Coding and Reimbursement Basics for Lawyers :  Understanding our (not so) little corner of the healthcare industry… Americ...
<ul><li>Jeffrey E Sinaiko </li></ul><ul><li>Sinaiko Healthcare Consulting, Inc. </li></ul><ul><li>President </li></ul><ul>...
Goals <ul><li>Gain a basic knowledge of the purpose and differences of CPT, DRG, MS-DRG, HCPCS and ICD-9 coding; </li></ul...
<ul><li>Not all codes are created equal </li></ul><ul><li>ICD-9-CM, DRG, MS-DRG, </li></ul><ul><li>CPT, HCPCS, … </li></ul...
The Coding System: ICD-9-CM <ul><li>International Classification of Diseases – Clinical Modifications: 9 th  Revision (ICD...
“DRG” and “MS-DRG” <ul><li>Diagnostic Related Group  (DRG)   </li></ul><ul><ul><li>Hospital cases are grouped into one of ...
History of Diagnosis Coding Source: CMS “ Diagnosis Coding Using the ICD-9-CM ” CMS Proposes to replace ICD-9-CM with ICD-...
ICD-10 Implementation <ul><li>U.S. Implementation scheduled October 1, 2011 </li></ul><ul><ul><li>Improve Disease Tracking...
The Coding System: HCPCS <ul><li>Healthcare Common Procedure Coding System (“HCPCS”) </li></ul><ul><li>“ What”  service or...
The Coding System: At A Glance ICD-9-CM Used to describe  WHY  services are rendered Volume 1:  Tabular listing of medical...
The Experts: Certified Coders <ul><li>Certification demonstrates competence in medical  coding.   </li></ul><ul><li>Both m...
American Academy of Professional Coders (AAPC) <ul><li>The Certified Professional Coder (CPC) </li></ul><ul><ul><li>CPC-A:...
American Health Information Management Association (AHIMA) <ul><li>American Health Information Management Association  (AH...
Who Requires Certified Coders? <ul><li>Who requires certified coders  ? </li></ul><ul><li>CMS Transmittal 18: 9/8/2006, ef...
Translation: Basic Documentation <ul><li>The Medical Record- a legal document and more </li></ul><ul><ul><li>Basic require...
Translation: A True  Art <ul><li>The science of medical care is inherent </li></ul><ul><li>Understanding the translation o...
Medical Necessity <ul><li>Medically Necessary v. Medically Appropriate </li></ul><ul><ul><li>Medically Appropriate- a serv...
Medical Necessity:  Coding Tells a Story… <ul><li>Story 1:  </li></ul><ul><ul><li>CPT Procedure is for a Throat Culture </...
Translation: A True  Art <ul><li>How does it make a difference? </li></ul><ul><ul><li>HCPCS/CPT Describes EXACTLY, what se...
Translation: Where the money is… <ul><li>Modifiers- alter or adds information to the service </li></ul><ul><ul><li>Informa...
Compliance: Common Deficiencies <ul><li>OIG Workplan- Annually provides a framework for suspected high risk payment concer...
Common Deficiencies  (continued) <ul><li>Common industry-wide findings overview:  </li></ul><ul><ul><li>Separate payment o...
Common Audit Findings <ul><li>Misrepresentation of the level of service rendered and documented (“over/under E/M coding”);...
Common Audit Findings <ul><li>Inappropriate use or not using waivers and Advanced Beneficiary Notices (“ABNs”) </li></ul><...
RAC Audit Findings <ul><ul><li>CMS  Recovery Audit Contractor  (RAC) Status Document FY2007 states:   </li></ul></ul><ul><...
Coding Audit: A Lawyer’s Perspective <ul><li>Purpose or Intent </li></ul><ul><ul><li>Clearly define: What is the focus and...
Coding Audit: A Lawyer’s Perspective <ul><li>What information to request </li></ul><ul><ul><li>Charge data </li></ul></ul>...
Coding Audit: A Lawyer’s Perspective <ul><li>What to manage (criteria) </li></ul><ul><ul><li>Expectations </li></ul></ul><...
