Medicare Choice Coding and Documentation for Encounters - PowerPoint PPT Presentation

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Medicare Choice Coding and Documentation for Encounters


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Title: Medicare Choice Coding and Documentation for Encounters

Medicare Choice Coding and Documentation for
  • Presented by
  • Industry Collaboration Effort (ICE)
  • Encounter Data Team

  • To provide participants with the appropriate
    information and support needed to improve the
    quality and quantity of physician encounter data
    needed by your contracted health plans

  • At the completion of this session participants
    will be able to
  • Understand their role in the data collection
  • List the various uses of the data they provide
  • Identify common coding errors
  • Understand CMS plans for calculating
  • Know who to contact if you have any questions
  • Ensure Train the Trainer sessions occur at the
    provider level.

  • ICE - who are we?
  • History of ICE
  • Balanced Budget Act of 1997
  • Goals
  • Standardize processes and procedures where
  • Create administrative efficiency
  • Consistent regulatory compliance
  • Education

ICE Mission Statement
  • Mission Statement/Scope of the ICE Encounter Data
  • To collaboratively improve the collection and
    transmission of encounter data to CMS as required
    per the Balanced Budget Act of 1997, by
    identifying and resolving common issues by
    collectively working on provider communication
    and education by standardizing tools, processes,
    timeliness standards, and report formats by
    collaboratively regarding clearinghouse
    expectations and negotiations by collectively
    communicating with CMS for resolution of common

ICE Goals
  • Goals of the ICE Encounter Data Team
  • Successful efforts will result in increased
    volume of data submissions from providers, thus
    increased Medicare payments submission or
    transmission cost savings for hospitals due to
    standardization of health plan expectations cost
    saving for hospitals and health plans via
    collective negotiations with clearing houses
    improved customer relations between providers and
    health plans due to reduced expenses and
    increased revenues to hospitals, medical groups
    and health plans.

Want more info about ICE?
  • Go to ICE web site
  • locate discussion forums
  • become an ICE member
  • online calendar of activities
  • vast library of documents covering many topics

Data Collection
  • Physician data
  • CMS1500
  • Importance of clinical information
  • Clinical information identifies the health status
    of your members
  • Garbage in garbage out
  • Hospital data
  • UB92
  • I/P O/P
  • Clinical data is generally reliable

Type of Data Collected
  • Physician Data - result of face to face visit
  • Hospital Inpatient Data
  • Hospital Outpatient Data
  • ______________________________
  • Inpatient Excludes
  • SNF Inpatient, Hospice, ICF
  • Outpatient Excludes
  • Lab, DME, Ambulance, ASCs, Prosthetics

Uses of Encounter Data
  • Reimbursement from CMS
  • Shared risk reporting
  • Performance measurements
  • Utilization

Financial ImpactPIP-DCG vs. CMS-HCC
  • PIP-DCG model Principal Inpatient Diagnostic
    Cost Group
  • beneficiaries are assigned to a disease group
    based on future cost to diagnosis
  • a single most costly diagnosis is recognized from
    an inpatient stay greater than one day
  • CMS-HCC model Hierarchical Condition Category
  • incorporates multiple diagnosis codes from
    ambulatory data (outpatient physician)

Financial Impact PIP-DCG Vs CMS-HCC
Female, 76 years old, Medicaid eligible, COPD,
CHF, vascular disease with complications
ICD-9-CM Coding
ICD-9-CM Coding
  • The ICD-9-CM coding system translates written
    medical terminology into numeric and
    alpha-numeric codes
  • The ICD-9-CM codes listed on your claim or
    encounter are intended to accurately reflect the
    patients condition as it relates to services
    rendered and documented during the encounter

Best Practices in ICD-9-CM Coding
  • The code selected should always be at the highest
    level of specificity
  • The ICD-9-CM book is organized into three digit
  • 250 Diabetes Mellitus
  • 401 Essential Hypertension
  • 480 Viral Pneumonia
  • MOST diagnosis codes require a fourth/fifth digit
    to provide sufficient specificity
  • A three digit code cannot be assigned if a
    category has fourth/fifth digits even if your
    billing or encoder system accepts it

