Coding, Billing, and Regulatory Compliance
Kathryn Hansen
LEARNING OBJECTIVES
On completion of this chapter, the reader should be able to:
1. Define regulatory compliance as it applies to billing and coding of procedures performed in the sleep center.
2. Review coding guidelines used for billing sleep diagnostic procedures.
3. Describe preauthorization requirements that impact sleep center approval processes.
4. Discuss case studies to demonstrate the implementation of regulatory compliance, and coding and billing constructs that impact revenue integrity.
KEY TERMS
Common procedural technology (CPT)
Conditions of Participation (CoP)
Diagnostic related grouping (DRG)
Financial responsibility
Health plan billing rules
Healthcare Common Procedure Coding System (HCPCS)
Informed consent
Insurance contracts
International Classification of Diseases 10th Revision Clinical Modifications (ICD-10 CM)
International Classification of Sleep Disorders, third edition (ICSD-3)
Modifiers
INTRODUCTION
Medical insurance plays an important role in the financial well-being of every health care business. The regulatory environment of medical insurance is evolving faster than ever because of the introduction of Benefits Management Programs, which are mandated to keep control over escalating health care costs through the preauthorization and preapproval processes that have become a normal operational requirement in recent years. These changes have introduced more challenges to maintaining our volume and revenue. As a result, health care professionals must be familiar with the rules and guidelines of each health plan in order to submit proper documentation to assure payment. This familiarity begins with the knowledge of insurance basics.
WHAT IS MEDICAL CODING?
Medical coding is a system of number and letter labels that are unique for each diagnosis, symptom, or symptom set, which is used to track prevalence of diseases and associated diagnoses. Additionally, codes are used for standard communication of procedures used in the treatment of diseases with subsequent treatments. Therefore, accurate medical coding is important for submission of billing claims and in tracking statistics for disease and medical treatment.
Correct coding of the medical claim is essential to obtain insurance reimbursement as well as maintain patient records. Coding claims accurately convey to the insurance payer and other health care entities a standardized reporting of the patient illness or injury and the method of diagnosis and/or treatment.
Medical coding involves using one or more of the following types of codes:
International Classification of Diseases (ICD) codes are used to standardize the reporting of diagnoses, symptoms, and causes of health condition in humans into specific categories with approved code sets using numbers and letters to characterize the diseases. Currently, the manual is the 10th revision for clinical modification.
The World Health Organization (WHO) creates, copyrights, and oversees these classifications, which are recognized by every medical facility and practitioner worldwide. In the United States, the National Center for Health Statistics, which is a part of the Centers for Medicare and Medicaid Services (CMS), manages any amendments to the ICD codes alongside the WHO (1).
International Classification of Sleep Disorders, third edition (ICSD-3) codes provide specific information on sleep disorders, including diagnostic criteria, essential features, and objective findings.
The American Academy of Sleep Medicine (AASM) creates, copyrights, and maintains these classifications, which are used primarily by sleep specialists. The ICSD-3 references appropriate ICD-10 codes for the sleep disorders identified in this manual (2).
Common Procedural Technology (CPT) codes are a five-digit number or a four-digit number with one alpha character assigned to every procedure and service, which medical practitioners include in documentation to designate a medical, surgical, or diagnostic service. These codes are used by third-party payers to determine the amount of reimbursement that a practitioner will receive from the payer for the service. They are standardized to define the specific elements of the procedure to describe the same procedure across all providers for the intent of creating uniformity in billing (3).
CPT codes are developed, maintained, and copyrighted by the American Medical Association (AMA). They are Level I codes, which means they are used for procedures and services usually provided by physicians or other approved licensed clinical providers, such as Nurse Practitioners, Physician Assistants, and Doctors of Osteopathy. As the practice of health care changes, new codes are developed for new services; current codes may be revised; and old, unused codes are retired. Thousands of codes are in use and they are updated annually (3).
To search for a CPT code and its description, these options are available:
Purchase the CPT manual from the AMA, which is a comprehensive listing of all CPT and Level I codes.
Perform a CPT code search on the AMA web site by registering (for free) for five searches per day. This allows a limited search for a CPT code or the use of a keyword to identify the associated CPT code description.
Contact the referring doctor’s office to request the CPT codes and services requested for the patient.
Contact the payer’s billing manual or benefits specialists to obtain clarification of the code and description associated with the procedure.
