Disclaimer CODING 101 BOOT CAMP CODING SEMINAR FOR NEW PHYSICIANS

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January 26, 2013 Presented by Joy Newby, LPN, CPC, PCS Newby Consulting, Inc. 5725 Park Plaza Court Indianapolis, IN 46220 Indianapolis, IN 46220 Voice: 317.573.3960 Fax: 866.631.9310 E‐mail: help@joynewby.net

Disclaimer

• This presentation was current at the time it was published and is intended to provide subject matter covered. • Newby Consulting, Inc. believes the information is as authoritative and accurate as is reasonably possible and that the sources of information used in preparation of the manual are reliable, but no assurance or warranty of completeness or accuracy is intended or given, and all warranties of any type are disclaimed. • The information contained in this presentation is a general summary that explains certain aspects of the Medicare Program but is not a legal document explains certain aspects of the Medicare Program, but is not a legal document. The official Medicare Program provisions are contained in the relevant laws, regulations, and rulings. • Any five‐digit numeric Physician's Current Procedural Terminology, Fourth Edition (CPT) codes service descriptions, instructions, and/or guidelines are copyright 2012 (or such other date of publication of CPT as defined in the federal copyright laws) American Medical Association. • For illustrative purposes, Newby Consulting, Inc. has selected certain CPT codes and service/procedure descriptions to be used in this presentation. • The American Medical Association assumes no responsibility for the consequences attributable to or related to any use or interpretation of any information or views contained in or not contained in this publication.

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Agenda

• Code Sets –Modifiers • Fee Schedules

–Resource‐Based Relative Value System –Resource‐Based Relative Value System • Medicare National/Local Coverage Decisions • Advance Beneficiary Notice of Noncoverage • Documentation Tips 4

Code Sets

• International Classification of Diseases, 9th_{Revision ‐} Clinical Modification (ICD‐9) • Current Procedural Terminology (CPT) –Category I –Category II C t III –Category III • Healthcare Common Procedure Coding System (HCPCS) –Level I = CPT –Level II provides more specificity for DMEPOS items, medications, codes requested by commercial insurers –Level III provides procedural codes used by hospitals and some other facilities

Medical Association 5

Code Sets – ICD‐9

• International Classification of Diseases, 9

th

Revision ‐ Clinical Modification (ICD‐9)

–Describes why the physician provided the service

Determines medical necessity/coverage –Determines medical necessity/coverage

–Currently scheduled for replacement with ICD‐10 for dates of service on or after October 1, 2014

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Code Sets ‐ CPT

• Current Procedural Terminology (CPT)

–Used to describe the services performed

•Visits

•Surgical ProceduresSurgical Procedures •Diagnostic Testing

•Medicine Services, e.g., phototherapy, whole‐body photography, laser treatment for psoriasis

–Determines payment amounts –Codes updated annually

Code Sets ‐ HCPCS

• Healthcare Common Procedure Coding System –Provides more specificity than CPT for ease in claims processing –Codes for injectable medication •J1745 Injection Infliximab, 10 mg •J0215 Injection, alefacept, 0.5 mg –Codes for durable médical equipment and supplies, e.g., ultraviolet light cabinet –Determines payment amount

The Three Volumes of ICD‐9

• Volume 1 is the Tabular List of Diseases and Injuries –There are 17 chapters and 2 supplemental chapters (V & E codes) –The ICD‐9‐CM codes are arranged in numerical order V l 2 i h Al h b i l I d f Di d • Volume 2 is the Alphabetical Index of Diseases and Injuries. The diagnostic terms are in alphabetical order. 9

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The Three Volumes of ICD‐9

• Volume 2 also includes the Neoplasm Table – It is the index to Volume 1 – Always start your search for the correct ICD‐9 here, but verify the code in Volume 1 before using the code code • Volumes 1 and 2 are used for physician billing • Volume 3 is the Tabular List and Alphabetical Index of Procedure and is used by facilities. 10

Documentation for ICD‐9

• For visit services, documentation for ICD‐9 coding is typically found in the assessment/impression section of the progress note. –Reference the diagnostic statement(s) applicable to the given encounter Di ti t t t h ld l b i l d d i • Diagnostic statement should always be included in a procedure note • Medicare has published Local and National Coverage Determinations (LCDs and NCDs) and many procedures that specifically list the ICD‐9‐CM codes that supports medical necessity for that procedure. • Commercial insurers may have their own policies. 11

Documentation for ICD‐9

• For visit services, documentation for ICD‐9 coding is typically found in the assessment/impression section of the progress note. –Reference the diagnostic statement(s) applicable to the given encounter Di ti t t t h ld l b i l d d i • Diagnostic statement should always be included in a procedure note • Medicare has published Local and National Coverage Determinations (LCDs and NCDs) and many procedures that specifically list the ICD‐9‐CM codes that supports medical necessity for that procedure. • Commercial insurers may have their own policies. 12

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Sequencing Diagnosis Codes

 Primary Diagnosis ‐ The first diagnosis reported is the condition, symptom, or problem shown in the medical record to be chiefly responsible for the patient visit that day. This is not necessarily the patient’s most serious medical condition.

