, coders will occasionally run into coding
crosswalks that are less specific. The first of these is an approximate match
with multiple choices. In instances of multiple-choice matches, a coder may
find two or more options in one code set that correspond to a single code in
another set. In situations such as this, it’s up to the coder to decide which of
the choices of codes works best for the particular claim.
ONE-TO-MANY MATCHES
This is the most difficult and time-consuming type of ICD-10-CM/ICD-9-CM
crosswalk. In one-to-many matches, a code in the source set must be created
out of multiple codes in the target set.
In one-to-many matches, a single code in one set must be crosswalked to a
“cluster” of codes in the other set. Clusters are always between two and four
codes. There may be multiple target clusters for a single source code. It’s up
to the coder to look at and abstract all of the concepts in the single source
code and find their corollaries in the target code set. This process of
crosswalking by cluster requires diligence and a lot of review, as a missing
code from one of the clusters can drastically affect the status of a claim or
report.
NO MATCH
In certain cases, there is simply no match between code sets. This typically
only happens in cases of crosswalking ICD-10-CM back to ICD-9-CM. In these
instances, coders may use the phrase “NoDX” to show that there is no target
diagnosis code that matches the source code.
GENERAL EQUIVALENCY MAPPINGS (GEMS)
Crosswalking between ICD-10-CM and ICD-9-CM became an extremely
important skill for coders to learn during the transition period from ICD-9 to
ICD-10. In order to help coders, the National Center for Health Statistics
created a set of tools, called General Equivalency Mappings, or GEMs. GEMs
are like guides that list a code from one set and its exact, possible, or
appropriate match in the other set. These GEMs will be maintained for at
least three years beyond the October, 2015 ICD-10 implementation date, by
the CMS and CDC.
One of the main things we learn from looking at GEMs is which codes can be
transferred from one set to another. One of the main rules of crosswalking is:
You can code from a specific injury to a general one, but you cannot code
from the general to the specific.
That is, you can’t infer specific pieces of information from a more general
diagnosis code and then apply them to a more specific code in another set.
Convert CPT CODES to ICD-9
Codes for Medical Billing and
Coding