Coding Audit: A Lawyer’s Perspective <ul><li>How to understand and use common findings  </li></ul><ul><ul><li>Was the resu...
OIG Workplan 2009: Sample Items <ul><li>‘Incident to’ services- qualifications of clinicians billing incident to a billing...
Summary <ul><li>Coding: “Our little corner of the world” </li></ul><ul><li>Now we can understand while coding is a small p...
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AHLA Basic Coding for Lawyers Presentation

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This presentation was shared with an audience at the AHLA Fundamentals of Health Law program in November 2008.
It contains some basic coding and compliance information to introduce health lawyers to the coding world including recent hot topics under scrutiny.

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  • Transcript of "AHLA Basic Coding for Lawyers Presentation"

    1. 1. Coding and Reimbursement Basics for Lawyers : Understanding our (not so) little corner of the healthcare industry… American Health Lawyers Association
    2. 2. <ul><li>Jeffrey E Sinaiko </li></ul><ul><li>Sinaiko Healthcare Consulting, Inc. </li></ul><ul><li>President </li></ul><ul><li>310-551-5252 </li></ul><ul><li>[email_address] </li></ul><ul><li>Kelly C Loya, CPC-I, CPhT </li></ul><ul><li>Sinaiko Healthcare Consulting, Inc. </li></ul><ul><li>Senior Consultant </li></ul><ul><li>310-551-5252 </li></ul><ul><li>[email_address] </li></ul>Presenters
    3. 3. Goals <ul><li>Gain a basic knowledge of the purpose and differences of CPT, DRG, MS-DRG, HCPCS and ICD-9 coding; </li></ul><ul><li>Identification of different types of coding professionals; </li></ul><ul><li>Understand the impact of medical care translation into billing data as it relates to legal issues; </li></ul><ul><li>Evaluate how coding directly impacts billing (positively, negatively and legal concerns); </li></ul><ul><li>Describe compliance deficiencies related to coding; </li></ul><ul><li>Understand the specifics of coding audits to identify core issues including problem sources and potential correction; and </li></ul><ul><li>How to manage them under privilege and interpret the results. </li></ul>
    4. 4. <ul><li>Not all codes are created equal </li></ul><ul><li>ICD-9-CM, DRG, MS-DRG, </li></ul><ul><li>CPT, HCPCS, … </li></ul><ul><li>What’s the difference? </li></ul><ul><li>What does it all mean? </li></ul>
    5. 5. The Coding System: ICD-9-CM <ul><li>International Classification of Diseases – Clinical Modifications: 9 th Revision (ICD-9-CM) </li></ul><ul><ul><li>Also referred to as “diagnosis coding” </li></ul></ul><ul><ul><li>“ Why” services are rendered </li></ul></ul><ul><ul><li>“ CM” indicates clinical modifications of the system for use in the US </li></ul></ul><ul><ul><li>Volume 1: A tabular listing of medical conditions maintained by the World Health Organization (WHO) </li></ul></ul><ul><ul><li>Volume 2: Alphabetic Index </li></ul></ul><ul><ul><li>Volume 3: Procedures used by hospitals only </li></ul></ul><ul><ul><li>Compliance issues may indirectly relate to ICD-9 coding (e.g. medical necessity), but generally are not directly tied to diagnosis selection. </li></ul></ul>
    6. 6. “DRG” and “MS-DRG” <ul><li>Diagnostic Related Group (DRG) </li></ul><ul><ul><li>Hospital cases are grouped into one of approximately 500 groups, using ICD-9, ICD-9-CM codes and other patient specific demographics; </li></ul></ul><ul><ul><li>Each DRG is expected to represent similar hospital resource use; </li></ul></ul><ul><ul><li>Developed for Medicare, Prospective Payment System; and </li></ul></ul><ul><ul><li>Payment based on the hospital resource expected use. </li></ul></ul><ul><li>Medicare Severity DRGs (MS-DRGs) </li></ul><ul><ul><li>Implemented in October 2007; </li></ul></ul><ul><ul><li>Modification of the DRG payment methodology; and </li></ul></ul><ul><ul><li>Represents a comprehensive approach to applying a severity of illness stratification for Medicare patients throughout the DRG classification system based on resource use and case complexity. </li></ul></ul>