Best Practices in ICD-9-CM Coding (cont.)
  • The fourth digit subcategory provides more
    specificity regarding
  • Codes with a fourth digit of 9 are considered
  • If another digit more accurately describes the
    condition, do not use 9

- Etiology Cause
- Site Specific area of the body
- Manifestation Characteristic signs, symptoms or processes of an illness
Best Practices in ICD-9-CM Coding (cont.)
  • Fifth-digit coding provides additional
  • You must code to the fifth-digit if the code has
  • Consider using a master problem list to track
    diagnoses over time
  • Consider using random audits by certified coders
    to ensure coding accuracy

Master Problem List
  • Sample Documentation
  • Problem 1 Resting angina coming on in morning,
    associated with dyspnea, no palpitations
  • Problem 2 Pressure today is 125/76. She feels
    less tired on new medication. Will refill
  • Problem 3 Allergies really bothering her. Eyes
    watering itching. Nasal mucosa irritated. Will
    prescribe antihistamine.

Diabetes Coding
  • Diabetes is a disease that is often miscoded,
    due to inadequate documentation.
  • The three digit category for diabetes is 250
  • Five digits are required for all diabetes codes
  • 250.00 - The first three digits indicate the
    patient has diabetes
  • 250.01 - The second 0 indicates there are no
    complications or other manifestations

Diabetes Coding (cont.)
  • If the physician specifically lists in the
    medical record any complications or
    manifestations of the diabetes that show the
    progression of the disease and/or response to
    treatment the additional documentation allows the
    biller/coder to select the proper fourth digit

Diabetes Coding (cont.)
  • Complications
  • There are two acute complications of diabetes
  • Diabetic ketoacidosis
  • 250.1x
  • 250.3x
  • Hyperosmolar nonketotic coma
  • 250.2x
  • Other diabetic comas, such as hypoglycemic comas,
    are assigned to code 251.0

Diabetes Coding (cont.)
Renal manifestations 250.4x
Ophthalmic manifestations 250.5x
Neurological manifestations 250.6x
Peripheral Circulatory disorders 250.7x
Other Specified manifestations 250.8x
Diabetes w/unspecified complications 250.9x
Types of Diabetes
  • It is critical to identify the type of diabetes
    in the medical record.
  • If the physician states the level of control the
    patient is maintaining, this will allow the
    biller/coder to select the proper fifth digit.

Types of Diabetes (cont.)
Type 1 (IDDM) Controlled 250.x1
Type 1 (IDDM) Uncontrolled 250.x3
Type II (NIDDM) Controlled 250.x0
Type II (NIDDM) Uncontrolled 250.x2
  • Diabetes is NOT considered out of control unless
    the physician identifies it as such in the
    diagnostic statement and/or body of the record.

Multiple Coding Techniques
  • Used when more than one code number is needed to
    identify a given condition and provide a more
    complete picture of the diagnosis
  • The use of multiple codes allows all of the
    components of a complex diagnosis to be
  • The medical record must mention the presence of
    all the elements for each code number used

Multiple Coding Techniques
Multiple Coding Techniques (cont.)
Diabetes Case Study
  • A patient with Type I diabetes presents to the
    ophthalmologist for an evaluation of the
    progression of his diabetic cataracts. His blood
    sugar levels have been well controlled and he is
    following his diet and exercise plan according to
    his primary care physicians instructions.