 Additional/secondary diagnoses that describe any chronicAdditional/secondary diagnoses that describe any chronic complaints addressed and managed during the encounter or impact care should also be reported.  Code a chronic diagnosis as often as it is applicable to the patient’s treatment. Chronic disease(s) treated on an ongoing basis may be coded and repeated as many times as the patient receives treatment and care for the condition(s). 13

Code Only Problems That Exist

• Never code “probable, possible, questionable, suspected, or rule out” diagnoses as if they were established diagnoses. –If the physician cannot determine the diagnosis at that encounter, report the code describing the patient’s signs, symptoms abnormal test results or other reasons for the symptoms, abnormal test results, or other reasons for the service. –Examples would be rash, unspecified lesion, itching, painful joints, hives, etc. These may be signs of an underlying disease, but the physician may not be able to ascertain the exact nature of the illness during the specific encounter. 14

ICD‐9

• ICD‐9‐CM diagnosis codes are composed of codes with 3, 4, or 5 digits. –Codes with three digits are included in ICD‐9‐CM as the heading of a category of codes that may be further subdivided by the use of fourth and/or fifth di i hi h id d il digits, which provide greater detail. 15

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Physicians Must Use The ICD‐9 Manual

Correctly

• Assigning three‐digit codes (known as category codes) only if there are no four‐digit codes within the code category. • Assigning a four‐digit code (known as subcategory codes) only if there are no five‐digit codes for that category. • Assigning a five digit code (knows as fifth digit • Assigning a five‐digit code (knows as fifth‐digit subclassification codes) for that category. 16

Neoplasm Table

• Primary

• Secondary

• CA In‐situ

• Benign

• Uncertain behavior

• Unspecified

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Neoplasm Uncertain Behavior

• The term "neoplasm of uncertain behavior" is a

specific pathologic diagnosis.

–This is a lesion whose behavior cannot be predicted. –It's currently benign, but there's a chance that it y g , could undergo malignant transformation over time. –ICD‐9: represents "certain histo‐morphologically well‐defined neoplasms, the subsequent behavior of which cannot be predicted from the present appearance." 18

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Neoplasm Table 19

Neoplasms

• The neoplasm table in the Alphabetic Index should be referenced first. • However, if the histological term is documented, that term should be referenced first, rather than going immediately to the Neoplasm Table, in order to determine which column in the Neoplasm Table is determine which column in the Neoplasm Table is appropriate. – For example, if the documentation indicates “adenoma,” refer to the term in the Alphabetic Index to review the entries under this term and the instructional note to “see also neoplasm, by site, benign.” – The table provides the proper code based on the type of neoplasm and the site 20

Neoplasms

Not all neoplasms are in the Neoplasm Table.

• Lipoma (fatty benign tumor)

• Melanoma (malignant skin cancer)

• Neuroendocrine tumor

• Merkel cell carcinoma (malignant skin cancer)

Always check the index FIRST!!!

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Current Procedural Terminology (CPT)

• CPT codes are developed and maintained by the American Medical Association (AMA). They were first developed and published in 1966.

• The American Medical Association’s CPT Editorial Panel is responsible for maintaining and updating CPT and the AMA responsible for maintaining and updating CPT and the AMA holds the copyright for CPT.

• Updates and revisions to CPT generally become effective January 1 each year, but may be released on a quarterly basis as needed.

