Insights into Medical Coding

What do medical coders do? How about a short history of the process?

Consumers, third party payers and government regulatory agencies, both state and federal, need to know precisely as possible what is wrong with a patient and what services were provided to remedy the problem.  Medical Coding provides that information.  The universal involvement and adaptation using computers made it apparent that some method had to be devised to describe and distinguish the enormous potential of numbers and types of medical and surgical procedures, problems and diagnoses, so that various code numbers could be assigned to them to facilitate accurate and rapid determination of the specific nature and potential value of the service performed.

As a result, two types of coding systems evolved, with a third soon following:

  • The first was the "Relative Value System" of codes (RVS), designed and implemented by insurance companies.
  • The RVS codes evolved into "Current Procedural Terminology" (CPT), the codes and nomenclature for which were copyrighted by the American Medical Association in 1986).
  • The other system adopted was the "International Classifications of Diseases" (ICD).  Various versions of the ICD have been adopted, the latest of which is the ICD-10 (October 1, 2015).
  • HCPCS, a third coding system, was developed by HCFA (Healthcare Financing Administration), now called Center for Medicare/Medicaid Services (CMS). This code system includes CPT codes, National codes, and Local codes. CPT codes are considered to be the Level I of HCPCS. They are published yearly by the American Medical Association and are used for billing procedures and services performed by physicians. HCFA adopted the CPT as the standard for coding procedures.

ICD & CPT Codebooks

ICD codes have tabular and alpha lookups for diagnoses.  

CPT codebooks have descriptive terms and identifying codes (using time and risk factors calculated by units) for reporting medical services and procedures performed by providers. The purpose was to provide a uniform language, which accurately designated medical, surgical, and diagnostic services, and thus establish effective means for reliable nationwide communication among providers, patients and third party payers (i.e., insurance companies - or government entities such as Medicare and Medicaid).

Coder Responsibility

The coder reviews medical information and derives the procedure and diagnosis codes. These codes are then input to computer systems and are billed to payers. Coding Policies (CCPs) have been developed consistent with the coding systems devised. The coder's job is to comply with the CCP (Correct Coding Policy). CMS ultimately implemented a policy for returning claims to medical offices if codes were incorrect. Under this policy, they designated several dozen items, which must be present and valid for a claim to be processed. If any of the information required was missing or invalid, the claim was to be kicked out of the system as unprocessable.  Unprocessable is not the same as a denial or a rejection. It means "we're not even looking at this claim until you give us the information we asked for." Most of the guidelines set up dealt with CPT (procedure codes) codes; however, because ICD is such a vital part of any claim form, the ICD accuracy has been mandated as well.

Medical necessity is a key factor in determining payment criteria. The coder has to demonstrate the medical necessity for the services provided. Thus ICD coding is one of the items that must be present and valid on the claim form for the claim to be processed. The ICD diagnostic code tells the payer why the encounter occurred.

One of the biggest reasons claims come back is because providers fail to properly describe using specific up to date ICD codes as to why certain procedures were performed. When insurance companies send these claims back, doctors really feel the economic crunch. Even if a claim makes it through this initial editing process, it can still be denied or down-coded if the wrong code is used. In addition to checking claims for missing information, all carriers also have a software editor in their claims processing systems, which will check for incompatible coding combinations. If the diagnosis codes do not justify the procedure and supply codes, the claim is likely rejected even if "processed." Typically, as the system developed and refined, the government rarely provided sufficient instructions to providers as to how to properly use the coding system guidelines and only enforced the guidelines sporadically and leniently. That has all changed with the perfection of the process. Now they are telling the doctors: "Get it right the first time or suffer the consequences."

Understanding What You Code

Understanding what you code is the most fundamental part of coding. This doesn't include being able to diagnose patients or practice medicine, but you need to understand the diagnoses you choose sufficient to be comfortable. All too frequently the diagnosis the physician has written cannot be found exactly that way in the codebooks. In such a case, it is helpful to have the reference books you need for the terminology, e.g., a good medical dictionary and some physiologic references.

