Which coding system is used to report procedures and services on claims *?

Documentation Guidelines

Documentation required to meet the threshold to use these codes can be existing problems assessed for stability versus change (e.g., glaucoma suspect follow-up) or can be new presenting problem with possible worsening (e.g., possible conversion to wet AMD from previously dry AMD). Any diagnostic tests ordered or reviewed (lab, radiology, or clinical ancillary eye tests such as OCT), and review of past records from old notes or history from patient should be written.3 Moreover, provider documentation should indicate both new and existing problems and whether these are stable or changing, review of appropriate testing to assess stability versus change, and medical assessment and treatment plan including any over-the-counter or prescription medications, non-pharmaceutical treatment management, any lab, radiology, or clinical testing ordered, and the resultant treatment plan.3

If the video component is lost and the practitioner finishes the encounter via the phone only, then the practitioner must decide which exam type best describes this encounter.1 The practitioner should not bill both an E/M or an Eye code (with Modifier 95) in conjunction with a phone code. The practitioner should choose one or the other. The practitioner should document the time spent in each modality. The level of code is based on this time. There are no strict criteria based on time in each modality that mandates the use of one code or the other. However, the code used should represent the nature of the exam which will most likely reflect the time spent in each modality to some extent. As mentioned earlier, a reasonable rule of thumb would be to consider when vision is assessed. If the video component is present through the vision check, then it might be reasonable to consider the encounter best represented by the synchronous codes listed above. If the video component is lost before the vision is checked, then it might be reasonable to consider the phone code to best represent the encounter. As there is not a clear demarcation to make this decision, this is also a scenario in which it is reasonable to include the clinic or facility coding entity regarding any “rule of thumb” approach that is utilized by the practitioners when making this decision.

Fees and Third-Party Reimbursement

In the United States, there is no CPT code designated specifically for prolotherapy. The Healthcare Common Procedure Coding System (HCPCS) code M0076 is available for reporting prolotherapy, defined as injection of sclerosing solutions into the joints, muscles, or ligaments in an attempt to increase joint stability. However, Medicare does not cover the service and states that the medical effectiveness of the therapy has not been verified by scientifically controlled studies; services are therefore denied on the grounds that they are not reasonable and necessary treatment.31 An Advance Beneficiary Notice must be executed for a Medicare patient to pay for the service out of pocket. Other third-party payers may also consider prolotherapy to be investigational and should be contacted before billing to determine their policy for this service. The unlisted procedure CPT code 20999 with a description of the procedure clearly indicated on the claim may also be used for billing purposes.

Physicians who offer prolotherapy may choose not to bill third-party payers and simply charge a fee that must be paid out-of-pocket by the patient. A single treatment session typically costs $250 to $500. Other physicians who offer prolotherapy may choose to deliver it using related injection codes that describe various aspects of this procedure, including CPT code 20550 (injection, single tendon sheath or ligament), 20551 (injection, single tendon origin/insertion), 20552 (injection, trigger points in one to two muscles), or 27096 (injection, sacroiliac joint, unilateral). Anecdotally, the validity of this billing method has been questioned by some third-party payers as an attempt to circumvent noncoverage policies for HCPCS code M0076.

In some cases, prolotherapy may be covered by automobile insurance medical payment riders. A survey of patients with chronic pain (including CLBP) who had used prolotherapy reported that insurance coverage paid part of the cost in 88% of cases; the billing methods used by physicians for those patients were not reported.9 Patients had paid some cost out-of-pocket in 19% of cases; mean out-of-pocket costs in the past year for prolotherapy were $365.9

Procedure Codes

A medical bill submitted to an insurer for payment needs to describe the medical procedure/service that is being billed. The common language that is used in the United States to communicate the vast majority of procedures is called CPT, for current procedural terminology, a registered trademark of the AMA. The AMA owns and maintains CPT. The first edition was published by the AMA in 1966 when the (then new) Medicare program needed a terminology for describing medical services. To this day, CMS, which administers the Medicare program for DHHS, agrees via contract with the AMA to use the CPT codebook as the main source of codes and descriptors for processing medical claims. With the implementation of the HIPAA regulations in 2003, CPT became the language that must be used by all providers, government agencies, and private insurers.

