HI 225 Ch02 pp ts.ab202017

1. © 2018 American Health Information Management Association© 2018 American Health Information Management Association
Principles of Healthcare Reimbursement
Sixth Edition
Anne B. Casto, RHIA, CCS

2. © 2018 American Health Information Management Association
Chapter 2
Clinical Coding and Coding Compliance
• Learning Objectives
– Differentiate the different code sets approved by
the Health Insurance Portability and
Accountability Act of 1996
– Describe the structure of approved code sets
– Illustrate how diagnosis coding is used in risk
adjustment models
– Know the coding compliance issues that influence
reimbursement
– Explain the roles of various Medicare improper
payment review entities
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3. © 2018 American Health Information Management Association
Clinical Coding & Reimbursement
Connection
• Code sets are used to communicate
health status and services from providers
to third-party payers (TPP)
– Allows for consistent communication
• Code sets are used by TPP to determine
reimbursement for services and
procedures
– Allow for efficient payment process
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4. © 2018 American Health Information Management Association
Approved Code Sets
• Code sets used to transmit health services
are standardized via the Health Insurance
Portability and Accountability Act of 1996
(HIPAA)
– ICD-10-CM/PCS
– HCPCS Coding System
• CPT
• HCPCS Level II
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5. © 2018 American Health Information Management Association
Coding Knowledge
• HIM professionals must have a baseline
understanding of code sets to fully
understand the various Medicare
prospective payment systems (PPS)
• Physicians and facilities must comply with
guidelines and conventions (rules)
published for the approved code set
– Receive accurate reimbursement
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6. © 2018 American Health Information Management Association
International Classification of Diseases
ICD
• Maintained by the
World Health
Organization
(WHO)
• Used throughout
the world for
mortality reporting
• Updated
approximately
every 10 years
ICD-10
• Current
international
version of ICD
• Used by the CDC
for acute illness
and mortality
reporting
• Adopted by many
countries including
Australia and
Canada
ICD-10-CM
• Clinical
modification of
ICD-10 (10/1/2015)
• Modifications made
by the National
Center for Health
Statistics (NCHS)
• Expanded to
include morbidity
and chronic
conditions
• Used to report
diagnoses in ALL
healthcare settings
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7. © 2018 American Health Information Management Association
ICD-10-CM Structure
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Category Code
Subcategory Codes
S10.11XA, Abrasion of throat, initial encounterICD-10-CM Code

8. © 2018 American Health Information Management Association
ICD-10-PCS
Developed in the United States to report procedures
Implemented 10/1/2015 (new methodology)
Unique methodology and code structure for reporting
procedures (different from rest of the world)
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9. © 2018 American Health Information Management Association
ICD-10-PCS Structure
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ICD-10-PCS code - 02BG0ZX, Mitral valve biopsy