Diabetes Case Study
Diabetes Case Study (cont.)
Renal Manifestations 4th digit 4 250.4x
Ophthalmic Manifestations 4th digit 5 250.5x
Neurologic Manifestations 4th digit 6 250.6x
Peripheral Circulatory Disorders 4th digit 7 250.7x
Other Specified Manifestations 4th digit 8 250.8x
Unspecified Manifestations 4th digit 9 250.9x
1. What is the proper fourth digit code for this
Diabetes Case Study (cont.)
2. What is the proper fifth digit for this case?
3. Are there any additional codes required?
Diabetes Case Study (cont.)
Diabetes Documentation
  • Critical elements
  • Type
  • Level of control
  • Manifestations and complications by category
  • Manifestations and complications specified by site

Impact of Specific Diabetes Coding on Risk
  • Example Diagnosis of Diabetes with chronic
    renal failure
  • In the first case
  • Physician documents Diabetes
  • Biller/coder codes 250.00
  • Associated payment 475/yr

Impact of Specific Diabetes Coding on Risk
  • In the second case
  • Physician documents Diabetes with chronic renal
    failure, insulin dependent
  • Biller/coder codes 250.41 (diabetes with renal
    manifestations, insulin dependent
  • Associated payment 1,852/yr
  • Difference in payment due to insufficient
    documentation 1,377/yr

Heart Failure Coding
  • Heart failure coding has been expanded to 15
    codes for 2003
  • Codes are now divided into
  • Systolic heart failure (428.2x)
  • Diastolic heart failure (428.3x)
  • Combined systolic diastolic heart failure

Heart Failure Coding
  • Each subcategory is further subdivided by 5th
  • 5th digit 0 unspecified
  • 5th digit 1 acute
  • 5th digit 2 chronic
  • 5th digit 3 acute on chronic

  • NEC - Not Elsewhere Classifiable - NEC is used
    when the ICD-9-CM system doesnt have a code
    specific to the patients condition
  • NOS - Not Otherwise Specified - NOS is used when
    the coder lacks sufficient information to code to
    a higher level of specificity. This is the
    equivalent of unspecified

HCPCS / CPT Coding
HCPCS - HealthCare Common Procedural Coding System
Local Codes (Level III)
CPT Codes (Level I)
National Codes (Level II)
Developed by local Medicare carriers
Developed by the AMA
Developed by CMS
CPT Coding
  • CPT stands for Current Procedural Terminology.
  • It was developed by the American Medical
    Association (AMA) in 1966.
  • It is a listing of five-digit, numeric codes for
    reporting medical services and procedures
    performed by physicians.
  • CPT is revised and published annually by the AMA
    to keep pace with changes in medical practice.

CPT Organization
  • The procedures and services with their
    identifying codes are in numerical order within
    CPT with the exception of the Evaluation and
    Management services which are listed first.

Section Code Range
Evaluation and Management 99201 to 99499
Anesthesiology 00100 to 01999
Surgery 10040 to 69979
Radiology 70010 to 79999
Pathology and Laboratory 80002 to 89399
Medicine 90701 to 99199
Category III Codes 0001T to 0044T
National Codes
  • Are the Level II HCPCS codes.
  • Published annually by CMS.
  • Codes consist of five characters and are
  • Were created because CPT describes only
    physicians procedures and services and CMS
    needed another method to code supplies,
    injections, and other procedures and services it
    recognized were not found in CPT. These codes
    are typically billed when services are provided
    in the medical office or in the Outpatient
    hospital setting.
  • Example J0530 - Bicillin 600,000 Units

Evaluation and Management Services
  • CMS does not require a specific set of Evaluation
    and Management Guidelines for Medicare Choice
  • The code chosen by the physician must accurately
    describe the services rendered.
  • In the Medicare fee-for-service program,
    physicians currently have the option of choosing
    the 1995 or the 1997 E M guidelines.

Evaluation and Management Services
  • We strongly suggest that you follow
    Fee-for-Service CMS guidelines when selecting an
    EM Code, and when coding encounters in general.
    CMS has notified Health Plans that physician
    encounter data will be subjected to Medical
    Records Review.

Tips for Documenting Procedures
  • Include narrative indications for surgery
  • If the procedure is related to an injury include
    information regarding place and mechanism of
  • If a repeat procedure is performed, provide the
    following information
  • 1. Physician who performed the first procedure
  • 2. Date the first procedure was performed
  • 3. Brief narrative stating the reason(s) the
    procedure is being repeated

Data Validation
  • CMS will conduct data validation to ensure
    theres consistency between the claim and the
    medical records.
  • As medical information is updated it is important
    that consistency exists between the claim and the
    medical record to ensure a successful data
    validation by CMS.