According to the AMA, the objective of CPT is to provide “a uniform language that will accurately describe medical, surgical, and diagnostic services, and will thereby provide an effective means for reliable nationwide communication among physicians, patients, and third parties.”10 A CPT code has been assigned to virtually every type of physician and laboratory service, including cytologic slide preparation and interpretation. (For example, CPT code 10021 describes the procedure of performing an FNA without image guidance.) CPT codes describe even the most complex of medical procedures in the form of a simple 5-digit numeric code. Tell a knowledgeable person, for example, that you just performed an 88164, and he or she will know immediately that this was a manual screening of a cervical/vaginal smear (not a liquid-based preparation); that Bethesda terminology was used to report the result; and that the procedure included only the so-called technical component (staining, coverslipping, CT review, but not a pathologist’s interpretation)—all this from a 5-digit code!

CPT codes are the foundation for determining facility (“technical”) and physician (“professional”) payments, in conjunction with Medicare’s Resource-Based Relative Value System (RBRVS) or its clinical laboratory fee schedule (CLFS). The RBRVS is a system for comparing the relative value of medical services across all specialties, based on work, practice expense, and other factors. By doing so, the RBRVS establishes a relative value unit (RVU) for every current medical procedure. The dollar value of any given medical service or procedure is determined by its composite relative weight, multiplied by a nationally set (by CMS) dollar conversion factor. The RVUs and conversion factor for physician services are published annually in the Federal Register by CMS. Various geographic cost-of-living adjustments and other factors are also applied to obtain the specific allowed charge for any given procedure and locale, and therefore the process is not so simple as multiplying an RVU by the conversion factor. (It is not within the scope of this chapter to elaborate on the detailed formula.) CMS provides an allowed charge lookup system on its website. Medicare’s CLFS is briefly described below in conjunction with Pap test technical services.

HCPCS codes are a separate set of codes used to describe drugs, supplies, and certain other services not included in CPT. Like CPT codes, HCPCS codes have 5 characters, but the first is a letter and the rest are numbers (e.g., G0123). The HCPCS codes are administered not by the AMA but by CMS. Responsibility for maintaining and updating them is vested in a national panel composed of representatives from CMS, the Blue Cross and Blue Shield Association, and America’s Health Insurance Plans. Cytologists need to be concerned with only a small number of HCPCS codes, those for routine and high-risk Pap tests for Medicare beneficiaries.

In some circumstances, CPT and HCPCS codes require the use of modifiers to avoid filing a false claim and to assure accurate and prompt payment by payers. A complete discussion of modifiers is beyond the scope of this chapter, but familiarity with the concept of modifiers is important. Some commonly used modifiers for cytology cases deserve mention.

CPT Modifier 26. This is the most widely used in pathology. It denotes that only the physician professional component of the service is being billed.

CPT Modifier 52. This modifier denotes a reduced service from the customary procedure. In cytology, a good example is the manual review of a slide that was intended for evaluation by the ThinPrep Imaging System but rejected for technical reasons. A laboratory can still bill the automated screening code 88175, but with modifier 52 (i.e., 8817552).

CPT Modifier 59. Modifier 59 denotes a “separate procedure,” such as a different specimen (e.g., washing versus brushing) or anatomic site. Payers often require this modifier when two or more codes are considered mutually exclusive or duplicative. For example, reporting 8810459 for a direct smear bronchial brushing with 88108 for a cytospin bronchial washing is often necessary to avoid having the former charge denied.

HCPCS Modifier GC. Teaching physicians must append modifier GC to CPT and HCPCS codes on Medicare claims when a resident or fellow actively participates in performing the underlying medical service. The modifier declares that the teaching physician personally performed the “critical” portion of the procedure and is thus entitled to bill for it.

HCPCS Modifiers GA, GY and GZ. These modifiers are applied to Pap test HCPCS codes when billing Medicare. They clarify the laboratory’s right (or lack thereof) to bill the Medicare beneficiary for the charge if it is denied by the contractor.

HCPCS Modifier TC. This modifier denotes the facility technical component of the service being billed, and thus is the counterpart of the CPT 26 modifier.

A few points about procedure codes are worth noting:

Just because a code is printed in CPT or HCPCS does not mean it is a covered service. Coverage decisions are made by the U.S. Congress, state legislatures, and private insurers. Coverage limits might also be imposed by participation agreements made with managed care companies and private insurers.