    7. 7. History of Diagnosis Coding Source: CMS “ Diagnosis Coding Using the ICD-9-CM ” CMS Proposes to replace ICD-9-CM with ICD-10 by Oct. 2011! 2008 The coding and reporting requirements published in 1994 by the Centers for Medicare & Medicaid Services (CMS) outlined basic steps that physicians should use to ensure correct coding. 1994 Since the passage of the Medicare Catastrophic Coverage Act of 1988, providers have been required to submit a diagnosis code on claim forms in order to receive reimbursement. 1988 The ICD-9-CM, or International Classification of Diseases, Ninth Revision, Clinical Modification, was published for use in 1979. 1979 The ICD-9 (without the CM for Clinical Modification) was used for coding in the U.S. from 1948 to 1979. 1948 Some form of medical diagnostic coding dates back to 17th-century England. 1600s
    8. 8. ICD-10 Implementation <ul><li>U.S. Implementation scheduled October 1, 2011 </li></ul><ul><ul><li>Improve Disease Tracking </li></ul></ul><ul><ul><li>Speed Transition to an Electronic Health Care Environment </li></ul></ul><ul><li>ICD-9 is over 30 years old with limited space </li></ul><ul><li>ICD-9 lacks necessary detail </li></ul><ul><li>ICD-9 17,000 codes v. ICD-10 68,000 codes </li></ul><ul><li>HHS proposed rule appears flawed </li></ul><ul><li>Will we be ready? </li></ul><ul><ul><li>Massive requirements for implementation! </li></ul></ul>
    9. 9. The Coding System: HCPCS <ul><li>Healthcare Common Procedure Coding System (“HCPCS”) </li></ul><ul><li>“ What” service or supply was provided </li></ul><ul><li>Level 1 : Current Procedural Terminology (CPT) codes maintained by the AMA (ex: 99213) </li></ul><ul><li>Level 2 : Alpha-numeric codes (ex: G0105) </li></ul><ul><li>Level 3 : Local codes were eliminated by HIPAA in October 2002 </li></ul>
    10. 10. The Coding System: At A Glance ICD-9-CM Used to describe WHY services are rendered Volume 1: Tabular listing of medical conditions, causes and/or status Volume 2: Alphabetic index (Used first in locating condition in Volume 1) Procedure Codes Used to describe WHAT services/ supplies provided HCPCS (For other than hospital inpatients) ICD-9-CM Volume 3 (For hospital inpatients) HCPCS Level 1 CPT Codes (AMA) HCPCS Level 2 HCPCS (CMS, BCBSA, AHIP) Category 1 Items commonly accepted in clinical practice Category II Used to track performance measures Category III New and emerging technologies
    11. 11. The Experts: Certified Coders <ul><li>Certification demonstrates competence in medical coding. </li></ul><ul><li>Both major national certification organizations – AAPC and AHIMA for both professional fee and facility coding require: </li></ul><ul><ul><li>Practical coding experience; </li></ul></ul><ul><ul><li>Successful completion of testing requirements, in order to hold an active credential; and </li></ul></ul><ul><ul><li>Continuing education units (CEUs) to maintain certification. </li></ul></ul>
    12. 12. American Academy of Professional Coders (AAPC) <ul><li>The Certified Professional Coder (CPC) </li></ul><ul><ul><li>CPC-A: pertains to an apprentice (w/out required experience) </li></ul></ul><ul><ul><li>CPC: pertains to professional-fee coding </li></ul></ul><ul><ul><li>CPC-P: pertains to adjudication of provider claims </li></ul></ul><ul><ul><li>CPC-H: pertains to hospital outpatient/facility coding </li></ul></ul><ul><li>Specialty certifications exhibit further detailed competence in specific areas: </li></ul><ul><ul><li>PMCC Instructors </li></ul></ul><ul><ul><li>Specific Specialty Competence </li></ul></ul>