  • Consist of 2 digits that are appended to
    procedure codes. Provides additional information
    as to how the procedure was different from the
    typical service described in CPT.
  • The CPT system contains 33 modifiers.
  • HCPCS modifiers are 2 digit alpha or alpha

Modifiers May Be Used to Indicate
  • A service or procedure has both a professional
    and technical component.
  • A service or procedure was performed by more than
    one physician.
  • A service or procedure has been increased or
  • A bilateral procedure was performed.
  • A service or procedure was provided more than
  • A secondary procedure was also performed
  • Unusual events occurred

Modifier - 25
  • Significant Separately Identifiable Evaluation
    and Management Service by the Same Physician on
    the Same Day of a Procedure
  • This modifier indicates that on a day a procedure
    or services identifier by a CPT code was
    performed, the patients condition required a
    significant, separately identifiable E/M service
    above and beyond the usual preoperative and
    postoperative care associated with the procedure
    that was performed. Assign the proper E/M code
    as appropriate for the services rendered.

Modifier -25
Example A patient is seen in the office for
evaluation of his COPD, coronary artery disease
and diabetes. He is also complaining of swelling
in his knee which developed after he fell while
getting out of his car. The physician performs an
expanded, problem-focused history and examination
of his chronic illnesses along with his knee and
performs a joint aspiration of the knee.
Since there is a separately identifiable EM
service for the chronic illnesses, the office
visit is coded with modifier -25 appended to show
other services were rendered unrelated to the
joint aspiration
Anesthesia Modifiers
  • CMS requires that all anesthesia claims have
  • Anesthesiologist Services
  • AA - Anesthesia personally performed by the
  • AB - Medical direction of own employees (lt4
  • AC - Medical direction of other than own
    employees (lt4 individuals)
  • AD - Medical Supervision by a physician more
    than 4 concurrent anesthesia procedures

Anesthesia Modifiers
  • CRNA Services
  • QX - CRNA service with medical direction by a
  • QY - Medical direction of one CRNA by an
  • QZ - CRNA service without medical direction

Unlisted Procedures
  • Every section of the CPT book has an unlisted
    procedure code.
  • Used for procedures performed for which there is
    not a specific code listed in the CPT book.
  • Often used for new procedures resulting from
    medical advances and research. NOTE Beginning
    with 2002 CPT, Category III codes are being
    developed. Check for a Category III code prior
    to using an unlisted code.
  • Are NOT assigned when a more descriptive code is

Miscellaneous Coding Information
  • Anesthesia included in surgical procedure -
    anesthesia rendered by the surgeon is NOT
    reported separately.
  • Separate procedures - procedure codes listed in
    the CPT as separate procedures are usually part
    of a more comprehensive service. If it is the
    only procedure done on a given date, then it may
    be billed separately.
  • Designation of sex procedures - codes which
    include gender in their description cannot be
    billed for the opposite gender.

Summary for Providers
Coding/Billing Staff
  • If you are currently submitting Medicare
    fee-for-service claims, continue with that
    approach for Medicare Choice claims and
  • If you are currently paying MC encounters or
    claims on behalf of a health plan, all data
    elements on a CMS 1500 or UB92 must be recorded
    and transmitted to the health plan.
  • If you are new to filing a Medicare bill or
    encounter, we have given you training on best
    practices in coding to get you started.
  • Physicians should provide sufficient
    documentation to enable accurate diagnosis coding
    by billers/coders.
  • Use a documentation format that supports the
    level of evaluation and management service
  • Provide an Indications for Surgery narrative on
    operative reports.
  • Provide information to the biller/coder when a
    modifier is necessary.

Tips for Your Office or Facility
  • Review your superbill to make certain that all
    codes are current.
  • If diagnosis codes are printed on your superbill,
    allow enough code choices for the physician to
    accurately and completely describe that patients
    condition, to the highest level of specificity.
  • Biller/coders make sure your codes are valid on
    a yearly basis.
  • If you are having difficulty with a downstream
    providers format, please ask your health plan
    for assistance.
  • Each procedure line may have a unique diagnosis.