The AMA and CMS sometimes have conflicting interpretations on the scope and meaning of the CPT codes. Historically, the AMA was the sole authority everyone, including CMS, looked to for guidance in using CPT codes. In 1996, CMS launched its National Correct Coding Initiative (NCCI). Since then, the AMA and CMS have diverged in ways that affect a number of pathology-related procedure codes. The result: “AMA-CPT rules” and “CMS-CPT rules.” The nongynecologic cytology procedure codes 88104 (direct smears) and 88108 (cytospin) are a good example. CMS says it is not medically necessary to use both types of preparations for one nongynecologic cytology specimen, and therefore you are only permitted to bill 88108 to CMS, even if you examined both preparations. By contrast, the AMA considers both procedures billable, even when they relate to the same specimen. How should one deal with such discrepancies? You should adhere to CMS policy if billing a service to a Medicare Administrative Contractor (MAC) (“render unto Caesar…”). You should also adhere to CMS policy for Medicaid, TriCare, Medicare Advantage, and private insurer accounts if they specify that you should adhere to Medicare CPT policies. If they do not, follow their specific instructions (if any), or follow the AMA rules if the insurer does not name a CPT authority.

You should always use only the most recent version of the CPT codebook. The so-called Category I CPT codes that account for the vast majority of the codes you will use are updated effective January 1 every year, and every year some edits are made that affect pathology codes.

Billing Instructions

The following are the main CPT codes for billing of foot and nail care services (additional codes can be found in the HCPCS/CPT code book):

11719: Trimming of nondystrophic nails, any number

11720: Debridement of nail(s) by any method(s); one to five

11721: Debridement of nail(s) by any method(s); six or more

11730: Avulsion of nail plate, partial or complete, simple; single

11732: Avulsion of nail plate, partial or complete, simple; each additional nail plate (list separately in addition to code for primary procedure).

An Advanced Beneficiary Notice (ABN) should be given to the patient when the physician has good reason to believe that the foot procedure might not be covered by CMS or the third-party carrier. It allows the patient the opportunity to make an informed decision whether or not to allow the physician to perform a procedure for which the patient might be personally financially responsible. If the patient is not presented with the ABN in these situations, subsequent billing of the patient when the procedure is denied could be unlawful (July 31, 2002 CMS transmittal AB-02-114).

Example: A Medicare-qualified at-risk diabetic patient insists on having routine foot care performed every 30 days, but Medicare does not allow reimbursement of such qualified services at treatment intervals of less than 61 days. While CMS carriers have the right, given the appropriate circumstances, to bypass the edit and reimburse qualified foot services on a more frequent basis, the likelihood of this occurring is remote at best. Because qualified routine foot care is a benefit of the Medicare program, a claim of “in between covered services” would need to be submitted to Medicare, and the patient would need to be informed via the reading and signing of an ABN that if Medicare does not reimburse the service, the patient agrees to be financially liable for the service. A complete list of ABN requirements is available in §1862 of the Social Security Act (Codingline Print October 2002).

Costs and Cost-Effectiveness

Radiopharmaceuticals are expensive. At our institution, the reimbursement paid by Medicare for strontium is $3499.76 (trade name Metastron, Current Procedural Technology [CPT]/Healthcare Common Procedure Coding System [HCPCS] code A9600) and for samarium is $7454.58 (trade name Quadramet, CPT/HCPCS code A9604); insurance typically reimburses all or most of the cost. The professional fee for administration is $324.59 (CPT Code 79101, treatment of painful bone metastases). In general, these medications are considered cost-effective because the associated reduced analgesic and hospital use offset the cost the of radionuclide.22 One report recommends that treatment be given to patients with prostate cancer who are in hospice and have good performance status (Karnofsky 60 or higher, Eastern Cooperative Oncology Group [ECOG] 0 to 1, or up and ambulatory), because they are most likely to benefit and live long enough to justify the cost.23 Given the large initial expense, it is unlikely that any hospice in the United States could afford to give these medications under their capitated payment system. However, given the reduction in need for analgesic medications in the 3 to 6 months after treatment, it may be appropriate to give them immediately before a patient is enrolled in hospice.

Coding of medications and diagnosis in administrative databases

The terminology coding system of each database may be different. For diagnosis, examples of coding systems include SNOMED-CT from the SNOMED International for conditions and diagnoses (https://www.snomed.org); READ codes that are mainly used by the UK primary care system; and the International Classification of Diseases, Ninth or Tenth Revision (ICD-9 or ICD-10). For procedure codes, in addition to the ICD procedure codes, some use the Current Procedural Terminology, Fourth Edition (CPT-4) codes, and Healthcare Common Procedure Coding System (HCPCS) codes. Previous efforts have attempted to harmonize the terminology codes from different systems [25].