Healthcare Common Procedure Coding System (HCPCS) is a set of codes used and maintained by the CMS and used for billing Medicare, Medicaid, and many other third-party payers. If you are billing a Medicare claim, a HCPCS code will be reported in your paperwork. These are considered Level II codes, which cover health care services and procedures that are not provided by physicians. Examples of items billed with Level II codes are medical equipment, supplies, and home sleep apnea testing (HSAT) for Medicare beneficiaries such as G0399. HCPCS Level II codes start with a letter and have four numbers. A modifier attached to the code, consisting of either two letters or a letter and a number, may be required for coding integrity. The coding guidelines will reflect the need for an additional modifier, which is generally cross-referenced in the description of the code, or in a paragraph preceding the specific coding chapter or section in the manual (4).
To search for a HCPCS Level II code and its description, these options are available:
Purchase the current HCPCS manual
Search the CMS web site: https://www.cms.gov/Medicare/Coding/HCPCSReleaseCodeSets/Alpha-Numeric-HCPCS.html
Complete a web search online.
Diagnostic Related Grouping (DRG) codes are used by Medicare and some other third-party payers to categorize hospitalization costs and determine how much to pay for a patient’s hospital stay. Rather than paying the hospital for what it spent caring for a hospitalized patient, Medicare pays the hospital a fixed amount on the basis of the patient’s DRG or diagnosis. Essentially, the DRG-based payment means that if a patient admitted to the hospital is treated for less money than the DRG payment, a profit is associated with that admission. Likewise, the opposite is true: if the patient care expenses for the same admission are more than the DRG payment, the facility loses money.
Therefore, instead of paying for each day the patient is hospitalized and each procedure completed, Medicare pays a single amount based on the DRG, which is based on the diagnosis(es), age, and gender of the patient. Each DRG is grouped into a category of clinically similar diagnoses, which require similar resources and care to treat.
Modifiers are additional two-digit numbers, two-letter numbers, or alphanumeric characters used with the CPT and HCPCS codes to convey additional information about the procedure being billed. They may be used to identify a change in the procedure or multiple procedures completed in the same patient encounter. For instance, if a procedure is discontinued before the completion of the required monitoring time, a modifier is appended to the CPT code to describe reduced services.
KEY MODIFIER FACTS
Inappropriate use of modifiers can cause a delay or reduction in payment in the same manner as not using an appropriate CPT code.
For a complete list of modifiers, turn to Appendix A of the CPT manual.
Append modifiers only according to individual insurance payer guidelines.
Modifier use is different for services provided by licensed providers as opposed to the technical services.
Modifier use may be different for services provided in the physician practice compared with those provided in the hospital. These requirements are included in the insurance agreement, a document called the Conditions of Participation (CoP).
Knowledge of these coding tools is important for communication and billing purposes. The use of coding in all types of medical practice is not only important but also imperative because commercial insurance payers, Medicare, Tricare, and Medicaid, will not pay a claim if it is not properly submitted with acceptable diagnosis(es) and procedure codes.
CODES FOR BILLING PROCEDURES PERFORMED
It is time to define the details associated with coding for procedures performed in all monitoring settings.
CPT procedure codes 95800 through 95811 are utilized for diagnostic sleep testing services, which include coding for both sleep studies and polysomnography (PSG). The respective definitions of these two levels of service are provided in the introduction to the Medicine Chapter of the CPT manual.
Table 71-1 CPT Codes for Sleep Studies | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ||||||||||||||||||||
They are defined as continuous and simultaneous monitoring and recording of multiple physiologic and pathophysiologic parameters for a minimum of 6 hours of monitoring, which includes the physician’s review, interpretation, and reporting of the findings. The monitoring time starts with “lights out” and ends with “lights on.” It does not include the time spent completing questionnaires, nor the time to apply and remove all of the monitoring sensors (3).
In 2013, two monitoring codes were added to expand coding and differentiate coding for adult and pediatric sleep monitoring:
95782—younger than 6 years; diagnostic study that requires a documentation of greater than or equal to 7 hours’ monitoring time
95783—younger than 6 years; positive airway pressure study that requires a documentation of greater than or equal to 7 hours’ monitoring time (3)
Table 71-1 provides a summary of the CPT codes and their respective descriptions for polysomnograms
and sleep studies completed in the sleep center as well as those used for HSAT (5). A more detailed discussion on HSAT is available in Chapter 44.
and sleep studies completed in the sleep center as well as those used for HSAT (5). A more detailed discussion on HSAT is available in Chapter 44.
Related posts:
Stay updated, free articles. Join our Telegram channel
Full access? Get Clinical Tree
