Medicare + Choice Coding and Documentation for

Encounters

Presented by:

Industry Collaboration Effort (ICE)

Encounter Data Team

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Purpose

• 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

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Objectives

At the completion of this session participants will be able to:

• Understand their role in the data collection process• List the various uses of the data they provide• Identify common coding errors• Understand CMS’ plans for calculating

reimbursement• Know who to contact if you have any questions • Ensure “Train the Trainer” sessions occur at the

provider level.

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Introductions

• ICE - who are we?– History of ICE

• Balanced Budget Act of 1997

– Goals• Standardize processes and procedures

where possible• Create administrative efficiency• Consistent regulatory compliance• Education

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ICE Mission Statement

Mission Statement/Scope of the ICE Encounter Data Team:

• 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 issues.

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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.

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Want more info about ICE?

• Go to ICE web site– www.iceforhealth.org

• locate discussion forums• become an ICE member• online calendar of activities• vast library of documents covering

many topics

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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

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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 & Orthotics

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Uses of Encounter Data

• Reimbursement from CMS

• Shared risk reporting

• HEDIS

• Performance measurements

• Utilization

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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)

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Financial Impact PIP-DCG Vs CMS-HCC

Female, 76 years old, Medicaid eligible, COPD, CHF, vascular disease with complications

$14,396.34$8,269.72$13,610.32$10,632.48

CMS-HCC

Model

(2004, proper coding; 70/30)

CMS-HCC

Model

(no encounter submitted)

PIP-DCG

Model

(current, CHF;

90/10)

PIP-DCG

Model

(no encounter submitted)

ICD-9-CM Coding

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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 patient’s condition as it relates to services rendered and documented during the encounter

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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 categories– 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

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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 unspecified

• 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

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• Fifth-digit coding provides additional specificity

• You must code to the fifth-digit if the code has one

• Consider using a master problem list to track diagnoses over time

• Consider using random audits by certified coders to ensure coding accuracy

Best Practices in ICD-9-CM Coding (cont.)

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Master Problem List

Sample Documentation:Problem 1: Resting angina coming on in morning,

associated with dyspnea, no palpitationsProblem 2: Pressure today is 125/76. She feels less tired

on new medication. Will refillProblem 3: Allergies really bothering her. Eyes watering &

itching. Nasal mucosa irritated. Will prescribe antihistamine.

Prob. # Onset Diag.

Active/

Inactive

Problem

ICD-9

Code Comments Date End

1 4/6/1979 4/7/1979

ASCVD-

Angina 429.2 413.9

Medication

controlled

2 8/10/1985 8/10/1985

Benign

Essential

Hypertension 401.1

Medication

controlled

3 6/14/1988 6/14/1988

Allergic

Rhinitis 477.9

Medication

controlled

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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

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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

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Diabetes Coding (cont.)

ComplicationsThere are two acute complications of

diabetes mellitus– Diabetic ketoacidosis

• 250.1x• 250.3x

– Hyperosmolar nonketotic coma• 250.2x

• Other diabetic comas, such as hypoglycemic comas, are assigned to code 251.0

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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

Manifestations

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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.

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Types of Diabetes (cont.)

Diabetes is NOT considered out of control unless the physician identifies it as such in the diagnostic statement and/or body of the record.

Type 1 (IDDM) Controlled 250.x1

Type 1 (IDDM) Uncontrolled 250.x3

Type II (NIDDM) Controlled 250.x0

Type II (NIDDM) Uncontrolled 250.x2

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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 identified

• The medical record must mention the presence of all the elements for each code number used

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Multiple Coding Techniques

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Multiple Coding Techniques (cont.)

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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 physician’s instructions.

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Diabetes Case StudyType I (IDDM) – Controlled: Fifth digit = 1 250.x1Type I (IDDM) – Uncontrolled: Fifth digit = 3 250.x3Type II (NIDDM) – Controlled: Fifth digit = 0 250.x0Type II (NIDDM) – Uncontrolled: Fifth digit = 2 250.x2

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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 case?

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Diabetes Case Study (cont.)

2. What is the proper fifth digit for this case?

3. Are there any additional codes required?

Type I (IDDM) – Controlled: Fifth digit = 1 250.x1Type I (IDDM) – Uncontrolled: Fifth digit = 3 250.x3Type II (NIDDM) – Controlled: Fifth digit = 0 250.x0Type II (NIDDM) – Uncontrolled: Fifth digit = 2 250.x2

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Diabetes Case Study (cont.)