10. © 2018 American Health Information Management Association
ICD-10-CM/PCS
• Morbidity and mortality reporting for statistics
• Classify diagnosis and procedures for research
• Index records by disease and surgical procedure
• Report information for healthcare reimbursement
systems
• Analyze resource consumption patterns
• Analyze the adequacy of reimbursement
• Quality metrics
Uses
• Hospital inpatient: Medicare severity diagnosis-related
groups (MS-DRGs)
• Hospital rehabilitation: Case Mix Groups (CMG)
• Home health: Home Health Resource Groups
(HHRGs)
Reimbursement
Methodology
Examples
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11. © 2018 American Health Information Management Association
ICD-10-CM/PCS
Maintenance
ICD-10-CM/PCS
Coordination and
Maintenance Committee
NCHS maintains ICD-
10-CM
CMS maintains ICD-10-
PCS
Guidelines
ICD-10-CM/PCS Official
Coding Guidelines for
Coding and Reporting
posted on CMS and
NCHS websites
Many code book
publishers include
Official Coding
Guidelines in the code
books
Advice
Cooperating Parties:
NCHS, CMS, AHIMA,
AHA
Coding Clinic for ICD-
10-CM and ICD-10-PCS
Published quarterly
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12. © 2018 American Health Information Management Association
HCPCS
Healthcare
Common
Procedure Coding
System
Level I - CPT Level II - HCPCS
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13. © 2018 American Health Information Management Association
Current Procedure Terminology
• CPT
– Report diagnostic and surgical procedures
and services
– Created and published by the American
Medical Association (AMA) in 1966
– Adopted by HCPCS in 1985 and became
known as HCPCS Level I for Medicare
reporting
– Now in the 4th version
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14. © 2018 American Health Information Management Association
CPT in Various Settings
Used by Physicians Used by Facilities
Inpatient services and procedure Ambulatory surgery services and
procedures
Ambulatory surgery services and
procedure Emergency department services and
proceduresEmergency department services and
procedures
Outpatient services and procedures Clinic services and procedures
Office services and procedures
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15. © 2018 American Health Information Management Association
CPT Structure
Category I
• Services and
procedures
• 5-digit
numeric
codes
• 13100,
Repair,
complex,
trunk; 1.1 cm
to 2.5 cm
Category II
• Data
collection
codes
• 5-character
alphanumeric
codes
• 1000F,
Tobacco use
assessed
Category III
• New
Technology
codes
• 5-character
alphanumeric
codes
• 0085T,
Breath test
for heart
transplant
rejection
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16. © 2018 American Health Information Management Association
CPT Coding Guidelines
• Official Coding Guidelines are provided
throughout the code set
• Guidance and advice
– Published by the American Medical
Association (AMA)
• CPT Assistant
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17. © 2018 American Health Information Management Association
Healthcare Common Procedure
Coding System
• HCPCS, Level II
– Created in 1983
• National codes developed by CMS
• Alphanumeric codes
• Represent supplies and services not included
in CPT
– Drugs
– Durable medical equipment
– Supplies
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18. © 2018 American Health Information Management Association
Sample HCPCS Level II Codes
Code Code Description
A4215 Needle, sterile, any size, each
C8903 Magnetic resonance angiography without contrast, abdomen
G0378 Hospital observation service, per hour
J1644 Injection, heparin sodium, per 1000 units
Q9958 High osmolar contrast material, up to 149 mg/ml iodine
concentration, per ml
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19. © 2018 American Health Information Management Association
HCPCS Coding Advice
• American Hospital Association (AHA)
– Central office on HCPCS
– AHA Coding Clinic for HCPCS
• Provides expert advice
• Only official resource for HCPCS Level II
reporting requirements for Medicare billing
are coverage determinations issued by CMS
and its Medicare Administrative Contractors
(MACs)
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20. © 2018 American Health Information Management Association
Risk Adjustment Coding
• CMS hierarchical condition categories
(CMS-HCC) model
– Uses demographic and health status to
predict future healthcare expenditures
– ICD-10-CM diagnosis codes are used to
determine the patient’s health status
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21. © 2018 American Health Information Management Association
Risk Adjustment Coding
Start of
Calendar Year
Patients are
treated by
physicians
Documentation
is coded, HCC
ICD-10-CM
codes identified
Health status is
established
Payment rates
set based
CMS-HCC
model
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22. © 2018 American Health Information Management Association
Risk Adjustment Coding
• High quality provider documentation is
required for HCC coding
• Well-trained coders are ideal candidates
for risk adjustment coder positions
• See figure 2.5, Case Study for HCC
documentation and coding, in textbook
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23. © 2018 American Health Information Management Association
Coding Compliance
Compliance
Perform one’s job
functions according to
the laws, regulations,
and guidelines set
forth by Medicare and
other TPP
AHIMA Standards for
Ethical Coding
Provided at the end of
the chapter
Fraud
Intentional
representation that an
individual knows to be
false or does not
believe to be true,
knowing that the
representations could
result in unauthorized
benefit to themselves
or some other person
Billing for a service
that was not provided
to the patient
Abuse
Unknowing or
unintentional
submission of an
inaccurate claim for
payment
Reporting the wrong
ICD-10-CM diagnosis
code
Reporting the wrong
CPT procedure code
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24. © 2018 American Health Information Management Association
Legislative Background
False Claims Act
Operation Restore Trust (1995)
OIG Compliance Program Guidance (1991-98)
Medicare Integrity Program (HIPAA,1996)
Balanced Budget Act (BBA) 1997
Improper Payment Legislation (2002-2013)
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25. © 2018 American Health Information Management Association
Oversight of CMS Claims
Payments
• Medicare Review and Education Program
– Allows CMS contractors to conduct improper
payment reviews
• See figure 2.6 in the textbook
– Prepayment and post-payment reviews
– Provide education via
• Medical review
• Provider outreach and education
– Goal: to reduce provider errors
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26. © 2018 American Health Information Management Association
Oversight of CMS Claims
Payments
• Progressive Corrective Action (PCA)
– Data analysis
– Error detection
– Validation of errors
– Provider education
– Determination of review type
– Sampling of claims
– Payment recovery
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27. © 2018 American Health Information Management Association
Improper Payment Review Programs
Comprehensive Error
Rate Testing
• CERT
• Measures error rate
• Improper payments
• Should not have
been made
• For an ineligible
recipient
• For an ineligible
service
• Duplicate payment
• Service was not
provided
• Incorrect amount
was paid
Office of Inspector
General
• OIG Work Plan
• Provide education
and develop polices
and procedures
• Published focus
areas for OIG
departments
• Office of Audit
Services
• Office of
Evaluation and
Inspections
• Office of
Investigations
• Office of Counsel
to the Inspector
General
National Recovery
Audit Program
• Referred to by many
as RACs
• Prevent future
improper payments
• Recover improper
payments
• 5 components
• Ensure accuracy
• Ensure efficiency
and effectiveness
• Maximize
transparency
• Minimize provider
burden
• Develop provider
education
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28. © 2018 American Health Information Management Association
Coding Compliance Plan
• Correct coding (Unbundling, upcoding)
• Correct use of encoder software
• How to query physicians for clarification
Polices and
Procedures
• Payer guidelines
• Medicare manuals
• Official coding guidelines
Education
and Training
• Internal benchmarking
• External benchmarking
• Audit and monitor coding quality
Auditing and
Monitoring
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