    13. 13. American Health Information Management Association (AHIMA) <ul><li>American Health Information Management Association (AHIMA) </li></ul><ul><ul><li>The Certified Coding Specialist (CCS) </li></ul></ul><ul><ul><ul><li>CCA: pertains to associate (entry level skills) </li></ul></ul></ul><ul><ul><ul><li>CCS: pertains to hospital inpatient & outpatient/facility coding </li></ul></ul></ul><ul><ul><ul><li>CCS-P: pertains to professional fee coding </li></ul></ul></ul>
    14. 14. Who Requires Certified Coders? <ul><li>Who requires certified coders ? </li></ul><ul><li>CMS Transmittal 18: 9/8/2006, effective 10/2/2006 significant changes to the Medicare Contractor Beneficiary and Provider Communications Manual (PUB. 100-09) </li></ul><ul><ul><li>30.5.1 Requires Provider Relations Research Specialists to have at least one certified coder on staff to ensure accurate expertise in response to inquires; and </li></ul></ul><ul><ul><li>DME MACs (previously DMERC) are exempt from the PRRS requirement. </li></ul></ul><ul><li>34 states from 2004-2007 held “State Coders Day” </li></ul><ul><li>Many organizations require certification at the time of hire </li></ul><ul><ul><li>Project X-Tern </li></ul></ul><ul><li>National Coding Shortage </li></ul>
    15. 15. Translation: Basic Documentation <ul><li>The Medical Record- a legal document and more </li></ul><ul><ul><li>Basic requirements for valid medical records </li></ul></ul><ul><ul><li>The “ Golden Rule ”: “not documented, not done” (or at least “not billable”) </li></ul></ul><ul><li>Authentication/Provider Signatures </li></ul><ul><ul><li>CMS requirements: CR 5971 (Transmittal #248) </li></ul></ul><ul><ul><li>Federal requirements: 42 CFR 482.24, 424.10 </li></ul></ul><ul><li>Date of service </li></ul><ul><li>Patient Identification in the Medical Record </li></ul>
    16. 16. Translation: A True Art <ul><li>The science of medical care is inherent </li></ul><ul><li>Understanding the translation of medical care into data, now that’s an Art! </li></ul><ul><li>How does it make a difference? </li></ul><ul><ul><li>ICD-9 Proves or disproves ethical valid reasoning for the services provided (validates medical necessity) </li></ul></ul><ul><ul><li>Medical Rules, Regulations and Policy: not “nice to haves” </li></ul></ul><ul><ul><li>Is reimbursement justified? </li></ul></ul><ul><ul><li>Supporting documentation- Example effects of inaccuracy for patients </li></ul></ul><ul><ul><li>Legal and Compliance implications </li></ul></ul>
    17. 17. Medical Necessity <ul><li>Medically Necessary v. Medically Appropriate </li></ul><ul><ul><li>Medically Appropriate- a service that a clinician feels will benefit the patient’s health and well being; </li></ul></ul><ul><ul><li>Medical Necessity is required for a specific insurance benefit; </li></ul></ul><ul><ul><ul><li>The service may benefit the patient, but it may not be a covered benefit under the insurance plan; </li></ul></ul></ul><ul><ul><ul><li>Medical Policies exist to provide a guideline for coverage and payment; and </li></ul></ul></ul><ul><ul><ul><li>Policies can be challenged and modified if proven inadequate. </li></ul></ul></ul>
    18. 18. Medical Necessity: Coding Tells a Story… <ul><li>Story 1: </li></ul><ul><ul><li>CPT Procedure is for a Throat Culture </li></ul></ul><ul><ul><li>ICD-9 Code states High Cholesterol </li></ul></ul><ul><ul><li>This does not paint the picture of necessity </li></ul></ul><ul><ul><li>ICD-9 of a “Sore Throat” does. </li></ul></ul><ul><li>Story 2: </li></ul><ul><ul><li>CPT procedure code states Gastric By-pass </li></ul></ul><ul><ul><li>ICD-9 indicates Obesity </li></ul></ul><ul><ul><li>May be for the patient’s well being, but may not be medically necessary. </li></ul></ul><ul><ul><li>(Any argument? Therein lies the appeals process!) </li></ul></ul>