Many databases use their own domestic coding systems for medications. Some databases have mapped their domestic medication codes with internationally recognized coding systems such as RxNorm, US National Drug Codes (NDC), and/or Anatomical Therapeutic Chemical (ATC) Classification System. Even within the same system/country, outpatient dispensed medications may use different coding systems than inpatient dispensed medications. For example, outpatient fills use NDC while biologics within hospital systems may use HCPCS or CPT codes (HCPCS for Medicare specifically).

Databases that are described previously in this Chapter mostly use ATC for medication codes, with the exception of Hong Kong CDARS where the British National Formulary (BNF) code is used. In terms of diagnosis, the UK CPRD uses READ code, and the rest of the databases used ICD-9 and/or ICD-10. Table 18.3 summarizes the medication and diagnosis coding systems for different databases.

Table 18.3. Medication and diagnosis coding system for different databases.

DatabaseCoding system for medicationCoding system for diagnosisSouth Korea NHISATCICD-10Taiwan NHIDATCICD-9United Kingdom CPRDATC, BNFREADSpain BIFAPATCICD-9Hong Kong CDARSBNFICD-9, ICD-10

Current procedural terminology codes

In medicine, one of the major hurdles to development of 3D printed anatomic models and guides has been a lack of reimbursement. Obtaining reimbursement for a new service through governments and private insurance is a multiyear process which takes significant organization as well as institutional support and patience. It is about a 2- to 3-year process at best to go from CPT code application to inclusion in the Medicare Fee Schedule. Medical centers creating models for clinical care need to be able to absorb the cost of the models before they are able to create enough to demonstrate the models’ efficacy. Development funding at many medical centers has been able to help bridge the gap between the cost of creating 3D printed models and insurance reimbursement.

In the United States (US), medical reimbursement is a complex process. It is overall based on the assumption that it is paying for physician or healthcare provider work and the resources used for medical services and procedures. Each of these services and procedures is itemized and has a specific code and reimbursement attached to them. The Healthcare Common Procedure Coding System (HCPCS), maintained by the Centers for Medicare and Medicaid Services (CMS), is ultimately in charge of developing, reviewing, and updating these codes. HCPCS is divided into two levels. HCPCS level I codes consist of the CPT codes which are set and published by the American Medical Association (AMA), whereas HCPCS level II codes use the HCPCS alphanumeric code and generally include nonphysician products, supplies, and services not included in CPT. CPT codes are currently accepted as the standard for healthcare providers throughout the US to report medical procedures and services.

CPT codes were first established by the AMA in 1966 and were used to help set standard terms and descriptors to document medical procedures. They were not initially associated with reimbursement. Over the next decades, the CPT codes were updated regularly and became more detailed. As the CPT system evolved, it became the national coding system for healthcare provider services and procedures in 2000. The CPT codes are regularly reviewed and updated by the CPT Editorial Panel which meets three times a year. The panel is made up of 17 members including healthcare and insurance providers, hospitals, and CMS. They are supported by the CPT Advisory Committee, a large group made up of multiple major medical societies and organizations representing healthcare providers, and act as a resource for the CPT Editorial Panel. There are high standards for requirements of confidentiality and disclosure of any conflict of interest for the panel.1

There are currently three CPT code categories: Category I, II, and III. Category I CPT codes are established medical services and have met the requirements of wide clinical use and documented efficacy. Category I CPT codes use the familiar five-digit codes for healthcare provider services. For example, the code 74177 is used for computed tomography (CT) of the abdomen and pelvis with contrast, and the code 74178 is used for CT of the abdomen and pelvis, with and without contrast. Category I codes are billable for reimbursement.

Category II codes are supplemental tracking codes for reporting quality performance measures that reflect good clinical care. The reporting of Category II codes is optional, and these codes are not used in place of Category I codes. Category II codes contain five characters—the first four are numerical, followed by an alphabetical fifth character, the letter “F.” These codes are not associated with any relative value units (RVUs); therefore, they are billed with a $0 billable charge amount. Although not reimbursed, the use of Category II codes is expanding as the emphasis on quality care grows.