Understanding Current Procedural Technology (CPT) Codes

Current Procedural Terminology (CPT) is a code set developed and
maintained by the American Medical Association (AMA) that describes
medical, surgical, and diagnostic procedures. CPT codes allow for uniform
communication, research, and data analysis across local, regional, state, and
national bodies. CPT Codes are updated annually on January 1.
Unlike ICD codes, CPT codes are trademarked by the AMA, making it
impossible to find a comprehensive list of CPT codes online. But you should
still know how to use them to look up procedures and understand their role in
the medical billing and coding industry. These five-digit numeric codes
identify medical procedures and services in a standardized manner, and are
used by physicians, coders, health insurance companies, accreditation
agencies, and patients. CPT codes can be used for financial, analytical, and
administrative purposes, and are divided into three categories.
CPT Category I Codes
CPT is organized into three distinct categories. The first category, which is by
far the largest of the three, contains codes for six subtypes of procedures.
Much like ICD-9 and ICD-10, these procedural codes are organized into
clusters, which are then subdivided into more specific ranges. For instance,
codes for radiology fall in the number range of 70010 to 79999, and codes
for a diagnostic ultrasound procedure fall into the range of 76506 to 76999.
Within that number range, procedures have a designated code, ensuring
healthcare payers record exactly which procedure a patient has undergone.
For example, the codes 99213 and 99214, which you may have seen on your
medical bill following a checkup, correspond to routine doctor’s visits (of
simple and medium complexity, respectively).
As is the case with ICD-9 or ICD-10, the goal of CPT codes is to condense as
much information as possible into a uniform language. CPT codes are
designed to cover all kinds of procedures and are therefore very specific. For
example, the code for a 45-minute session of psychotherapy with a patient
and/or family member is 90834, while the code for a 60-minute session with
a patient and/or family member is 90837.
CPT Category II Codes
The second section of CPT (Category II, or CPT II) consists of optional
supplemental tracking codes. These codes are formatted with a letter as
their fifth character, and are coded after the initial CPT code. These Category
II codes include information on test results, patient status, and additional
medical services performed within the larger Category I procedure. Like
Category I codes, they are divided into clusters. CPT II codes for Patient
Management, for example, fall into the 0500F-0575F range. While optional,
these codes reduce the need for record abstraction and chart review, and
lower the administrative burden on healthcare professionals. In addition to
increasing efficiency, Category II CPT codes facilitate research and the
collection of data related to the quality of patient care. Some codes also
relate to state or federal law, as in the case of the codes 3044F-3046F, which
document the blood alcohol level of a patient.
These codes are a supplement, not a substitute, for the codes in Category I,
and therefore must always be attached to an existing Category I code. An
example of a CPT code with a Category II code attached is 80061-3048F,
which describes a test of low-density lipoprotein cholesterol (CPT I code
80061), with a result of less than 100 mg of cholesterol per deciliter (CPT II
code 3048F).
CPT Category III Codes
The third section of the CPT code is devoted to new and emerging
technologies or practices. Note that this code does not indicate that the
service performed is ineffectual or purely experimental. A Category III code
simply means the technology or service is new and data on it is being
tracked. Like Category II codes, Category III CPT codes are numeric-alpha,
meaning the last digit is a letter. After a predetermined period of time
(typically five years of data tracking), a procedure or technology described
by a Category III code may move into Category I, unless it is demonstrated
that a Category III code is still needed.
Understand How CPT and ICD-9-CM Codes Interact
CPT codes work in tandem with ICD-9-CM codes to create a comprehensive
picture of medical services rendered. ICD-9-CM codes, discussed in detail in
Course 10, are numeric (and in certain cases alphanumeric) diagnostic codes
that describe the symptoms, area, and type of injury or disease in a patient.
When listed together, ICD-9-CM and CPT codes present a picture of both the
diagnosis of an injury or disease and the type of service provided to the
patient by the healthcare provider.
In some cases, it may be necessary to convert CPT codes to ICD-9-CM codes.
ICD-9-CM’s alphanumeric codes describe the services, tests, consultations,
and any other way that that a healthcare provider has interacted with a
patient. There is often significant overlap between this set of codes and CPT.
For instance, the CPT code for two doses of Hepatitis A vaccine, of pediatric
or adolescent dosage, for intramuscular use is 90633. The ICD-9-CM code for
that same vaccine is V05.3. In general, CPT codes provide more specificity
than their ICD-9-CM counterparts. For instance, three doses of the above
vaccine is coded in CPT as 90634, while in ICD-9-CM it is still coded as V05.3.
Medical coders should familiarize themselves with the equivalencies between
these two code systems, and be able to freely translate one into the other.
In addition to converting between these two codes, medical coders must
ensure that the code they enter for a medical procedure (the CPT code)
makes sense with the diagnosis code (ICD-9-CM). The two codes work in
tandem to show which procedure was done for what reason. By confirming
that the codes correspond correctly, coders ensure that a claim will not be
denied and returned by a health insurance company. For instance, if you
submitted a claim for a Human Papilloma Virus vaccine (CPT code 90650),
but list the diagnosis as acute appendicitis with generalized peritonitis (ICD-
9-CM code 540.0), a health insurance company would catch this error, deny
the claim, and return it to you for correction. Lastly, the upcoming switch to
ICD-10-CM on October 1, 2014, means that coders should also be able to
convert CPT codes into ICD-10-CM codes.
Use CPT Codes to Determine Doctor Fees
CPT codes can be used to assess the actual costs of a procedure in terms of
the doctor’s fees. While medical billers and coders have access to this
information already, the AMA allows non-professionals and students the
ability to use a free CPT lookup for one procedure at a time. This is done
through the CodeManager system on the AMA website, which allows patients
to enter an existing CPT code to determine the procedure or treatment or
look up a CPT code by entering the procedure, which will allow you to assess
the cost paid by Medicare for this procedure in your area. In addition, you
can also determine the average cost of this service throughout the U.S.
Step-by-Step process for looking up CPT codes
The steps for looking up the cost of a treatment or procedure using the
CodeManager system are simple.
 Get Started. First, click the above link to enter the AMA CodeManager
website.
 Agree to play by the rules. You will have to read and click an
agreement that stipulates that you do not sell the information you
receive from the website, and that the number of times you can use
this service are limited. To continue, hit the “Agree” button.
 Specify your location. Next, the screen asks you to select the state
and nearest city in which the procedure was performed,
 Specify your procedure. Enter either the CPT code or keywords that
describe the medical treatment or procedure you wish to look up.
Your query may not return anything right away, so use these tips to search
successfully:
 Try a few different search terms. For example, if you were trying to
determine the cost of surgery to remove a ruptured appendix, you
could enter the keywords “appendectomy” or even just “appendix”,
which would lead you to several possible procedures and their costs,
including code 44960 for a simple appendectomy, as well as other
codes describing unlisted procedures involving the appendix,
examinations of that organ, and related surgical procedures.
 Use medical terminology. In most cases, procedures and body parts
are described by their medical terms, so while a search for “hip
replacement” will give you no hits, a search for “hip arthroplasty” will
give you several options of possible procedures. Of course, if you have
the CPT code you can enter it outright and it will take you straight to
the relevant procedure.
Note that in the costs column, the medical payment listed can either be
“non-facility” or “facility”, depending on where the procedure was conducted.
Facilities include hospitals, including emergency rooms, ambulatory surgical
centers (ASCs), and skilled nursing facilities (SNFs), while non-facility means
any other setting, such as clinics or private practice offices. You may also
notice that some procedures can only be conducted in a facility or non-
facility setting, which means that the other column will have an “NA” or non-
applicable label and no price.
Using RVUs to determine average costs
The medical payments listed are an average of the Medicare cost throughout
the U.S. multiplied by the relative value amount (RVU) of a region, which may
be higher or lower than 1.0. For example, the same procedure, such as an
appendectomy (44950), is priced at $722.57 in Manhattan but only $642.29
throughout Arizona. This is due to the relative costs of goods and services in
a region, and is reflected in CPU pricing.
It is also very important to note that the prices listed on the CodeManager
website reflect the cost of a procedure paid by Medicare based on the
Medicare Physician Fee Schedule (MPFS), which is very close to its actual
cost, though the prices patients or insurance providers are typically charged
more to account for the costs of the facility and its staff; This is particularly
true of private medical institutions.
 The Medical Coding Process
Medical coding is usage of standardized codes to diagnose the services
rendered to a policyholder. Every possible injury and diagnosis is assigned a
universal code that is readily understood by both healthcare providers and
insurance companies so these parties are operating under the same
umbrella of information. This process has become particularly useful, in
terms of efficiency, ever since the claims process moved over to a largely
digitized format.
Because clinical documentation practices vary, the process of abstracting
code-able information about the patient involves some detective work.
Coders must sift out the crucial information regarding diagnosis and
treatment from the documentation. For example, a coder might receive a
clinical file that looks like this:
 Date of Procedure: 6/13/20xx
 Patient Name: Jaswinder Patel
 DOB: 11/28/19xx
 HPI: Mr. Patel is a 27-year-old male who states he was doing light
chores around the house when he fell off a ladder and felt sharp pain in
his left hand. Upon receiving advice from his neighbor, he sought
medical treatment.
 Past Medical: History of sinusitis
 Diagnosis: Multiple fractures of hand
 Procedure: Splint
Workers on the administrative side of healthcare and insurance may be
prone to misunderstanding the technical terms in this document. Therefore,
after the diagnosis and procedures are complete, this medical statement is
given to the medical coder, who looks at this report and sifts out the most
crucial information that needs to be reported to the insurance company: the
diagnosis and procedure, or treatment, prescribed by Mr. Patel’s physician.
Coders convert the diagnosis and treatments into a code set, “translating”
the physician’s jargon into the universal medical language understood by all
healthcare professionals.
The medical coder then hands the converted data to the medical biller, who
sends the claim to the policyholder’s insurance company. Often, the medical
coder and the medical biller are the same person.
Coding Diseases: Navigating the ICD
The standard accepted code set for medical diagnosis is called the
International Classification of Diseases, or ICD. The ICD was created by the
World Health Organization (WHO). Since the medical field, particularly in the
realm of diagnosis and treatment, is constantly changing when new
treatments evolve, many updates of the ICD have been issued since its initial
conception. Despite being more than 30 years old, the Ninth Revision of the
International Classification of Diseases (ICD-9) is still the primary code set in
use in the United States.
Since there are thousands of different diagnoses needing to be represented
in code, down to extremely specific diagnoses, the coding system needs to
be extensive, but easy to navigate. Medical coders navigate these codes
using conventions, or guidelines for selecting and sequences ICD-9-CM
codes. They are generally set up in a tabular list to make navigating easier.
Reading the ICD codes
An ICD-9-CM code is broken down into categories and subcategories, and can
contain as many as five digits. To take Mr. Patel’s injury, for example, coders
use the ICD-9-CM code for “multiple fractures of hand bones” is 817, or
817.0. The three digits before the decimal denote the category. It falls within
categories 810-819, or “Fracture of the upper limb.” The categories 810-819
themselves fall within the larger categories 800-999, or “Injury and
poisoning.”
The digit after the decimal is called the subcategory. In the case of this
diagnosis, 817 (817.0) is the default, since it has no subcategory and
represents “multiple closed fractures of the hand bones.” If the fractures
were open, the ICD-9-CM code would be 817.1, or “multiple open fractures of
the hand bone.” The digit “1” marks the subcategory of open fractures.
To review, if a medical coder received a statement listing “multiple open
fractures of the hand bone,” or alternative language that describes the same
diagnosis, the coder may navigate the ICD-9-CM codes through the following
breakdown:
 Injury and poisoning (800-999)
 Fractures (800-829)
 Fractures of the upper limb (810-819)
 Multiple fractures of the hand bones (817)
 Multiple open fractures of the hand bones (817.1)
The categories and subcategories break down in a logical manner. The
medical coder will always have a comprehensive reference guide to break
down the ICD-9-CM using this tabular system.
Coding Treatments: Using the CPT or HPCPS
In addition to translating the diagnosis to the appropriate ICD code, medical
coders convert the treatment to a CPT code or HCPCS code. The differences
are explored below.
Exploring the CPT
Despite how extensive it is, the ICD is just one portion of medical coding, as
it covers only diagnoses. There is an entirely separate code set for medical
treatments. This code set is called Current Procedural Terminology (CPT), and
is copyrighted and maintained by the American Medical Association’s CPT
Editorial Panel.
CPT codes refer to the wide range of all medical procedures, including every
task and service performed by a medical practitioner. These codes are
broken down into three categories. The majority of CPT codes exist in
Category I. Category II is reserved for optional performance measurement,
and Category III denotes emerging technologies.
Like the ICD system, CPT codes are broken down into categories. Unlike ICD
codes, the CPT codes do not exist in detailed tabular format and are broader
in their organization.
Category I is broken down into six main sections:
 Codes for Evaluation and Management: 99201-99499
 Codes for Anesthesia: 00100-01999; 99100-99150
 Codes for Surgery: 10021-69990
 Codes for Radiology: 70010-79999
 Codes for Pathology & Laboratory: 80047-89398
 Codes for Medicine: 90281-99199; 99500-99607
Individual sections are then broken down further. For example:
 Codes for Evaluation and Management: 99201-99499
 Office/other outpatient services 99201-9215
 Hospital observation services 99217-99220
 Hospital inpatient services 99221-99239
 Consultations 99241-99255
 Emergency department services 99281-99288
 Critical care services 99291-99292
Because the CPT is copyrighted and run by the American Medical
Association, a comprehensive list of codes is generally not made available to
the public.
Using the HCPCS
Not all insurance providers accept the CPT. Medicare and Medicaid (both of
which will be discussed below) use the Healthcare Common Procedure
Coding System (HCPCS). This coding system is comprised of two levels.
Level one consists of the CPT codes and is identical in its implementation.
Level two is a coding system that is used to identity medical products and
services not included in CPT codes, such as ambulance services, prosthetics,
and durable medical equipment. These products and services are usually
used outside of the medical practitioner’s office, and Medicare/Medicaid
often cover these services where other insurance providers may not.
Wrapping Up
The medical claims process is usually a simple three-way transaction where
an individual receives a service, and the insurance company reimburses the
service provider. However, with the huge number of individuals seeking
medical treatment every day, not to mention the thousands of illnesses,
injuries, symptoms, and possible treatments for all of these, it is easy to see
how the claims process becomes complex. By focusing on the details of
coding and following the established procedures in the ICD, CPT, and HCPCS,
you will become an accurate medical coder.
 Electronic Vs. Paper Coding
In the past, coders entered their codes into paper forms, which they then
passed on to the medical billing individual or organization. Today, in order to
speed up the coding process and ensure more accuracy, the majority of the
medical coding profession uses some type of coding software.
Software programs like Epic, Centricity, AdvancedMD, Flash Code,
Eclipse, and others have fields where coders can enter the correct
procedure and diagnosis codes. These software programs may come with
lookup tools that help coders find the correct code, but coders should always
use their coding manuals to get the last word on which codes to use.
Epic is considered by many to be the gold standard and one of the more
complicated programs. Coders who familiarize themselves with the Epic
software program should be well suited to mastering other coding programs.
These programs are often paired with medical billing programs.
Because these programs are copyrighted, and because using them requires a
more complete understanding of the coding process and its day-to-day
requirements, we won’t be covering them in great depth in this course.
Instead, we’ll look at some of the things you’ll be able to do with coding
software.
The benefits of working with coding software are numerous. Coders (and
billers) can track claims and easily call up old reports to check for efficiency
and errors. Coding software is also excellent for tracking data over long
periods of time and for performance management evaluations. Software like
Epic and Eclipse can help coders keep track of their lag time for codes,
allowing for better organization and a faster turnaround in the