    19. 19. Translation: A True Art <ul><li>How does it make a difference? </li></ul><ul><ul><li>HCPCS/CPT Describes EXACTLY, what service is rendered </li></ul></ul><ul><ul><li>Drive determination for covered benefits </li></ul></ul><ul><ul><li>Details service level and type </li></ul></ul><ul><ul><li>Time and complexity involved </li></ul></ul><ul><li>Code Data is used to determine “outliers” </li></ul>
    20. 20. Translation: Where the money is… <ul><li>Modifiers- alter or adds information to the service </li></ul><ul><ul><li>Informational modifiers (Ex: GC, GA, KH, GY) </li></ul></ul><ul><ul><li>Payment modifiers (Ex: 22, 58, 59) </li></ul></ul><ul><li>Quantity </li></ul><ul><li>Place of Service (office 11 v. outpatient 21) </li></ul><ul><li>PQRI </li></ul>
    21. 21. Compliance: Common Deficiencies <ul><li>OIG Workplan- Annually provides a framework for suspected high risk payment concerns. </li></ul><ul><li>Common industry-wide findings overview: </li></ul><ul><ul><li>Consultations </li></ul></ul><ul><ul><li>Wound Care Services </li></ul></ul><ul><ul><li>“Incident to” services </li></ul></ul><ul><ul><li>Physicians at Teaching Hospitals (PATH) </li></ul></ul><ul><ul><li>E&M Levels and typical Bell Curves </li></ul></ul>
    22. 22. Common Deficiencies (continued) <ul><li>Common industry-wide findings overview: </li></ul><ul><ul><li>Separate payment of E&M in addition to other services </li></ul></ul><ul><ul><li>Modifier usage </li></ul></ul><ul><ul><li>Diagnosis linking and assignment </li></ul></ul><ul><ul><li>Chiropractic Services and medical necessity </li></ul></ul><ul><ul><li>Clinical Trial Billing (continued risk area) </li></ul></ul>
    23. 23. Common Audit Findings <ul><li>Misrepresentation of the level of service rendered and documented (“over/under E/M coding”); </li></ul><ul><li>Use of modifiers to “get the claim paid”: </li></ul><ul><ul><li>Modifiers 25, 59; and the Anatomical modifiers; </li></ul></ul><ul><ul><li>Unbundling; </li></ul></ul><ul><li>Use of modifiers for higher reimbursement: </li></ul><ul><ul><li>Omission of modifier 26; </li></ul></ul><ul><ul><li>Modifier 22; </li></ul></ul><ul><li>Reporting inappropriate place of service; and </li></ul><ul><li>Teaching physician services: incomplete documentation. </li></ul>
    24. 24. Common Audit Findings <ul><li>Inappropriate use or not using waivers and Advanced Beneficiary Notices (“ABNs”) </li></ul><ul><li>Services billed “Incident to” for higher reimbursement without appropriate supervision/documentation </li></ul><ul><li>Misrepresentation of services </li></ul><ul><ul><li>ICD-9 used to fit medical policy, not supported </li></ul></ul><ul><ul><ul><li>238.9 v. 239.9 </li></ul></ul></ul><ul><ul><ul><li>Chiropractic services (Necessary v. Maintenance) </li></ul></ul></ul><ul><ul><li>Use of modifier KX </li></ul></ul><ul><ul><li>DME: Supplies not delivered, patient refused or provided without supported medically necessary </li></ul></ul><ul><ul><li>Misrepresenting preventive services as medically necessary </li></ul></ul>
    25. 25. RAC Audit Findings <ul><ul><li>CMS Recovery Audit Contractor (RAC) Status Document FY2007 states: </li></ul></ul><ul><li>“The Improper Medicare FFS Payments Report for November 2007 estimates that 3.9 percent of the Medicare dollars paid did not comply with one or more Medicare coverage, coding, billing, or payment rules.” </li></ul><ul><li>“This equates to $10.8 billion in Medicare FFS overpayments and underpayments.” </li></ul>