PIPDCG Payment Example
  • 76 year old female
  • Medicaid eligible
  • COPD
  • CHF
  • Vascular disease with complications
  • living in Los Angeles County, CA.
  • 2003

PIPDCG Payment Example
  • Demographic Payment Calculation
  • Monthly rate book for LA County
  • Part A 400.33 Part B 323.21
  • Jane Doe, Medicaid factor
  • Part A 1.45 Part B 1.25
  • Part A 400.33 x 1.45 580.48
  • Part B 323.21 x 1.25 404.01
  • Monthly demographic capitation payment (Part A
    plus Part B)
  • 580.48 404.01 984.49 (100 demographic)

PIPDCG Payment Example
  • Risk Adjustment Payment Calculation
  • Monthly rate book for LA County
  • Part A 400.33 plus Part B 323.21 723.54
  • Rescaling factor 0.989524
  • Rescaling rate 723.54 x 0.989524 715.96

PIPDCG Payment Example
  • Risk factors
  • Jane Doe, demographic base factor 0.588
  • Medicaid 0.440
  • CHF (PIPDCG 16) 2.438
  • Total risk factor 0.588 0.440 2.438 3.466
  • Monthly risk adjusted capitation (100 risk
    adjusted payment)
  • 715.96 x 3.466 2,481.52

PIPDCG Payment Example
  • Blended Risk Adjustment Payment Calculation
  • 90/10 Blend
  • Demographic 984.49 x 0.9 886.04
  • Risk 2,481.52 x 0.10 248.15
  • Total Monthly Blended payment 886.04
    248.15 1,134.19
  • Annually (if she lives and stays enrolled in an
    MC plan) 13,610.32

CMS-HCC Payment
  • Female, 76 years old, Medicaid eligible, COPD,
    CHF, vascular disease with complications, LA
    County, 2004
  • Payment estimation
  • 76 year old female (0.483)
  • Medicaid (0.183)
  • COPD (0.376)
  • CHF (0.417)
  • Vascular disease with complications (0.677)
  • CHF with COPD (0.241)
  • 2.377 (relative risk factor)

CMS-HCC Payment
  • 2.3725 x 715.96 1,701.84 (100 risk)
  • 984.49 (100 demographic)
  • 70 demographic (689.14)
    30 risk (510.55)
    total blended payment (1,199.69)
  • Annual 14,396.34

Risk Adjustment Factor New vs. Old
Female, 76 years old, Medicaid eligible, COPD,
CHF, vascular disease with complications
  • HCC (new risk adj model)
  • 70 demographic 689.14
  • 30 risk 510.55
  • Total Monthly Blend payment 1,199.69
  • Annualized 14,396.34
  • PIP-DCG (current model)
  • 90 Demographic 886.04
  • 10 Risk
  • 248.15
  • Total Monthly Blended payment 1,134.19
  • Annualized13,610.32

Coding Adjustments
  • As indicated in the previous examples, accurate
    coding impacts reimbursement.
  • Please follow-up with the Medicare Encounter Data
    Report contact in your plan (listed on Health
    plan contact list in the ICE Web-site) on how to
    adjust previously submitted claims or encounters.

Submitting Your Data
Tips for Your Office or Facility
  • Paper Submission
  • Direct to Health Plan
  • Vendor (i.e. Clearinghouse)
  • TPA, IPA, or Medical Group
  • Refer to Resource Guide to complete CMS 1500 and
  • Electronic Submission
  • Direct to Health Plan
  • Vendor

For questions -- Please refer to the Where to
submit guide
Final Check List
  • Charge/Fee Tickets/Super Bill
  • Cheat Sheets - Specialists
  • Claims Systems
  • Training for Physicians

Resource Guide
  • The resource guide included in your handout today
    contains a number of web-sites where you can
    obtain more coding and billing guidance.