reimbursement cycle. Many coding programs also check, automatically, for
compatible codes, though the onus is always on the coder to check and
double-check using their coding manuals.
A good coding software program should meet the needs of your practice or
coding organization. Coding software should also be compliant with CMS-
1500 forms and all HIPAA regulations. Put simply, CMS-1500 is the general
form used to send claims to Medicare, Medicaid, and many other third-party
payers, and HIPAA is a law that created a set of standards for electronic
billing and coding in the mid-1990s.
 Coding for Anesthesia Services
INTRODUCTION
It is apparent that confusion exists regarding the proper coding of anesthesia
services performed by the OMS. Definitions for levels of sedation and
anesthesia may be found in the AAOMS Parameters of Care, the American
Dental Association’s (ADA) Current Dental Terminology (CDT) Manual and the
AMA Current Procedural Terminology (CPT). In addition, levels of anesthesia
and sedation may be defined in individual state board regulations.
The codes utilized in this module are from CPT 2013 and CDT 2013.
This module will provide general guidelines only. Because significant
variations may exist between regions, states and individual carriers, there is
no single rule that uniformly governs this unique service. Ultimately, how
anesthesia services provided by the surgeon are coded and billed depends
on each individual carrier.
Familiarity and compliance with the other AAOMS coding module, particularly
those related to ICD-9-CM diagnostic coding and procedural coding
guidelines utilizing CPT, HCPCS and CDT are necessary to utilize these codes
properly.
REQUIRED CODING MATERIALS
Before attempting to code any claims for services, it is necessary to have a
current copy of the American Dental Association’s CDT, the American
Medical Association’s CPT, and the two-volume set of ICD-9-CM. Volumes 1
and 2 of the ICD-9-CM cover diagnostic coding which is mandatory in filing
claims to medical third party payers and Medicare. Volume 1 represents a
tabular listing of conditions, diseases, and symptoms; while volume 2 is the
alphabetical listing. Volume 3 of the ICD-9-CM is only for hospitals and is not
necessary for the OMS office.
CDT 2013 went into effect January 1, 2013 and is the most recent edition. It
supersedes all previous CDT manuals and contains numerous updates and
modifications. Previously, CDT was a five-digit system, however, in the CDT-3
version the initial zero was changed to a “D.” With the reformation of the
ADA’s Coding Maintenance Committee, CDT will now be updated annually.
CPT, CDT and ICD-9-CM are revised annually. The new edition of CPT
becomes available in mid-November and effective January 1 of the following
year. Bi-annual code changes to ICD-9-CM implemented by the government
used to take effect October 1 and April 1 and were valid through the
following September 30. However, with the implementation date for ICD-10-
CM approaching, the government has placed a freeze on ICD-9-CM code
changes. Thus, reporting a current procedure or diagnosis using a previous
year’s edition may be inaccurate and adversely affect reimbursement or lead
to unnecessary delays in claims processing.
CODING FOR ANESTHESIA SERVICES USING CPT CODES
Under both medical (CPT) and dental (CDT) coding, the use of local
anesthesia is considered an inherent component of any surgical procedure
and is not billable separately.
Moderate (Conscious) Sedation
Six CPT codes (99143, 99144, 99145, 99148, 99149 and 99150) were
introduced in CPT 2006 for reporting “moderate (conscious) sedation” and
two codes were eliminated (99141 and 99142). The ASA and CPT define
Moderate Sedation /Analgesia as a drug-induced depression of consciousness
during which patients respond purposefully to verbal commands, either alone
or accompanied by light tactile stimulation. No interventions are required to
maintain a patent airway and spontaneous ventilation is adequate.
Cardiovascular function is usually maintained. These codes are:
99143 – Moderate sedation services (other than those services described by
codes 00100-01999) provided by the same physician or other qualified
health care professional performing the diagnostic or therapeutic service that
the sedation supports, requiring the presence of an independent trained
observer to assist in the monitoring of the patient’s level of consciousness
and physiological status; younger than 5 years of age, first 30 minutes intra-
service time.
99144 – age 5 years or older, first 30 minutes intra service time.
+ 99145 – each additional 15 minutes intra-service time (List separately in
addition to code for primary service); note that this is an add-on code and
must be used in conjunction with 99143, 99144.
99148 – Moderate sedation services (other than those services described by
codes 00100-01999), provided by a physician or qualified health care
professional other than the health care professional performing the
diagnostic or therapeutic service that sedation supports; younger than 5
years of age, first 30 minutes intra-service time.
99149 – age 5 years or older, first 30 minutes intra service time first 30
minutes intra-service time.
+ 99150 – each additional 15 minutes intra-service time (List separately in
addition to code for primary service); note that this is an add-on code and
must be used in conjunction with 99148, 99149
In CPT 2013 there are many codes that have a “bullseye” designation 8 in
front of the code. These codes have moderate (conscious) sedation by the
surgeon included in the RVUs for that code. None of these codes are
currently utilized by the OMS.
Deep Sedation / General Anesthesia
To report general anesthesia/deep sedation provided by the surgeon
performing the surgical procedure, it is necessary to add modifier “-47” to
the surgical procedure code. Modifier “-47” is not used as a modifier for the
CPT Anesthesia Codes (00100 – 00352 for head and neck procedures) as
these reflect anesthesia services provided by an individual other than the
operating surgeon. (Note: The five-digit modifier format was eliminated from
CPT beginning in 2003 making the previous 09947 obsolete). For example,
closed reduction of a mandibular fracture performed in the office under deep
sedation / general anesthesia would be reported as: 21451 for the procedure,
with 21451-47 as a separate line item for the anesthesia.
Some insurance companies will permit surgeons to report their anesthesia
services by utilizing codes from the Anesthesia chapter of the CPT Manual.
Such anesthesia services are reported by the use of the anesthesia five-digit
procedure code plus the addition of a physical status modifier. CPT codes
00100 through 00352 are the anesthesia codes for the head and neck region.
Unless advised otherwise by a carrier, these codes are intended to be
reported by a provider administering anesthesia for the operating surgeon or
overseeing a CRNA. In either case, these codes are not generally used to
report operator administered anesthesia.
The surgeon may be able to bill for supply of the anesthetic agent, as well as
possibly for IV antibiotics, analgesics and anti-inflammatory agents. The CPT
supply code is 99070. Some insurance companies may prefer the
appropriate HCPCS Level II code representing the drugs administered (J
codes).
Anesthesia Relative Values
According to the American Society of Anesthesiologists (ASA) Relative Value
Guide, a “Basic Value” is assigned to the anesthetic management of most
surgical procedures. This “Basic Value” includes “all usual anesthesia
services,” except for the time actually spent in anesthesia care and any
modifiers. “Usual anesthesia services” includes usual pre- and post-operative
visits, administration of fluids and/or blood products incident to anesthesia
care, and the interpretation of noninvasive monitoring (e.g., ECG,
temperature, blood pressure, oximetry, capnography). When more than one
surgical procedure is performed during a single anesthetic, the “Basic Value”
would be that of the procedure which has the highest unit value.
In addition to the ”Basic Value,” additional modifiers are used to accurately
code and bill for services. These modifiers are primarily the “Modifying Units”
[see below] and “Time Units.” Other modifiers exist, but have little or no
relevance to practicing OMS’s.
Physical Status Modifiers
Physical Status Modifiers should be appended to any CPT anesthesia chapter
code. They are indicated with the initial letter “P” followed by a single digit
from 1-6 as listed below:
P1 – Normal healthy patient.
P2 – Patient with mild systemic disease.
P3 – Patient with severe systemic disease.
P4 – Patient with severe systemic disease that is a constant threat to life.
P5 – Moribund patient, not expected to survive without the operation.
P6 – Declared brain-dead patient whose organs are being removed for donor
purposes.
These six levels are consistent with the ASA classification of physical status
and are added to the basic anesthesia code in the same fashion as any CPT
modifier. (Example: 00190 – P2).
Qualifying Circumstances
Though technically not modifiers, these codes serve to describe anesthesia
services under unusual or difficult circumstances. Such unusual
circumstances and services may qualify for additional reimbursement when
reported in addition to the anesthesia code. These codes are not reported
alone, but in addition to the qualifying anesthesia procedure or service. More
than one CPT code may be used.
+99100 – Anesthesia for patient of extreme age, under one year or over 70.
+99116 – Anesthesia complicated by utilization of total body hypothermia.
+99135 – Anesthesia complicated by utilization of controlled hypotension.
+99140 – Anesthesia complicated by emergency conditions (specify).
[Emergency is defined as existing when delay in treatment would lead to a
significant increase in the threat to life or body part.]
Reporting Time
The other factor to consider when billing for anesthesia services is time.
Anesthesia time begins when the anesthesia provider begins to prepare the
patient for induction of anesthesia (typically when the intravenous access is
established) and ends when he/she is no longer in personal attendance (i.e.,
when the patient is safely placed under postoperative supervision). This is
expressed as “Time Units.” The basic “Time Unit” is generally considered to
be 15 minutes. However, carriers may vary in how they define “Time Unit.”
For example, 10 minutes could be considered the basic unit for some
carriers. Be sure to verify with specific carriers how they define such time
units, and how they would like time reported. The HIPAA Electronic
Transaction Standard 5010 no longer accepts units and requires the reporting
of total anesthesia time. The total time is coded on the claim form under the
column for “Units.” The official instructions for completing the CMS 1500 are
maintained by the National Uniform Claim Committee (NUCC). The most
recent instructions provide guidance on reporting time above the date field
in box 24 of the claim form. For a visual example, visit nucc.org and
download the most current instructions.
WHAT ABOUT MEDICARE?
Under Medicare, deep sedation/general anesthesia is covered only for
Medicare-covered procedures, and only if administered by another doctor or
nurse anesthetist under the supervision of another doctor. Medicare
presently bundles the payment for deep sedation/general anesthesia
administered by or under the supervision of the operating surgeon.
Thus, general anesthesia/deep sedation by surgeon is non-covered and non-
billable for Medicare covered services. If, however, anesthesia is billed by a
separate individual for a Medicare-covered service, time should be reported
in accordance with policies of your local Medicare Administrative Contractor
and the current instructions set forth by the National Uniform Claim
Committee available at https://www.nucc.org.
Moderate sedation by the surgeon, on the other hand, is carrier priced. This
allows individual Medicare Part B carriers discretion regarding approval and
payment rates.
DENTAL CODING FOR ANESTHESIA
Under both medical (CPT) and dental (CDT) coding, the use of local
anesthesia is considered an inherent component of any surgical procedure
and is not billable separately.
Significant differences exist between anesthesia billing under CPT and CDT.
Notable among these are the absence of modifiers and the “Time Unit”
concept. CDT does not distinguish between operator administered
anesthesia and that provided by another practitioner. The concepts of
facility, supplies and materials are also inherently different in dental and
medical billing. It is important to keep these differences in mind when
coding.
When submitting anesthesia charges to a dental insurance carrier, the
following CDT 2013 codes should be used:
D9220 – deep sedation/general anesthesia – first 30 minutes
D9221 – deep sedation/general anesthesia – each additional 15 minutes
D9230 – analgesia, anxiolysis, inhalation of nitrous oxide
D9241 – intravenous conscious sedation/analgesia – first 30 minutes
D9242 – intravenous conscious sedation/analgesia – each additional 15
minutes
D9248 – non-intravenous conscious sedation
DEFINING START AND STOP TIME
As noted, anesthesia start time commences when the anesthesia provider
initiates the appropriate anesthesia protocol and remains in continuous
attendance of the patient. Anesthesia time ends when the anesthesia
provider can safely leave the patient under postoperative supervision. Thus,
anesthesia services and time are considered completed when the patient
may be safely left under the observation of a trained anesthesia assistant,
and the doctor may safely leave the room to attend to other duties.
Additional CDT anesthesia codes exist, but do not apply to anesthesia
utilized in conjunction with a procedure. These codes are:
D9210 – local anesthesia not in conjunction with operative or surgical
procedures
D9211 – regional block anesthesia
D9212 – trigeminal division block anesthesia
D9215 – local anesthesia in conjunction with operative or surgical
procedures
USING DENTAL CODES ON MEDICAL CLAIMS
In general, CPT codes are not used on ADA forms and CDT codes are not
used on CMS 1500 (Medical) forms. However, some medical carriers may
direct that you use CDT codes on a CMS 1500 form for “dental” procedures
which do not have an applicable CPT code (e.g. third molars). In those
situations, they may also request use of CDT anesthesia codes.
 Integumentary System
Physicians should report the HCPCS/CPT code that describes the procedure
performed to the greatest specificity possible. A HCPCS/CPT code should be
reported only if all services described by the code are performed. A physician
should not report multiple HCPCS/CPT codes if a single HCPCS/CPT code
exists that describes the services. This type of unbundling is incorrect
coding.
HCPCS/CPT codes include all services usually performed as part of the
procedure as a standard of medical/surgical practice. A physician should not
separately report these services simply because HCPCS/CPT codes exist for
them.
Specific issues unique to this section of CPT are clarified in this module.
Evaluation and Management (E&M) Services
Medicare Global Surgery Rules define the evaluation and management (E&M)
services by these rules. This section summarizes rules for reporting with
procedures covered some of the rules.
All procedures on the Medicare Physician Fee Schedule are assigned a Global
period of 000, 010, 090, XXX, YYY, or ZZZ. The global concept does not apply
to XXX procedures. The global period for YYY procedures is defined by the
Carrier (A/B MAC processing practitioner service claims). All procedures with
a global period of ZZZ are related to another procedure, and the applicable
global period for the ZZZ code is determined by the related procedure.
Since NCCI edits are applied to same day services by the same provider to
the same beneficiary, certain Global Surgery Rules are applicable to NCCI. An
E&M service is separately reportable on the same date of 000, 010, or 090
services as a procedure with a global period under limited circumstances.
If a procedure has a global period of 090 days, it is defined as a major
surgical procedure. If an E&M is performed on the same date of service as a
major surgical procedure for the purpose of deciding whether to perform this
surgical procedure, the E&M service is separately reportable with modifier
57. Other E&M services on the same date of service as a major surgical
procedure are included in the global payment for the procedure and are not
separately reportable. NCCI does not contain edits based on this rule
because Medicare Carriers have separate edits.
If a procedure has a global period of 000 or 010 days, it is defined as a minor
surgical procedure. The decision to perform a minor surgical procedure is
included in the payment for the minor surgical procedure and should not be
reported separately as an E&M service. However, a significant and separately
identifiable E&M service unrelated to the decision to perform the minor
surgical procedure is separately reportable with modifier 25. The E&M
service and minor surgical procedure do not require different diagnoses. If a
minor surgical procedure is performed on a new patient, the same rules for
reporting E&M services to apply. The fact that the patient is “new” to the
provider is not sufficient alone to justify reporting an E&M service on the
same date of service as a minor surgical procedure. NCCI does contain some
edits based on these principles, but the Medicare Carriers have separate
edits. Neither the NCCI nor Carriers have all possible edits based on these
principles.
Example: If a physician determines that a new patient with head trauma
requires sutures, confirms the allergy and immunization status, obtains
informed consent, and performs the repair, an E&M service is not separately
reportable. However, if the physician also performs a medically reasonable
and necessary full neurological examination, an E&M service may be
separately reportable.
Procedures with a global surgery indicator of “XXX” are not covered by these
rules. Many of these “XXX” procedures are performed by physicians and have
inherent pre-procedure, intra-procedure, and post-procedure work usually
performed each time the procedure is completed. This work should never be
reported as a separate E&M code. Other “XXX” procedures are not usually
performed by a physician and have no physician work relative value units
associated with them. A physician should never report a separate E&M code
with these procedures for the supervision of others performing the procedure
or for the interpretation of the procedure. With most “XXX” procedures, the
physician may, however, perform a significant and separately identifiable
E&M service on the same date of service which may be reported by
appending modifier 25 to the E&M code. This
E&M service may be related to the same diagnosis necessitating
performance of the “XXX” procedure but cannot include any work inherent in
the “XXX” procedure, supervision of others performing the “XXX” procedure,
or time for interpreting the result of the “XXX” procedure. Appending
modifier 25 to a significant, separately identifiable E&M service when
performed on the same date of service as an “XXX” procedure is correct
coding.