Category III CPT codes were established in 2001 and are used for data collection for emerging technologies that are not yet mature and do not yet meet Category I criteria. They need to show medical specialty support, peer-reviewed literature showing growth, and ongoing clinical studies to evaluate their efficacy. When approved, they are assigned a four-digit code followed by the letter “T” as an identifier. The Category III codes are used to demonstrate how widespread their use is and for data collection in investigational protocols. They are only voluntarily reimbursable and RVUs are not assigned to them. Under HIPAA, Category III codes, though, are accepted by all healthcare payers. Local payments may be sought from local insurance carriers or through local Medicare contractors. Category III codes are temporary and can only be used for 5 years. After that time, they sunset if not converted into Category I codes. A 5-year extension for Category III codes may be obtained if approved by the CPT Editorial panel.2,3

10.6 Summative ontologies: DRG

We conclude this tour of ontologies with what we call a “summative” ontology in the form of diagnosis-related groups (DRGs).11 We call this a “summative” ontology because the goal is to abstract patient encounters away from specific procedures and granular diagnoses and into a category that reflects the difficulty and general care pathway required for managing that patient encounter. As we discussed in Chapter 1, DRGs were born out of an effort to move from fee-for-service clinical reimbursement toward a “capitated” payment model wherein hospitals payments are given according to how challenging patient care is expected to be. Originating from work at Yale in the 1960s, the hope in doing this was initially to provide an accurate mechanism to monitor quality by facilitating patient grouping into broad, clinically meaningful buckets. The original DRGs consisted of 23 nonoverlapping groups called Major Diagnostic Categories (MDCs) that were partitioned in broad strokes such as major versus minor surgeries, neoplasms, trauma, etc. A logical extension of quality monitoring, the DRG system was first used to guide reimbursement in the late 1970s by the New Jersey State Department of Health and has since grown to be the principal means of abstracting patient care encounters for compensation by payers. The intention of DRGs is to incentivize hospitals to be more cost conscious by establishing a standard price for a given type of patient and patient encounter rather than paying hospitals according to an itemized bill for services rendered. The modern DRG groups patients according to diagnosis, treatment, and the expected length of stay and Groups are assigned based upon both principal and secondary diagnoses as represented by ICD codes and procedures as represented by HCPCS codes. This grouping is typically performed on patient encounters using a specific software application known as a “grouper,” which is a critical component of the hospital revenue cycle. There are actually multiple variations of the DRG system each with their own specific tweaks.

There are currently two main systems of DRG assignment, which have slightly different evolutionary origins and concerns. The Medicare Severity DRGs (MS-DRG) encompass approximately 750 groups and seek to capture the medical complexity or severity of a patient by allowing for group modifications in the form of optional “complication/comorbidity” (CC) and “major complication/comorbidity” (MCC) annotations. For example, the MS-DRG ID for “heart failure and shock without CC or MCC” is 293, while the ID for “heart failure and shock with MCC” is 291. Eligibility for CC or MCC designations is based upon certain secondary diagnoses and procedures as defined in the appendices to the MS-DRG tables published by CMS. The focus of MS-DRGs is, unsurprisingly, squarely on the Medicare population to the exclusion of other relevant groups such as children and pregnant women. Thus, an attempt to create a variant of DRGs, which was more broadly encompassing, resulted in the All Patient (AP-DRG) and subsequent All Patient Refined DRGs (APR-DRG) with APR-DRGs serving as an improvement over AP-DRGs through the incorporation of severity of illness subclasses. Thus, APR-DRGs have four basic subclasses for each DRG relating to severity of illness and risk of death: minor, moderate, major, or extreme. As with MS-DRGs these APR-DRGs are assigned first by identifying the principal DRG based upon principal diagnoses and then aggregating secondary diagnoses and their expected severity of illness levels, and modifying severity of illness based on age, primary diagnosis, and additional procedures according to specific APR-DRG grouping logic. For certain analytical questions, DRGs are powerful labels for summarizing patient records because they represent lots of embedded associations between conditions and difficulty of treatment. For example, if we wanted to consider how effective or ineffective our hospital is at managing generally related patient encounters, we would prefer to consider DRGs rather than ICD, HCPCS, or SNOMED systems because DRGs speak to resource expense and length of stay per DRG is a generally useful summary of the efficiency of care. If, however, we noticed that certain DRGs in our institution has widely varying length of stays, we may rather wish to extract patient features in terms of ICD and HCPCS codes in order to identify subgroups accountable for this variation. As with all things, we wish to have the right tool for the right job and the job varies.

Costs