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Diabetes Documentation

Critical elements:• Type • Level of control• Manifestations and complications

by category• Manifestations and complications

specified by site

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Impact of Specific Diabetes Coding on Risk

Adjustment

Example: Diagnosis of Diabetes with chronic renal failure

In the first case:– Physician documents: Diabetes– Biller/coder codes: 250.00– Associated payment: $475/yr

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Impact of Specific Diabetes Coding on Risk Adjustment

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

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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 (428.4x)

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Heart Failure Coding

• Each subcategory is further subdivided by 5th digit

• 5th digit 0 = unspecified• 5th digit 1= acute• 5th digit 2 = chronic• 5th digit 3 = acute on chronic

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NEC vs. NOS

• NEC - Not Elsewhere Classifiable - NEC is used when the ICD-9-CM system doesn’t have a code specific to the patient’s 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

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HCPCS - HealthCare Common Procedural Coding

System

HCPCSHCPCS

CPT Codes

(Level I)

CPT Codes

(Level I)National Codes

(Level II)

National Codes (Level II)

Local Codes(Level III)

Local Codes(Level III)

Developed by the AMA

Developed by CMS

Developed by local Medicare carriers

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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.

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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

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National Codes

• Are the Level II HCPCS codes.• Published annually by CMS.• Codes consist of five characters and are alpha-

numeric.• 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

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Evaluation and Management Services

• CMS does not require a specific set of Evaluation and Management Guidelines for Medicare + Choice provider.

• 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.

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Evaluation and Management Services

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

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Tips for Documenting Procedures

• Include narrative indications for surgery• If the procedure is related to an injury include

information regarding place and mechanism of injury

• If a repeat procedure is performed, provide the following information:1. Physician who performed the first

procedure2. Date the first procedure was performed3. Brief narrative stating the reason(s) the

procedure is being repeated

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Data Validation

• CMS will conduct data validation to ensure there’s 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.

Modifiers

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Modifiers

• 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 numeric.

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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 reduced.

• A bilateral procedure was performed.• A service or procedure was provided more

than once• A secondary procedure was also performed• Unusual events occurred

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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 patient’s 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.

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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 E&M 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

99213 25

20610

496

719.06

1

2

Modifier -25

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Anesthesia Modifiers

CMS requires that all anesthesia claims have modifiers:

Anesthesiologist Services:AA - Anesthesia personally performed by the

anesthesiologistAB - Medical direction of own employees (<4

employees)AC - Medical direction of other than own

employees (<4 individuals)AD - Medical Supervision by a physician: more

than 4 concurrent anesthesia procedures

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Anesthesia Modifiers

CRNA Services:

QX - CRNA service with medical direction by a physician

QY - Medical direction of one CRNA by an anesthesiologist

QZ - CRNA service without medical direction

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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 available.

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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.

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Summary for Providers

• If you are currently submitting Medicare fee-for-service claims, continue with that approach for Medicare + Choice claims and encounters.

• If you are currently paying M+C 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 reported.

• Provide an “Indications for Surgery” narrative on operative reports.

• Provide information to the biller/coder when a modifier is necessary.

Coding/Billing Staff

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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 patient’s 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 provider’s format, please ask your health plan for assistance.

• Each procedure line may have a unique diagnosis.

BBA DATA SUBMISSION DEADLINES

AND CMS PAYMENT SCHEDULE

P Type Date of Service CMS CY

CMS Sweep Date

Current Payment Date

Retro Data Cut-off Risk Adj. %

2 IP 7/1/98-6/30/99 2000 9/10/1999 1/1/2000 9/30/2000 10%3 IP 7/1/99-6/30/00 2001 9/08/2000 1/1/2001 9/30/2001 10%4 IP 7/1/00-6/30/01 2002 9/10/2001 1/1/2002 9/27/2002 10%5 IP 7/1/01-6/30/02 2003 9/02/2002 1/1/2003 9/03/2003 10%6 IP, P, OP 7/1/02 – 6/30/03 2004 9/03/2003 1/1/2004 9/04? 30%7 IP, P, OP 7/1/03-6/30/04 2005 9/10/2004 1/1/2005 9/05? 50%

8* IP, P, OP 7/1/04-6/30/05 2006 N/A 1/1/2006 N/A 75%9* IP, P, OP 7/1/05-6/30/06 2007 N/A 1/1/2007 N/A 100%

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PIPDCG Payment Example

• 76 year old female

• Medicaid eligible

• COPD

• CHF

• Vascular disease with complications

• living in Los Angeles County, CA.

• 2003

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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)

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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

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• 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

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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 M+C plan) $13,610.32

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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)

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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

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Risk Adjustment Factor New vs. Old

PIP-DCG (current model)• 90% Demographic :

$886.04• 10% Risk :

$ 248.15• Total Monthly Blended

payment = $1,134.19• Annualized=$13,610.32

HCC (new risk adj model)• 70% demographic:

$689.14• 30% risk: $510.55 • Total Monthly Blend

payment = $1,199.69• Annualized= $14,396.34

Female, 76 years old, Medicaid eligible, COPD, CHF, vascular disease with complications

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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

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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 UB92• Electronic Submission

– Direct to Health Plan– Vendor

For questions -- Please refer to the “Where to submit guide”

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Final Check List

• Charge/Fee Tickets/Super Bill

• Cheat Sheets - Specialists

• Claims Systems

• Training for Physicians

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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.

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QUESTIONS?