    26. 26. Coding Audit: A Lawyer’s Perspective <ul><li>Purpose or Intent </li></ul><ul><ul><li>Clearly define: What is the focus and what information is needed? </li></ul></ul><ul><ul><li>Internal: compliance plan self audit activities; routine, to determine extent of suspected problem or risk </li></ul></ul><ul><ul><li>External- discovery/self disclosure or as the result of an investigation/carrier request </li></ul></ul><ul><li>Audit Types </li></ul><ul><ul><li>Performed under Privilege... or not? </li></ul></ul><ul><ul><ul><li>It’s up to you </li></ul></ul></ul><ul><ul><ul><li>General Rule: Prepayment v. Retrospective </li></ul></ul></ul><ul><ul><li>Prepayment v. Post-payment </li></ul></ul><ul><ul><li>Probe v. Statistically Significant v. OIG Protocol </li></ul></ul>
    27. 27. Coding Audit: A Lawyer’s Perspective <ul><li>What information to request </li></ul><ul><ul><li>Charge data </li></ul></ul><ul><ul><li>Assembly of medical records </li></ul></ul><ul><ul><li>Supporting policies/procedures </li></ul></ul><ul><ul><li>Internal billing system hard edits/ auto-population of claim fields? </li></ul></ul><ul><li>What to expect </li></ul><ul><ul><li>Many great coders. Many less with consulting or broader compliance experience needed for expected deliverables with analysis </li></ul></ul><ul><ul><ul><li>(e.g. coding related compliance issues, site service, scope of practice…) </li></ul></ul></ul><ul><ul><li>Process can be time consuming during medical record assembly/delivery </li></ul></ul><ul><ul><li>Organization is key for impact on timing, fees and results </li></ul></ul>
    28. 28. Coding Audit: A Lawyer’s Perspective <ul><li>What to manage (criteria) </li></ul><ul><ul><li>Expectations </li></ul></ul><ul><ul><li>Audit definition and delivery </li></ul></ul><ul><ul><li>Organization of data/documentation </li></ul></ul><ul><ul><li>Correspondence between auditor and Client </li></ul></ul><ul><ul><li>Type, format and expectation of deliverables </li></ul></ul><ul><li>Accuracy calculations </li></ul><ul><ul><li>Volume error rate </li></ul></ul><ul><ul><li>Payment error rate </li></ul></ul>
    29. 29. Coding Audit: A Lawyer’s Perspective <ul><li>How to understand and use common findings </li></ul><ul><ul><li>Was the result statistically valid? </li></ul></ul><ul><ul><li>Was the audit performed within OIG-standards? </li></ul></ul><ul><ul><li>Do not use a probe sample for extrapolation </li></ul></ul><ul><ul><li>Always use as an opportunity to improve processes. </li></ul></ul><ul><ul><li>Always refund any agreed upon error in actual overpayments identified to the appropriate Carrier within a reasonable timeframe. </li></ul></ul>
    30. 30. OIG Workplan 2009: Sample Items <ul><li>‘Incident to’ services- qualifications of clinicians billing incident to a billing provider; </li></ul><ul><li>E&M modifier 24 use- inappropriate unbundling of visits within the surgical package; </li></ul><ul><li>Clinical Social Worker billing- payments sought in addition to the cost report; </li></ul><ul><li>Sleep study use- could lead to DME investigation for CPAP; </li></ul><ul><li>Chiropractic services- Acute v. Maintenance services. Use of Modifier “AT”; and </li></ul><ul><li>MS-DRG- patterns & trends since 10/2007. </li></ul>
    31. 31. Summary <ul><li>Coding: “Our little corner of the world” </li></ul><ul><li>Now we can understand while coding is a small piece of the big picture, it has a big impact! </li></ul><ul><li>ICD-9 = WHY </li></ul><ul><li>CPT, HCPCS= WHAT </li></ul><ul><li>ICD-9/CPT determine appropriate payment and benefit coverage. </li></ul><ul><li>Analysis of code data elements for “outliers” can lead to further investigation. </li></ul>
    32. 32. Questions?

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