Anesthesia
With limited exceptions Medicare Anesthesia Rules prevent separate
payment for anesthesia for a medical or surgical procedure when provided
by the physician performing the procedure. The physician should not report
CPT codes 00100-01999 or 64400-64530 for anesthesia for a procedure.
Additionally, the physician should not unbundle the anesthesia procedure
and report component codes individually. For example, introduction of a
needle or intracatheter into a vein (CPT code 36000), venipuncture (CPT
code 36410), drug administration (CPT codes 96360-96376) or cardiac
assessment (e.g., CPT codes 93000-93010, 93040-93042) should not be
reported when these procedures are related to the delivery of an anesthetic
agent.
Medicare allows separate reporting for moderate conscious sedation services
(CPT codes 99143-99145) when provided by the same physician performing
a medical or surgical procedure except.
Local anesthesia including local infiltration, regional blocks, mild sedation,
and all other anesthesia services except moderate conscious sedation
reportable as CPT codes 99143-99145 are not separately reportable by a
physician performing a medical or surgical procedure.
Billing for “anesthesia” services rendered by a nurse or other office
personnel (unless the nurse is an independently certified nurse anesthetist,
CRNA, etc.) is inappropriate as these services are “incident to” the
physician’s services.
It is a misuse of therapeutic injection or aspiration CPT codes to report
administration of local anesthesia for a procedure. For example, it is a misuse
of CPT codes 10160 (puncture aspiration), 20500-20501 (injection of sinus
tract), 20526-20553 (injection of carpal tunnel, tendon sheath, ligament,
trigger points, etc.), 20600-20610 (arthrocentesis) to report administration of
local anesthetic for another procedure.
CPT codes 64450 (injection, anesthetic agent; other peripheral nerve or
branch) and 64455 (injection(s), anesthetic agent and/or steroid, plantar
common digital nerve(s) (e.g., Morton’s neuroma)) should not be reported by
a surgeon for anesthesia for a surgical procedure. If performed as a
therapeutic or diagnostic injection unrelated to the surgical procedure, these
codes may be reported separately.
In the postoperative period, patients treated with epidural or subarachnoid
continuous drug administration may require daily hospital
adjustment/management of the catheter, dosage, etc., (CPT code 01996).
This service may be reported by the anesthesia practitioner. The
management of postoperative pain by the surgeon who performed the
procedure, including epidural or subarachnoid drug administration, is
included in the global period services associated with the operative
procedure. If the only surgery performed is placement of an epidural or
subarachnoid catheter for continuous drug administration, CPT code 01996
may be reported on subsequent days by the managing physician.
Incision and Drainage
Incision and drainage services, as related to the integumentary system,
generally involve cutaneous or subcutaneous drainage of cysts, pustules,
infections, hematomas, abscesses, seromas or fluid collections.
If it is necessary to incise and/or drain a lesion as part of another procedure
or in order to gain access to an area for another procedure, the incision
and/or drainage is not separately reportable if performed at the same patient
encounter.
For example, a physician excising pilonidal cysts and/or sinuses (CPT codes
11770-11772) may incise and drain one or more of the cysts. It is
inappropriate to report CPT codes 10080 or 10081 separately for the incision
and drainage of the pilonidal cyst(s).
HCPCS/CPT codes for incision and drainage should not be reported
separately with other procedures such as excision, repair, destruction,
removal, etc., when performed at the same anatomic site at the same
patient encounter.
HCPCS/CPT codes describing complications of a procedure may or may not
be separately reportable at the same patient encounter as the procedure
causing the complication.
CPT code 10180 (incision and drainage, complex, postoperative wound
infection) would never be reportable for the same patient encounter as the
procedure causing the postoperative infection. It may be separately
reportable with a subsequent procedure depending upon the circumstances.
If it is performed to gain access to an anatomic region for another procedure,
CPT code 10180 is not separately reportable. However, if the procedure
described by CPT code 10180 is performed at an anatomic site unrelated to
another procedure, it may be reported separately with the procedure.
Lesion Removal
HCPCS/CPT codes define different types of removal codes such as destruction
(e.g., laser, freezing), debridement, paring/cutting, shaving, or excision. Only
one removal HCPCS/CPT code may be reported for a lesion. If multiple lesions
are included in a single removal procedure (e.g., single excision of skin
containing three nevi), only one removal HCPCS/CPT code may be reported
for the procedure. If a removal procedure is begun by one method but is
converted to another method to complete the procedure, only the
HCPCS/CPT code describing the completed procedure may be reported. If
multiple lesions are removed separately, it may be appropriate depending
upon the code descriptors for the procedures to report multiple HCPCS/CPT
codes utilizing anatomic modifiers or modifier 59 to indicate different sites or
lesions. The medical record must document the appropriateness of reporting
multiple HCPCS/CPT codes with these modifiers.
The HCPCS/CPT codes for lesion removal include the procurement of tissue
from the same lesion by biopsy at the same patient encounter. CPT codes
11000-11001 (biopsy of skin, subcutaneous tissue and/or mucous
membrane) should not be reported separately. CPT codes 11000-11001 may
be separately reportable with lesion removal HCPCS/CPT codes if the biopsy
is performed on a different lesion than the removal procedure.
Removed tissue is often submitted for surgical pathology evaluation
generally reported with CPT codes 88300-88309. If multiple lesions are
submitted for pathological examination as a single specimen, only one CPT
code may be reported for examination of all the lesions even if each lesion is
processed separately. However, if it is medically reasonable and necessary to
submit multiple lesions separately identifying the precise location of each
lesion, a separate surgical pathology CPT code may be reported for each
lesion.
If a physician reviews pathology slides from previously removed lesion(s) in
association with an evaluation and management (E&M) service to determine
whether additional surgery is required, the review of the pathology slides is
included in the E&M service. The physician should not report CPT codes
88321-88325 (surgical pathology consultation) in addition to the E&M code.
Lesion removal may require closure (simple, intermediate, or complex),
adjacent tissue transfer, or grafts. If the lesion removal requires dressings,
strip closure, or simple closure, these services are not separately reportable.
Thus, CPT codes 12001-12021 (simple repairs) are integral to the lesion
removal codes. Intermediate or complex repairs, adjacent tissue transfer,
and grafts may be separately reportable if medically reasonable and
necessary. However, excision of benign lesions with excised diameter of 0.5
cm or less (CPT codes 11400, 11420, 11440) includes simple, intermediate,
or complex repairs which should not be reported separately.
If lesion removal, incision, or repair requires debridement of non-viable tissue
surrounding a lesion, incision, or injury in order to complete the procedure,
the debridement is not separately reportable.
Mohs Micrographic Surgery
Mohs micrographic surgery (CPT codes 17311-17315) is performed to
remove complex or ill-defined cutaneous malignancy. A single physician
performs both the surgery and pathologic examination of the specimen(s).
The Mohs micrographic surgery CPT codes include skin biopsy and excision
services (CPT codes 11000-11001, 11600-11646, and 17260-17286) and
pathology services (88300-88309, 88329-88332). Reporting these latter
codes in addition to the Mohs micrographic surgery CPT codes is
inappropriate. However, if a suspected skin cancer is biopsied for pathologic
diagnosis prior to proceeding to Mohs micrographic surgery, the biopsy (CPT
codes 11000, 11001) and frozen section pathology (CPT code 88331) may be
reported separately utilizing modifier 59 or 58 to distinguish the diagnostic
biopsy from the definitive Mohs surgery. Although the CPT Manual indicates
that modifier 59 should be utilized, it is also acceptable to utilize modifier 58
to indicate that the diagnostic skin biopsy and Mohs micrographic surgery
were staged or planned procedures. Repairs, grafts, and flaps are separately
reportable with the Mohs micrographic surgery CPT codes.
Intralesional Injections
CPT codes 11900-11901 describe intralesional injections of non-
chemotherapeutic agents. CPT codes 96405-96406 describe intralesional
injections of chemotherapeutic agents. Two intralesional injection codes
should not be reported together unless separate lesions are injected with
different agents in which case modifier 59 may be utilized. It is a misuse of
CPT codes 11900, 11901, 96405, or 96406 to report injection of local
anesthetic prior to another procedure on the lesion(s). Some of the
procedures with which CPT codes 11900, 11901, 96405, and 96406 are not
separately reportable if the intralesional injection is a local anesthetic
include:
11200 – 11201 (Removal of skin tags)
11300 – 11313 (Shaving of lesions)
11400 – 11471 (Excision of lesions)
11600 – 11646 (Excision of lesions)
12001 – 12018 (Repair – simple)
12020 – 12021 (Treatment of wound dehiscence)
12031 – 12057 (Repair – intermediate)
13100 – 13160 (Repair – complex)
11719 – 11762 (Trimming, debridement and excision of nails)
11765 (Wedge excision)
11770 – 11772 (Excision of pilonidal cysts)
This list in not an exhaustive listing of the procedures since the
administration of local anesthesia by the physician performing a procedure is
not separately reportable for any procedure.
Repair and Tissue Transfer
The CPT Manual classifies repairs (closure) (CPT codes 12001-13160) as
simple, intermediate, or complex. If closure cannot be completed by one of
these procedures, adjacent tissue transfer or rearrangement (CPT codes
14000-14350) may be utilized. Adjacent tissue transfer or rearrangement
procedures include excision (CPT codes 11400-11646) and repair (12001-
13160). Thus, CPT codes 11400-11646 and 12001-13160 should not be
reported separately with CPT codes 14000-14350 for the same lesion or
injury.
Additionally, debridement necessary to perform a tissue transfer procedure is
included in the procedure. It is inappropriate to report debridement (CPT
codes 11000, 11040-11042) with adjacent tissue transfer (CPT codes 14000-
14350) for the same lesion/injury.
Skin grafting in conjunction with a repair or adjacent tissue transfer is
separately reportable if the grafting is not included in the code descriptor of
the adjacent tissue transfer code. Adjacent tissue transfer codes should not
be reported with the closure of a traumatic wound if the laceration is
coincidentally approximated using a tissue transfer type closure (e.g., Z-
plasty, W-plasty). The closure should be reported with repair codes. However,
if the surgeon develops a specific tissue transfer to close a traumatic wound,
a tissue transfer code may be reported.
Procurement of cultures or tissue samples included in the repair or adjacent
tissue not separately reportable.
Grafts and Flaps
CPT codes describing skin grafts and skin substitutes are classified by size,
location of recipient area defect, and type of graft or skin substitute. For
most combinations of location and type of graft/skin substitute, there are two
or three CPT codes including a primary code and one or two add-on codes.
The primary code describes one size of graft/skin substitute and should not
be reported with more than one unit of service. Larger size grafts or skin
substitutes are reported with add-on codes.
The primary graft/skin substitute codes (e.g., 15100, 15120, 15200, 15220)
are mutually exclusive since only one type of graft/skin substitute can be
utilized at an anatomic site. If multiple sites require different types of
grafts/skin substitutes, the different graft/skin substitute CPT codes should
be reported with anatomic modifiers or modifier 59 to indicate the different
sites.
Simple debridement of a skin wound (CPT codes 11000, 11040-11042) prior
to a graft/skin substitute is included in the skin graft/skin substitute
procedure (CPT codes 15050-15431) and should not be reported separately.
If the recipient site requires excision of open wounds, burn eschar, or scar or
incisional release of scar contracture, CPT codes 15002-15005 may be
separately reportable for certain types of skin grafts/skin substitutes.
Breast (Incision, Excision, Introduction, Repair and Reconstruction)
Since a mastectomy (CPT codes 19300-19307) describes removal of breast
tissue including all lesions within the breast tissue, breast excision codes
(19110-19126) generally are not separately reportable unless performed at a
site unrelated to the mastectomy. However, if the breast excision procedure
precedes the mastectomy for the purpose of obtaining tissue for pathologic
examination which determines the need for the mastectomy, the breast
excision and mastectomy codes are separately reportable. (Modifier 58 may
be utilized to indicate that the procedures were staged.) If a diagnosis was
established preoperatively, an excision procedure for the purpose of
obtaining additional pathologic material is not separately reportable.
Similarly, diagnostic biopsies (e.g., fine needle aspiration, core, incisional) to
procure tissue for diagnostic purposes to determine whether an excision or
mastectomy is necessary at the same patient encounter are separately
reportable with modifier 58. However, biopsies (e.g., fine needle aspiration,
core, incisional) are not separately reportable if a preoperative diagnosis
exists.
The breast procedure codes include incision and closure. Some codes
describe mastectomy procedures with lymphadenectomy and/or removal of
muscle tissue. The latter procedures are not separately reportable. Except
for sentinel lymph node biopsies, ipsilateral lymph node excisions are not
separately reportable. Contralateral lymph node excisions may be separately
reportable with appropriate modifiers (i.e., LT, RT).
Sentinel lymph node biopsy is separately reportable when performed prior to
a localized excision of breast or a mastectomy without lymphadenectomy.
However, sentinel lymph node biopsy is not separately reportable with a
mastectomy procedure that includes lymphadenectomy in the anatomic area
of the sentinel lymph node biopsy. Open biopsy or excision of sentinel lymph
node(s) should be reported as follows: axillary (CPT codes 38500 or 38525),
deep cervical (CPT code 38510), internal mammary (CPT code 38530). (CPT
code 38740(axillary lymphadenectomy; superficial) should not be reported
for a sentinel lymph node biopsy. Sentinel lymph node biopsy of superficial
axillary lymph node(s) is correctly reported as CPT code 38500 (biopsy or
excision of lymph node(s), superficial) which includes the removal of one or
more discretely identified superficial lymph nodes. By contrast a superficial
axillary lymphadenectomy (CPT code 38740) requires removal of all
superficial axillary adipose tissue with all lymph nodes in this adipose tissue.)
Breast reconstruction codes that include the insertion of a prosthetic implant
should not be reported with codes that separately describe the insertion of a
breast prosthesis.
CPT codes for breast procedures generally describe unilateral procedures.
 OB/GYN Coding Essentials
Within changes in Current Procedural Terminology (CPT) codes and the
implementation of ICD-10, many OB/GYN practices have faced medical billing
and coding difficulties that have increased claims denials and slowed the
practice revenue cycle. OB/GYN billing and coding comes with unique
challenges because of the voluminous claims filing that comes with a
practice that covers Obstetrics, Anesthesia for procedure, Gynecology, and
Family Planning. If you’re practice is dealing with excessive claims denials
that are hurting revenue, here’s a look at several strategies you can use to
avoid claims denials and start improving revenue for your OB/GYN practice.