CPT

Category I • Current Procedural Terminology (CPT) codes are used to report what the physician did (procedures and/or services) during the encounter I l d • Includes – Codes to describe visits, diagnostic tests, surgical procedures and other medical services – A list of 2‐digit modifiers that can be used to indicate when a procedure/service was altered, but the alteration did not change the definition or code

CPT

Category II codes

• Added to CPT in 2004 to report performance measures • These codes are alphanumeric and include 4 numeric and “F” as the final digit • Many of the codes are used to report PQRS measures • Fee‐for‐service revenue is not tied to these codes –May affect payments in the future as we move from payment for quantity to payment for quality

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CPT

Category III

• Added to CPT in 2001

–These codes report emerging technology, services and procedures

services, and procedures –Category III codes are temporary –They consist of four digits followed by an

alphabetic character of “T”

–Physicians should verify insurance coverage

Healthcare Common Procedure

Coding System (HCPCS)

 Level II HCPCS codes were created by CMS to report nonphysician services and supplies, materials, injections, and certain procedures and services not defined in CPT.  These codes are recognized under HIPAA as a national d t code set.  Level II HCPCS codes are five character alphanumeric codes  Codes begin with a single letter from the range A‐S or V followed by four numeric digits.  HCPCS also includes two digit alpha and alphanumeric modifiers information and payment modifiers

Resource‐Based Relative Value Units

• Beginning 1992, Congress mandated a change in the data used to create the Physician Fee Schedule (PFS) –Replaced the “usual, customary, and reasonable” calculations adjusted by the Medicare Economic Index • The Social Security Act (Act) requires the Centers for M di & M di id S i (CMS) t t bli h Medicare & Medicaid Services (CMS) to establish payments under the PFS based on national uniform relative value units (RVUs) and the relative resources used in furnishing a service –The Act requires that national RVUs be established for physician work, practice expense (PE), and malpractice expense

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Medicare Fee Schedule Formula

• To calculate the payment for each physician service, the components of the fee schedule (work, PE, and malpractice RVUs) are adjusted by geographic practice cost indices (GPCIs).

–The GPCIs reflect the relative costs of physician work PEThe GPCIs reflect the relative costs of physician work, PE, and malpractice in an area compared to the national average costs for each component.

• RVUs are converted to dollar amounts through the application of a conversion factor (CF), which is calculated by CMS’ Office of the Actuary (OACT)

Medicare Fee Schedule Formula

• Payment = [(RVU work x GPCI work) + (RVU

PE x GPCI PE) + (RVU malpractice x GPCI

malpractice)] x CF

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Relative Value Units (cont’d)

HCPCS Description Work RVU Expense RVU Malpractice RVU Medicare Allowed

99203 Office/outpatient visit new 1.42 1.53 0.14 115.03 99213 Office/outpatient visit established 0.97 1.03 0.07 76.33 99221 Initial hospital care 1.92 0.79 0.18 107.91

 For additional information on procedures, including relative value units, a fee schedule status indicator, and various payment policy you may access the Medicare Physician Fee Schedule Database (MPFSDB)/ Relative Value File on the CMS website at:

http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Relative-Value-Files-Items/RVU13A.html

 Access the Medicare Physician Fee Schedule Database (MPFSDB)/Fee Schedule Look-Up(external link)

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Sustainable Growth Rate

• Sustainable Growth Rate (SGR) is the method

CMS currently uses to control Medicare

spending for physician services.

–Generally this method ensures that the yearly –Generally, this method ensures that the yearly increase in the expense per Medicare beneficiary does not exceed the growth in gross domestic product (GDP)

• Required by the Balance Budget Act of 1997

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SGR

Section 1848(f)2 of the Social Security Act specifies the formula for calculating the SGR. There are four factors used in calculating the SGR: 1. The estimated percentage change in fees for physicians’ services. 2. The estimated percentage change in the average number of Medicare fee‐for‐service beneficiaries. 3. The estimated 10‐year average annual percentage change in real GDP per capita. 4. The estimated percentage change in expenditures due to changes in law or regulations. 32

SGR

• If the expenditures for the previous year exceeded the target expenditures, then the conversion factor should decrease payments for the next year. • If the expenditures were less than expected, the conversion factor would increase the payments to physicians for the factor would increase the payments to physicians for the next year. • On March 1 of each year, the physician fee schedule is updated accordingly. • The implementation of the physician fee schedule update to meet the target SGR can be suspended or adjusted by Congress, as has been done regularly in the past (the doc fix) 33

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Permanent/Long‐Term SGR Fix

• $240 billion is the current estimate of the cost associated with a long‐term “Doc fix” to prevent decreases in Medicare reimbursements for the next decade.