Remember, that as a coder, your job is to accurately reflect what occurred in a medical encounter and show through the coding process the reasons (medical necessity) for any procedure, and address the complexity of evaluation and management codes (E & M CPT codes) utilizing the proper coding.

Part of the evolutionary process of coding now requires you to match the ICD codes with the procedure codes. If you don't fully understand what the medical problem, test, exam or treatment may be how will you know the answers?

Medical Necessity

Medical necessity is a determination (by third party payers) that items or services furnished are reasonable and medically necessary for the treatment provided. Part of that determination is discovered with the diagnoses submitted. CPT codes show what service was performed and the ICDs provide the information that determines whether or not a payment will be made.

For years, CMS (Center for Medicare-Medicaid Services) has warned the physician to be specific and file correctly; this means document records fully, be unfailingly accurate with code assignments, use the required number of digits and link the diagnosis and procedure code. The grace period is now over. You do it Medicare's way or suffer the consequences (lowered reimbursement, claims rejection or complete denial).

Documentation

When the physician does not provide enough information for the coder, the coder cannot provide enough information to the insurance carrier. The physician has to clearly and carefully document all diagnoses in detail sufficient for the coder to translate that information into specific and accurate codes reflecting as much detail and precision as the documentation provided and the ICD system allows. Here are some responsibilities the physician has in order for the coder to able to assign correct codes.

  1. Write legibly or dictate the information.
  2. Describe the patient's condition using terminology including specific diagnoses as well as symptoms, problems or reasons for the encounter.
  3. Remember you are submitting only numbers not narrative descriptions. Somewhere in the patient record must be specific and explicit information about what diagnoses were treated and what services were provided. The notes should be clear and detailed, noting any sites, type, cause that specifies the exact diagnosis.
  4. All conditions or problems need to be documented which were present at the time of the visit that would impact the treatment or management of the patient. The coder must be able to adequately convey the patient encounter information to the carrier to justify the services provided.
  5. Each diagnosis must be related to a specific procedure(s). The coder links these. 

Ethical Standards For Coding

In this era of payment based on diagnostic and procedural coding, the professional ethics of health information continue to be reviewed and often challenged. The ethics were developed by American Health Information Management Association (AHIMA). They include:

  1. Diagnoses that are present on admission or diagnoses and procedures that occur during the current encounter are to be abstracted after a thorough review of the entire medical record. Those diagnoses not applicable to the current record encounter should not be abstracted.
  2. For inpatient settings, the selection of the principal diagnosis and procedure, along with other diagnoses and procedures, must meet the definitions of the Uniform Hospital Discharge Data Set (UHDDS). The hospital will have a profile for you to review for those data.
  3. Assessment must be made of the documentation in the chart to ensure it is adequate and appropriate to support the diagnoses and procedures selected.
  4. Medical record coders should use their skills and knowledge of ICD-9-CM and CPT, and any available resources to select diagnostic and procedural codes.
  5. Medical record coders should not change codes or narratives of codes so that the meanings are misrepresented, nor should diagnoses or procedures be included or excluded because the payment will be affected. Statistical clinical data is an important result of coding and maintaining quality databases should be a goal. 
  6. Physicians should be consulted for clarification when they enter conflicting or ambiguous information in the chart.
  7. The medical record coder is a member of the health care team and, as such, should assist physicians who are unfamiliar with ICD-10, or DRG methodology by suggesting resequencing or inclusion of diagnoses or procedures when needed to more accurately reflect the occurrence of events during an encounter.
  8. The medical coder is expected to strive for the optimal payment to which the facility or doctor is legally entitled, but it is unethical and illegal to maximize payment by means that contradict regulatory guidelines.
  9. In outpatient settings, the reason for the encounter is coded first. If the major work or effort is directed at another diagnosis, that diagnosis may become primary. 

Coders have become an integral part of the medical reimbursement process. In addition, the data obtained through the codes themselves provide the major resource for healthcare planning, budgets, peer review, and statistical demographic disease and outcome information. It is a very interesting occupation and the need for coders increases steadily.