Be Well Informed on Coding Updates

One of the best ways to make sure claims aren’t unnecessarily denied so you
can maximize reimbursements is to stay well informed on coding updates
that affect OB/GYN practices. Within the past few years, several changes in
CPT codes have been made, so it’s important to stay up-to-date. For
example, in 2017 there was a removal of the bull’s eye symbol, which
indicated moderate sedation was used for a OB/GYN procedure. That symbol
was removed for several CPT codes, including 10030 (fluid collection
drainage by catheter, image guided), 49407 (retroperitoneal or peritoneal,
transrectal or transvaginal), 57155 (insertion of vaginal oviods and/or uterine
tandem for clinical brachytherapy). A regular CPT code has also been added
for the laparoscopic ablation of fibroids, code 58674. Failing to be updated on
current coding updates has the ability to cost your practice thousands of
dollars, which is why it’s so important to work with billing and coding
specialists that are current in their knowledge.
Avoid the Most Common Causes of OB/GYN Denials
It helps to be aware of some of the most common causes of OB/GYN denials
so you can avoid them. A Physician’s Practice report noted that in the past
some of the top unexpected denials have included:
99214 – Outpatient doctor visit at a level 4
99000 – A specimen handling office-lab
81002 – Non-automated urinalysis without a scope
99213 – Outpatient doctor visit at a level 3
36415 – Routine blood capture
There are several different reasons that these denials occur. In many cases,
they get a code 18 denial for a duplicate claim or service, while it’s often
common that the claims are denied because the benefit for service was
already included in the payment of another procedure or service. These
claims may be denied because the procedure isn’t paid for separately, the
charge isn’t covered by the payer, or it could just be that the claim has errors
or lacks essential information required for reimbursement.

OB/GYN ICD-10 Specific Tips to Remember

Most practices have made the transition to ICD-10, but there are still some
helpful ICD-10 specific tips that OB/GYN practices need to remember. Here’s
a look at a few tips your practice needs to keep in mind to avoid denials:
Specific trimesters need to be documented. For example, using the new ICD-
10-CM code O09.01 is for the supervision of a pregnancy with an infertility
history within the first trimester. Be aware that codes may vary depending on
the specific trimester.
The cause of pelvic pain needs to be documented if it is known.
If a patient’s age is complicating a pregnancy. For example, for patients over
35 years old, indicate whether their age may affect their delivery.
OB/GYN coding and billing tips
1. Know coding updates. In 2014, the American Medical Association
released 335 changes to its Current Procedural Terminology code set.
Amongst these changes were code additions. “Category III code 0336T
is a new code for laparoscopy, surgical, ablation of uterine fibroid(s),
including intraoperative ultrasound guidance and monitoring,
radiofrequency which has been added to the Medicare ASC List for
2014 with an average Medicare payment of $4,671,” said Stephanie
Ellis, RN, CPC, president of Ellis Medical Consulting
2. Avoid common causes of denials. Here are the top five unexpected
denied procedures by CPT code for OB/GYN.
 99000: Specimen handling office-lab
 99213: Outpatient doctor visit, level 3
 81002: Urinalysis non-automated without scope
 36415: Routine blood capture
 99214: Outpatient doctor visit, level 4
The top five reason codes for these denials are as follows:
97: Benefit for service is already included in the payment for another
service/procedure already adjudicated
 18: Duplicate claim/service
 16: Claim lacks information or has errors
 234: Procedure is not paid separately.
 96: Non-covered charge(s)
3. Prepare for ICD-10. Here are six tips for the ICD-10 transition in the
OB/GYN field.
 Document specific trimesters. For example, ICD-10-CM code O09.01 is
equated with supervision of pregnancy with history of infertility, first
trimester.
 Take care when documenting an annual gynecological exam. The code
for an annual GYN exam is included in ICD-10-CM chapter 21, not
chapter 15. Code Z01.4 denotes a routine GYN exam.
 Document cause of pelvic pain. If cause of pelvic pain is know, OB/GYN
physicians should document this information.
 Document carefully in regards to migraines. Specify a patient has
menstrual migraines when she complains of chronic migraines related
to menstrual cramps.
 Document reason for fetus visibility scans. When documenting fetus
visibility scans, specify if it is a routine screening or if there are any
signs indicating a possible miscarriage.
 Specify if patient’s age complicates pregnancy. If a patient is older than
35 years of age, indicate whether or not age may affect delivery.
 Medical Billing Insurance Claims
Process
The medical billing insurance claims process starts when a healthcare
provider treats a patient and sends a bill of services provided to a designated
payer, which is usually a health insurance company. The payer then
evaluates the claim based on a number of factors, determining which, if any,
services it will reimburse.