• On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012

Taxpayer Relief Act of 2012 –Replaced the 26.5 percent decrease with a 0.0 percent update in the conversion factor for dates of service 1/1/2013 – 12/31/2013 –Cost: $25 billion was the cost –26.5 percent will be added to the SGR formula calculated for 2013 34

Medicare Physician Fee Schedule

11400 124.82 118.58 136.37 134.32 # 11400 82 15 78 04 89 75 88 40

Medical Association 35 # 11400 82.15 78.04 89.75 88.40 11401 152.56 144.93 166.67 164.17 # 11401 108.62 103.19 118.67 116.89 11402 170.22 161.71 185.97 183.17 # 11402 119.90 113.91 131.00 129.03 11403 197.64 187.76 215.92 212.68 # 11403 154.65 146.92 168.96 166.43 11404 224.79 213.55 245.58 241.90 # 11404 171.29 162.73 187.14 184.33 11406 327.53 311.15 357.82 352.45 # 11406 262.89 249.75 287.21 282.90 11420 124.15 117.94 135.63 133.60

Commercial Insurer Fee Schedules

• Since 1992, most insurers have eliminated their calculations of usual, reasonable, and customary charges and have adopted CMS’ RVUs –Typically develop their own conversion factor May have multiple conversion factors –May have multiple conversion factors

• Some insurers base their fee schedule on a percentage of Medicare

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Medicare National and Local Coverage

Decisions

• CMS issues National Coverage Decisions (NCD) that must be followed by all contractors • Medicare Administrative Contractors and Medicare’s Durable Medical Equipment Regional Contractors can establish Local Coverage Decisions (LCD) Coverage Decisions (LCD) 37

NCD Example

Infrared Therapy Devices • Effective for services performed on and after October 24, 2006, CMS determined that there is sufficient evidence to conclude the use of infrared therapy devices and any related accessories is not reasonable and necessary under section 1862(a)(1)(A) of the Social Security Act (the Act). 1862(a)(1)(A) of the Social Security Act (the Act). • The use of infrared and/or near‐infrared light and/or heat, including monochromatic infrared energy, is non‐covered for the treatment, including the symptoms such as pain arising form these conditions, of diabetic and/or non‐diabetic peripheral sensory neuropathy, wounds and/or ulcers of the skin and/or subcutaneous tissues.

Local Coverage Decision ‐ Illinois

Mohs Micrographic Surgery (L30713)

• Includes –Indications –Limitations T i i R i t f –Training Requirements for surgeon –Coding guidelines –Documentation Requirements •The medical records should clearly show that Mohs surgery was chosen because of the complexity, size and/or location of the lesion.

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Medical Necessity and Advance

Beneficiary Notice of Noncoverage

Social Security Act prohibits physicians from charging patients for services denied as “not medically necessary” unless the patient is advised the service may be denied and that the patient is financially responsible for the charges

• Physicians are responsible for obtaining an ABN prior toPhysicians are responsible for obtaining an ABN prior to providing the service or item to a beneficiary. • The form must be filled out in its entirety and must include the specific service, cost and the reason why Medicare may deny the service • Only the approved Form CMS‐R‐131 is valid and the forms may not be altered 40

Advance Beneficiary Notice (cont’d)

Example

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National Correct Coding Initiative

• Also known as “bundling edits” • Implemented by CMS and promotes correct coding methodologies.\ • Controls the improper assignment of codes that results in inappropriate reimbursement inappropriate reimbursement. • Medicare publishes CCI: http://www.cms.hhs.gov/NationalCorrectCodInitEd/

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National Correct

Coding

Initiative

(cont’d)

Importance of Documentation

Documentation is the recording of pertinent facts and observations about an individual’s health history including past and present illnesses, tests, treatment and outcomes. • The medical record is the chronological documentation of patient care • Enables planning and evaluation of the patient’s treatment and progress • Facilitates continuity of care through communication between health care workers • Establishes medical necessity by linking the diagnosis to the services provided. 44

Importance of Documentation

• Provides evidence of orders and performance of services • Facilitates prospective and retrospective audits. • Facilitates review and payment of claims • Facilitates utilization review, quality of care evaluations, and medical reviews • Provides clinical data for research and education • Serves as a legal document, a piece of definitive evidence 45

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Progress Notes ‐ SOAP Format

• Subjective: the patient’s complaint(s), presenting problem(s). What the patient says

• Objective: objective factors, visible or observable findings on exam. What the physician observes

• Assessment: diagnostic process probable diagnosis(es) total • Assessment: diagnostic process, probable diagnosis(es), total impression based on subjective and objective factors • Plan: treatment plan including medications, tests, follow‐up information, patient instructions 46

General Principals of Medical Record

Documentation for E/M Codes

Evaluation and Management Codes • Documentation Guidelines –The medical record should be complete and legible –Each patient encounter should include: •Reason for encounter and relevant history, physical examination findings, and prior diagnostic test results •Assessment, clinical impression, or diagnosis, •Plan for care •Date and legible identity of the observer 47