Let’s briefly review the steps of the medical billing procedure leading up to
the transmission of an insurance claim. When a patient receives services
from a licensed provider, these services are recorded and assigned
appropriate codes by the medical coder. ICD codes are used for diagnoses,
while CPT codes are used for various treatments. The summary of services,
communicated through these code sets, make up the bill. Patient
demographic data and insurance information are added to the bill, and the
claim is ready to be processed.
Processing Claims
A number of technical protocols and industry standards must be met for
insurance claims to be delivered expediently and accurately between
medical practice and payer.
Medical billing specialists typically use software to record patient data,
prepare claims, and submit them to the appropriate party, but there isn’t a
universal software application that all healthcare providers and insurance
companies use. Even so, insurance claims software use a set of standards,
mandated as by the HIPAA Transactions and Code Set Rule (TCS). Adopted in
2003, the TCS is defined by the Accredited Standards Committee (ACS X12),
which is a body tasked with standardizing electronic information exchanges
in the healthcare industry.
There are two different methods used to deliver insurance claims to the
payer: manually (on paper) and electronically. The majority of healthcare
providers and insurance companies prefer electronic claim systems. They are
faster, more accurate, and are cheaper to process (electronic systems save
around $3 per claim). But because paper claims have not yet been
completely removed from the insurance claims process, it is important for
the medical biller and coder to be well versed with both electronic and
hardcopy claims.
Filing Electronic Claims
Certain technologies have been introduced into the system in order to
expedite claim processing and increase accuracy.
Software
Some healthcare providers use software to electronically enter information
into CMS-1500 and UB-04 documents. Using “fill and print” software
eliminates the possibility for unreadable information. This software may also
include certain types of “scrubbing,” or tools that check for errors in the
documents. While these tools do decrease the amount of errors made in
filling out claim forms, they are not always 100 percent accurate, so medical
billers should remain diligent when filling out forms using software.
Optical Character Recognition (OCR)
OCR equipment scans official documents, electronically isolating and
recording information provided in the different fields, and transferring (or
auto-filling) that information into other documents when necessary. While
OCR technology helps make hardcopy claim processing much more efficient,
human oversight is still needed to ensure accuracy. For instance, if the OCR
miscalculates a simple digit in a medical code, that error must be flagged
and manually corrected by a medical billing specialist.
Note that when OCR equipment is not available, it is possible for a medical
billing specialist to manually convert CMS-1500 and UB-04 documents into
digital form using conversion tools called “crosswalks” (note that the same
term applies for tools used to convert ICD-9-CM codes to ICD-10-CM). You can
find crosswalk references from a number of different sources.
Filing Manual Claims
Paper claims must be printed out, completed by hand, and physically mailed
to payers. The healthcare industry uses two forms to submit claims manually.
Since processing paper claims requires more manual interaction with forms
and data, the opportunity for human error increases compared to electronic
claims. Documents can be printed improperly, and handwritten codes can be
incorrect or illegible. The forms can also be mailed to the wrong address,
with insufficient postage, or disrupted by logistical complications with the
delivery services. These errors are costly for the healthcare provider, often
resulting in form resubmission (a time-consuming process) and payment
delays.
Generally, healthcare professionals like family physicians use form CMS-
1500, while hospitals and other “facility” providers use the UB-04 form.
CMS-1500
The CMS-1500 is the universal claim form used by non-institutional
healthcare providers (private practices, etc.) to bill Medicare for Part B
covered services and some Medicaid-covered services, and is accepted by
most health insurance providers. The CMS-1500 is maintained by the
National Uniform Claim Committee (NUCC) and was previously updated to
include National Provider Identifiers (NPIs), or unique numbers required by
the Health Insurance Portability and Accountability Act (HIPAA).
Form CMS-1500 contains all the basic information needed to submit an
accurate claim. This includes fields for the patient’s demographic
information, insurance information, and boxes in which to provide medical
codes and corresponding dates of service. Certain boxes are used exclusively
for Medicare and/or Medicaid. It is important to note that different payers
may provide different instructions on how to complete certain item numbers.
The medical biller and coder should be familiar with specific payer
requirements before filling out the form.
UB-04
Form UB-04, also maintained by the NUCC, is very similar to the CMS-1500,
but it is used by institutional healthcare providers, such as hospitals. Like the
CMS-1500, the UB-04 is used in lieu of electronic claims when the facility
meets any number of exceptions granted by the ASCA. It is the responsibility
of the facility to self-assess whether these designated exceptions apply to
their operation, granting usage of manual claims. Also similar to the CMS-
1500, certain payers may not require all fields, or data elements, to be
completed.
The role of clearinghouses
Once a file is created using these standards, it is usually sent off to a
clearinghouse. The clearinghouse is a third-party operation that primarily
acts as a middleman between healthcare providers and insurance carriers.
Think of the clearinghouse as a central hub, or a single location where all
claims are sent to be sorted and directed onward to all the various insurance
carriers. Typically, clearinghouses use internal software to receive claims
from healthcare providers, scrub them for errors, format them correctly in
accordance with HIPAA and insurance standards, and send them to the
appropriate parties. Clearinghouses generally keep medical practices in the
loop during this process by providing reports on the status of claims.
This third party is necessary because healthcare providers typically have to
send high quantities of insurance claims each day to a variety of different
insurance providers. Each of these insurance providers may have their own
submission standards. If a medical practice’s billing staff was solely
responsible for transmitting insurance claims under both insurance and
HIPAA requirements, the potential for error would increase dramatically, not
to mention the time required for formatting each claim to specific insurance
carrier.
When choosing a clearinghouse, a healthcare provider should consider two
main factors:
 Does the clearinghouse have the capability to work with the insurance
providers the practice works with most often?
 Can the clearinghouse accommodate claims transmissions from the
insurance provider’s practice management software?
Confirming these questions ensures that all transmissions run smoothly.
Wrapping Up
Healthcare providers prepare insurance claims using information provided in
the patient’s bill. Occasionally, the claim is prepared manually and sent by
mail. In most cases, the claim is sent electronically (having either been
prepared using claim software or scanned from a hard copy) to a
clearinghouse. The clearinghouse checks the claim for errors, formats it
according to HIPAA and insurance guidelines, then transmits it to the
appropriate payer, while also sending a report back to the healthcare
provider.
After the claim has been evaluated, the insurer must provide both the patient
and healthcare provider with an Explanation of Benefits (EOB). The EOB
breaks down the adjudication process, showing the dates of service,
procedures and charges, patient financial responsibility, and the amount paid
to the healthcare provider. At this point, the health insurer sends payment to
the healthcare provider, usually in the form of an electronic fund transfer.
The insurance claims process can be complex. Fortunately, there are tools to
help complete insurance claims on a day-to-day basis. Medical billing
professionals who are familiar with these tools and all documents (both
paper and electronic), industry standards, individual insurance company
regulations, clearinghouse procedures, and the adjudication process will be
prepared to succeed.
 Basic Knowledge on Billings
Medical billing and coding specialists deal with sensitive information on a
daily basis. As a medical billing and coding specialist, you will handle
provider, patient, and insurance information that must be kept secure at all
times. You will also be responsible for facilitating the secure electronic and
physical transference of sensitive medical information between these parties.
Failing to perform your duties within the guidelines may result in a federal
investigation.
An overview of guidelines and compliance requirements set by the Health
Insurance Portability and Accountability Act (HIPAA), the Office of the
Inspector General (OIG), and the Healthcare Reform Act of 2010 follows. The
guidelines set forth by these entities comprise some of the most important
privacy, security, and filing-related rules you will need to know as a medical
billing specialist.
HIPAA Compliance
HIPAA was passed by Congress and signed into law by President Clinton in
1996. Chief among the goals set forth by HIPAA was increased security and
accountability when it comes to patient medical information. Specifically,
HIPAA established guidelines that healthcare providers and health insurance
companies must follow in order to keep a patient’s information secure.
These HIPAA guidelines apply to the gathering, cataloging, and transferring
of any and all patient information. For the purposes of medical billing and
coding, HIPAA serves to curb fraudulent activity before, during, and after the
claims process as well as establishing standards for transferring patient
information electronically.
HIPAA is divided into five Titles. The main points of HIPAA that apply most to
the duties of a medical billing and coding specialist can be found in Titles I
and II of the act, which are outlined below.
Title I: Healthcare Access, Portability, and Renewability
Title I of HIPAA addresses health insurance policies within the confines of a
person’s employment. Under Title I, HIPAA sets guidelines for what an
employer can and cannot do with an employee’s healthcare plan as provided
by the employer. Specifically, Title I protects health insurance coverage for
employees and their dependents by making healthcare plans available to
those who have either lost their job or those who are in the process of
switching employers.
Title I protects employees by modifying and improving the Consolidated
Omnibus Reconciliation Act of 1985 (COBRA). Title I of HIPAA extended
healthcare benefits already offered by COBRA, including extending the
duration of benefits of disabled persons eligible for COBRA from 18 to 36
months. Title I also allowed dependents of a person covered under COBRA to
continue to receive the same healthcare coverage as they did when that
person was employed with health benefits.
Title I also addresses how health insurance companies treat patients with
pre-existing conditions. Before HIPAA, a person with a pre-existing condition
might have trouble finding a healthcare plan that covers their medical
expenses because commercial insurance companies would consider them
too risky to cover. Under Title I, insurance companies are limited in how
many restrictions they can put into place in their healthcare plans for people
with pre-existing conditions.
For medical billing and coding professionals, Title I is important because it
ensures that more people are eligible for health insurance. Because of the
laws set forth in Title I, you will process claims that involve patients covered
by COBRA or those with pre-existing conditions that still receive coverage
thanks to this act.

Title II: Preventing Medical Healthcare Fraud and Abuse,

Administrative Simplification, and Medical Liability Reform
Title II addresses many more concerns relevant to the medical billing and
coding field, namely, security and privacy requirements for handling a
patient’s medical records and methods to simplify the billing and processing
of claims. In addition, it establishes guidelines for electronic recordkeeping
and electronic transactions between parties in the healthcare system.
Title II also stipulates how healthcare providers and insurance companies
should avoid fraudulent activity. The law puts the Officer of the Inspector
General (OIG) of the Department of Health and Human Services (DHHS) in
charge of investigating and if necessary prosecuting those who commit
fraud. Your responsibilities as a medical billing specialist will be discussed in
the next section of this lesson.
The Privacy Rule
Title II expands security and privacy measures within the healthcare system
with the creation of the Privacy Rule and the Security Rule. The Privacy Rule
addresses how insurance companies and providers can handle patient
information by regulating how they disclose the information to each other
and to other entities that may require medical data. Under the Privacy Rule,
medical billing and coding specialists must be careful not to share a patient’s
Protected Health Information (PHI) with parties that aren’t covered entities
(providers, insurance companies, etc.) as stipulated by Title II. A patient’s PHI
includes the following data:
 The patient’s medical record, including present and past medical
conditions or illnesses and treatments received for them
 The location and type of healthcare provider wherein the patient
received care
 Any and all fees paid by the patient or a patient’s insurance company
to cover healthcare expenses rendered by a provider
The Security Rule
The Security Rule, on the other hand, establishes the rules for protecting a
person’s information and also explains how those rules can be enforced if
necessary. The security rule explains how covered entities must collaborate
to protect patient medical information. Part of this collaboration involves the
creation of computerized physician order entry (CPOE) systems and
electronic healthcare records (EHRs) that medical billing and coding
specialists use everyday to file and process claims. The Security Rule also
requires that any technologies developed by covered entities to facilitate
their administrative work must be secure and up to standards established by
HIPAA.
Title II also creates unique identifiers for providers, employers, and patients
in an attempt to optimize communication between entities in the healthcare
system and universalize the billing process. This is done in accordance with
the Electronic Data Interchange (EDI) Rule set forth in Title II. The unique
identifiers created for the EDI are either individual numbers or code sets
assigned to covered entities for the use of electronic transactions and should
have equal value and meaning for any medical billing specialist. Some of the
unique identifiers include the following sets:
 The National Standard Employer Identifier Number (EIN) for tracking
employers
 The National Provider Identifier Number (NPI) for tracking providers
such as private clinics, hospitals, and nursing facilities
 The National Health Plan Identifier Number (HPID) for tracking
participating health insurance companies
For medical billing and coding purposes, the standards set forth under Title II
are important because they optimize the claims process. The format and
transaction of electronic claims in particular is simpler and more secure now
than ever before thanks to Title II of HIPAA.
OIG Compliance
The OIG operating through the DHHS works to ensure that covered entities
act within the confines of privacy and security laws established in HIPAA and
related federal healthcare legislation. One of the OIG’s main duties relative
to the medical billing and coding industry is the prevention of fraudulent
activity among covered entities. As a medical billing and coding specialist
you must be vigilant about potential activity that may be viewed as
fraudulent by the OIG.
Some of the most common fraudulent practices that the OIG deals with
include:
Unbundling codes: Unbundling is a fraudulent practice of submitting
separate claims to an insurance provider for services that could fit on a
single bill. Providers send separate claims so that the various CPT/ICD-9
codes on each claim are “unbundled” from one another thereby maximizing
their payment from insurance companies.
Upcoding: Upcoding occurs when providers assign higher CPT/ICD-9 codes
than necessary to explain a patient’s condition or services they received. For
instance, a provider might upcode for extra tests that weren’t performed on
a patient just to get more money from an insurance company.
Undercoding: Undercoding is the opposite of upcoding, when a provider
intentionally leaves out codes for healthcare services rendered. Providers
may undercode in an attempt to avoid investigation by the OIG.
Falsifying medical records: Falsifying medical records is perhaps the most
egregious fraudulent activity committed by a healthcare provider. In this
case, providers falsify a patient’s medical records, including histories of their
conditions, descriptions of treatment, and payment histories for self gain.
Providers and any staff guilty of falsifying medical records will be subject to
prosecution by the OIG and other parties that may want to press charges.
If the OIG suspects that a provider or an insurance company is committing
fraud on their claims, they may conduct an audit. The OIG has the authority
as an acting party of the DHHS to enforce laws found to be broken by any
covered entity. As a medical billing specialist it is in your utmost interest to
adhere to the federal healthcare laws and regulations to avoid getting in
trouble with the OIG.

Understanding the Healthcare Reform Act of 2010

The most important aspect of the Healthcare Reform Act of 2010 for medical
billing and coding purposes is its overall expansion of the healthcare system
and its attempt to cover more Americans. These efforts to extend coverage
will require many more people to become skilled medical billing and coding
professionals simply to keep up with healthcare demands. Specifically, the
law is estimated to enroll an additional 30 million Americans in various
healthcare programs. As healthcare eligibility increases among the American
populace, so too will the number of healthcare claims needed to be filed and
processed. The most relevant effects of the bill are listed below.
Increased Protections for People Enrolled in Medicare
The Healthcare Reform Act is designed to increase healthcare access,
including to those people who should already have access to care under
current federal healthcare laws. The new law makes many preventive care
services covered under Medicare at little to no cost to enrollees. Preventative
services such as annual wellness visits and preventive screenings for
conditions like cancer, diabetes, and HIV will now be covered for Medicare
enrollees.
These increased protections and available services will help millions of
Americans to receive necessary healthcare, but it will also result in many
more claims per year to be filed with Medicare administrative contractors
(MACs) across the country.
Mandatory Electronic Medical Records and Transactions
The most important component of the Healthcare Reform Act for medical
billing specialists is the requirement that all providers use EHR systems by
the end of 2015. This means that providers who deal with mostly paper claim
forms will need to reorganize their billing department to handle electronic
transactions. Those electronic transactions will need to meet the security
and privacy standards required by HIPAA (like those established with the
privacy and security rules) and other healthcare legislation.
The push towards EHR is also designed to minimize administrative burdens
for medical billing coding specialists and other provider staff who deal with
medical information. The Healthcare Reform Act of 2010 includes a number
of suggestions for reducing this administrative burden aside from mandatory
EHR, including the implementation of new recordkeeping software. These
practices will ultimately make your job as a medical billing and coding
specialist much easier and optimize the healthcare experience for all parties
involved.
Healthcare administrative technologies change all the time, and providers
can no longer delay learning how to work with them. The Healthcare Act of
2010 merely expedited the process of bringing all providers, insurance
companies, and other covered entities into the healthcare digital age. There
will be a huge demand for trained medical billing and coding specialists who
can assist in this transition from paper claims filing to claims filed exclusively
over digital networks.
Wrapping Up
As you deal with the healthcare of thousands of patients each year, it is
essential that you follow guidelines set by healthcare governing agencies to
ensure privacy, proper conduct, fairness, and efficiency in the medical billing
services you provide. Compliance with HIPPA, OIG, and the Healthcare
Reform Act of 2010 will keep you safe from legal trouble and help the
administration of healthcare to flow smoothly.
 Running Your Own Medical Billing
and Coding Service
In this module, you’ll learn about the day-to-day activities and
responsibilities of the medical biller and medical coder. You’ll also explore
some of the tools you’ll use as a professional biller and coder, the regulations
you’ll have to follow, and tips on starting your own medical billing and coding
service.
Explore a Day in the Life of a Medical Biller and Coder
Any time a medical service is provided, whether it’s a routine checkup or a
major surgery, information about that service is recorded and given to the
medical billing and coding specialist. A doctor gives the medical biller and
coder procedure documentation of the services provided, which the biller and
coder must then translate into the proper code. Medical billing and coding
specialists are responsible for correctly coding the diagnoses and procedures
performed by the healthcare provider. This requires a thorough knowledge of
both ICD-9-CM codes and ICD-10-CM codes for diagnostics, and CPT codes for
procedures.
A procedure document includes relevant information like the date of the
procedure, the patient’s name, and his or her date of birth. More importantly,
a procedure document includes the doctor’s diagnosis and the procedure
performed. For example, a doctor may provide documentation of a mole
removed from the torso of a patient via cryoablation (essentially, freezing
the mole). The medical biller and coder would look at the procedure
documentation and decide which codes correspond to the diagnosis and
procedure listed. In the case of this example, a coder would select the CPT
code 11710 (destruction of benign lesions or skin tags or cutaneous vascular
proliferative lesions; up to 14 lesions) for the procedure, and the ICD-9-CM
code 216.5 (benign neoplasm of skin of trunk, except scrotum) for the
diagnosis.
The bulk of the medical coding portion of the billing process involves turning
procedure reports into correct medical code, then entering it into the system
for the claims process. Medical coders spend their day taking procedure
documentation, looking up the proper codes, and entering that information
into their claims software. Most medical coding is relatively straightforward
(for example, the CPT code 99213 corresponds to a routine visit to the
doctor’s office), but even with common codes there are discrepancies or gray
areas. Coders must consult their manual, professional associations, and
periodicals to stay up-to-date on current professional best practices.
Learn about lag days
Like medical billing, medical coding is a time-sensitive operation. Any hiccup
in the coding process can cause a ripple effect, which delays billing, the
claims process, and ultimately the reimbursement of the healthcare provider
from the insurance company. For this reason, most coders are asked to keep
their operations within a number of “lag days.” Lag days refer to time
between when a procedure note is given to the coder and when the claim for
that procedure is filed. Most offices keep the number of lag days between
two and five, so coders must stay on top of their work in order to ensure
efficiency in the operation of the health-care provider.
Review crosswalking
In certain cases, a medical billing and coding professional has to perform a
code “crosswalk” between these sets of codes. To briefly review, a crosswalk
refers to an equivalency or translation between two code sets. A medical
coder may have to use a crosswalk in order to track data between two
different sets of code (as in the case of ICD-10-CM and ICD-9-CM) or translate
between two sets to comply with certain form requirements (as with
translating CPT codes into ICD-9-CM codes).
Avoid clerical errors to shorten reimbursement time
Coders should also make sure the procedural and diagnostic codes that they
are entering on a claim make sense with one another. For example, you
would not want to pair the procedure code for a tonsillectomy with the
diagnosis code for a broken hand. Inaccurate, contradictory, or improperly
crosswalked codes are just a few of the many reasons a claim may be
denied, and it is up to the coding specialist to prevent as many of these
clerical errors as possible.
Understand the role of medical billers
As stated earlier, the job of the medical biller aligns closely with that of the
medical coder, but there are other integral tasks that are unique to the
medical biller. As you read in Course 2, the initial part of the medical billing
process is the collection of data from the patient. Medical billing specialists
must ensure they have all the relevant information from the patient and that
this information is correct in order to proceed with a claim to the insurance
company.
Once medical billers have the correct information regarding a patient’s
history, contact information, and insurance policy (or policies), they then
input that information into their medical claims software and begin the
claims process. Upon translating the procedure notes into diagnostic and
procedural codes (or upon receiving these codes from a third-party coder),
the medical biller creates an insurance claim and sends this to an insurance
company. Medical billers should be familiar with claim formats for each of the
major payers, including Blue Cross/Blue Shield (and other private payers),
Medicare, Medicaid, TRICARE, CHAMPVA, and various worker’s compensation
and disability organizations.
When the claim is returned and the healthcare provider is properly
reimbursed for services, medical billers must then bill the patient. This
process involves following up with patients about late payments or arranging
for a collections service in the case of notably delinquent bills. Medical billers
are also responsible for interpreting the Explanation of Benefits (EOB) and
explaining the general billing process to patients. Medical billers must be
familiar with co-pays, coinsurance, and deductibles in order to bill patients
correctly.
If a claim is returned to the healthcare provider as denied or rejected, the
medical billing expert must determine why and correct errors if possible. If
the claim was denied because of inaccurate or inappropriate coding, the
medical biller must input the correct codes and resubmit the claim (or pass it
back to the third-party coder who initially coded the procedure).
Medical billers must also prepare appeals to denied claims on behalf of
patients or the healthcare provider. A denied claim may be due to a clerical
error (as with a missed code), or it may come down to a discrepancy in the
provider’s contract with a payer. Medical billers also have to help patients
prove the necessity of their medical procedure. They must be prepared to
research all of the elements of the appeals process. As with coding, the
appeals process is time-sensitive, so medical billers handling claim appeals
must work quickly and efficiently to ensure their appeal is filed in a timely
manner.

See What Tools You Will Use as a Biller and Coder

Many professionals in the field rely heavily on billing and coding software.
This software is especially important if you are planning on working from
home. Software like Medisoft or MediTouch allow coders to look up specific
codes for accuracy and create claims quickly. There are dozens of billing and
coding software programs at various price points, and you will have to assess
what your individual needs and preferences are when it comes to the coding
software you use.
While medical billing and coding software is becoming an industry standard,
some smaller practices still use paper hard copies for their coding and billing
services. Paper is less efficient than electronic records, and can create
problems such as duplicate data (in the case of there accidentally being two
separate files for one patient), not to mention the massive amount of
physical space needed for storage of paper claims. Coding and billing via
hard copy also makes it difficult for different parties (like other insurance
companies or healthcare providers) to access important health records. Still,
despite the clear advantages of electronic health records for the purposes of
billing and coding, professional billers and coders should familiarize
themselves with hard copy billing and coding forms. Medical billers also have
to refer to hard copies of a patient’s medical records and EOBs throughout
the day when creating a claim.
Find Out What Regulations You Have to Follow
While there are no laws that apply exclusively to medical billing and coding,
billers and coders must operate within the laws and regulations that govern
the whole of the healthcare industry. Because the information they handle
includes confidential patient medical histories, they must follow guidelines
laid out in the Health Insurance Portability and Accountability Act (HIPAA),
and the Correct Coding Initiative, which is a project of the Centers for
Medicare and Medicaid (CMS).
Title II of HIPAA, also known as the Administrative Simplification Statute,
ensures that the confidentiality of patients will be secure when their
information is transmitted electronically. This applies to all entities that
handle health information electronically, including health plans, healthcare
providers, and healthcare clearinghouses. These rules also apply to any off-
site or third-party entity (such as a freelance biller or coder) that handles
sensitive healthcare information. The HIPAA Administrative Simplification
Statute states, effectively, that all parties capable of accessing or
transmitting sensitive health information have a set of rules in place that a)
protect patient health and b) identify which employees or persons will have
access to a particular level of private information. Privacy rules may vary
from one practice to another, and HIPAA mandates internal audits as a
primary method of ensuring adherence to the law. Audits may mean a
routine review of protocol and procedure for the medical coder and biller.
Note that this part of HIPAA applies only to electronic transactions, including
claims and encounter information (such as ICD-10-CM codes) and inquiries
into claim status. Healthcare providers, coders and billers, clearinghouses,
and insurance companies are not required to submit this information
electronically, but if they do, they must follow HIPAA guidelines.
The Correct Coding Initiative provides detailed guidelines for professional
coders and billers. Updated annually by CMS, the initiative ensures that the
codes used for various medical transactions are uniform around the country.
You are already familiar with certain initiative regulations: The initiative
mandates that Current Procedural Terminology (CPT) be used to code
medical procedures, and that ICD-10 be adopted by October 1, 2014 for all
diagnostic reports. The Correct Coding Initiative also regulates which codes
will be used in pharmacy and dental transactions. The medical biller and
coder should be aware of these regulations and be able to research them
whenever the need arises.

Start Your Own Business

The medical billing and coding field is expected to grow steadily in the next
few decades. As health informatics change and the healthcare industry
continues to expand, coders and billers will be in demand to cope with the
increased burden of processing information that changes hands during a
medical procedure. Third parties sometimes perform billing and coding
operations, and there are opportunities for entrepreneurs to build their own
billing and coding business.
One of the interesting benefits of starting a billing and coding profession is
the ability to work from home. Because the job requires mostly clerical work
that can be done on a computer, a medical biller and/or coder does not need
to work from a medical office or even interact with patients directly.
However, starting your own coding and billing business will not be easy. Even
if you are working from home, you’ll have to stay in frequent contact with
your clients, health insurance companies, and clearinghouses. Explore the
following tips to running your own successful billing and coding business:
1) Get certified
Certification is not formally required for medical billers and coders, but if
you’re starting your own business, you’ll want to have a certification from a
school or training program that’s recognized by either the American Health
Information Management Association (AHIMA) or the American Association of
Professional Coders (AAPC). This certification will assures prospective clients
that you have achieved a certain level of expertise and dependability.
2) Get experience
Before you start your own billing and coding service, you’ll want to get some
experience working at a healthcare provider’s office. While it might not make
sense to start your own at-home business working for someone else, you’ll
have a very hard time finding any clients willing to entrust the sensitive
health information of their patients to an unknown third party. Working for an
established provider grants you a reference, proof of your legitimacy, and
possibly even future clients.
3) Know the law
As you pursue certification, you’ll undoubtedly learn the regulations and laws
that govern the day-to-day tasks of a medical biller and coder. However,
don’t forget about local, state, and federal laws, as well. If you’re going to
run your own billing and coding service, you’ll need to apply for a business
license. You may also need to apply for special licenses within your state.
Some medical billing agencies, for example, must be registered as
collections agencies. You may also need to get a federal tax ID number for
your small business. It’s worth the time and money to consult a professional
accountant or financial adviser when it comes to setting up these licenses.
4) Get the tools
Like any start-up business, a medical billing and coding business will require
some initial investment. Fortunately, unlike the capital needed for a lot of
other small business, this investment is relatively low. You’ll have to invest in
coding, billing, and accounting software, such as Quickbooks. You should
invest in high-quality software (which may cost as much as $1,500), and
avoid any program that seems too good to be true. You’ll also have to budget
for expenses such as a computer and monitor, a fax machine/copier/scanner,
separate phone line, reference books, clearinghouse fees, and more. To save
money, explore all your options when searching for reference books. For
instance, reference books can cost around $450, but there are online
reference services that are available for around $30 per month. Also, set
aside a space in your home for an office, and furnish it accordingly. Lastly,
add the cost of training and certification into your start-up budget. All in all,
be prepared to spend between $4,000 and $6,000 to start your coding and
billing business.
5) Actively pursue networking opportunities
Once you’ve got your certification and business license and your home office
is set up, it’s time to reach out to clients. If you worked with a provider
before starting your own business, that provider may have work for you, or
may be able to suggest other offices in need of coding and billing services.
Note that smaller practices may have less on-site administrative help and
could be interested in outsourcing coding and billing tasks. You may also
want to choose a medical specialty, like cardiology or radiology. If you
become proficient in a certain area of coding and billing, it’s easy to reach
out to different practices that focus on the same thing. Set up a website for
your business and keep it updated regularly.
You should also network the old-fashioned way, by attending conferences
and joining professional associations. Professional associations like the AAPC
provide valuable resources and opportunities to learn from other individuals
in your field.
6) Get paid
When you’re about to begin work with a client, you’ll have to work out how
you’ll be paid. Third-party coders can be paid by the hour, by the claim, or by
a percentage of that client’s monthly revenue. The payment arrangement
will depend on a number of things, such as the size of the practice and the
frequency of patient visits. A general practitioner, for example, can have
more than 40 office visits a day and charge a small amount, while a
radiologist may have only a few visits but charge a significantly higher
amount. Whichever payment rate you decide on, be sure to get that rate in a
written contract.
Wrapping Up
Medical coding and billing is a complex, multifaceted career so you will need
a unique set of personal attributes to run your own business. Due to the fine-
grain nature of your work, you must be detail-oriented, highly organized, and
comfortable with math, data entry, medical guidelines, and industry
terminology. You must be able to prioritize important tasks in order to meet
certain deadlines and you should prepare yourself for the realities of being a
small-business owner, which requires significant personal investment on your
part to get off the ground.