Articles tagged with medical coding
There’s no shortage of incentive programs coming out of the Centers for Medicare and Medicaid Services (CMS) these days. One example that we discussed recently on the pmFAQtory blog is the Physician Quality Reporting System (PQRS), which financially prods health care providers to report on certain quality measures.
CMS carrots also include the Medicare and Medicaid Electronic Health Records (EHR) Incentive Programs, which were set up via the Health Information Technology for Economic and Clinical Health (HITECH) Act, part of the 2009 federal stimulus bill.
Collectively known in the health care and health IT industries as HITECH, these programs offer financial incentives to “eligible professionals, eligible hospitals and critical access hospitals (CAHs) as they adopt, implement, upgrade and demonstrate the meaningful use of certified EHR technology,” says CMS. “Certified” is a key word here, as providers must use a certified health IT product to be eligible for incentive payments.
What is “meaningful use” and how can providers achieve it?
To be a meaningful EHR user, an eligible entity must demonstrate:
- The use of a certified EHR in a meaningful manner (e.g., e-prescribing)
- The use of certified EHR technology for electronic exchange of health information to improve quality of health care
- The use of certified EHR technology to submit clinical quality and other measures
To demonstrate the above three points (for 2011-2012, known as “stage one” of meaningful use), eligible professionals, hospitals and CAHs must fulfill certain objectives:
- Eligible professionals must meet 15 required “core” objectives, and five of 10 “menu set” objectives (see PDF list from CMS).
- Eligible hospitals and CAHs must meet 14 required “core” objectives, and five of 10 “menu set” objectives (see PDF list from CMS).
On top of this, there are also extensive clinical quality measure reporting requirements.
Finally, the eligible professional, hospital or CAH must attest (legally declare) to have demonstrated meaningful use with certified EHR technology.
What financial incentives are available?
There are two programs available, one for Medicare and one for Medicaid. For both programs, eligible professionals and hospitals may begin to participate this year. Hospitals can potentially receive payments under both programs, but professionals must choose to receive payments from one or the other. A complete outline of payments is on the CMS website, but here’s a summary:
- For the Medicare incentive program, eligible professionals (individual providers) can receive up to $44,000 over five years (through 2016). Eligible hospitals and CAHs begin with a $2 million base payment and can receive incentives over a total of four years (through 2015). Professionals, hospitals and CAHs who do not demonstrate meaningful use are subject to “payment adjustments” (reductions in Medicare reimbursements) beginning in 2015.
- For the Medicaid incentive program, eligible professionals can receive up to $63,750 over the six years they choose to participate (between 2011 and 2021). Eligible hospitals and CAHs begin with a $2 million payment and must enter the program no later than 2016. Unlike the Medicare incentive program, there are no payment adjustments for those not demonstrating meaningful use.
Why meaningful use?
The ultimate goal of meaningful use, of course, is to improve health by improving health care and health care delivery.
To that end, CMS sees meaningful use of EHRs as maintaining privacy and security while improving quality, safety, efficiency, care coordination, and population and public health; reducing health disparities; and engaging patients and families in their health care.
Check out the CMS meaningful use website for more information. When you’re still confused, get in touch with pmFAQtory so we can help you navigate the process of achieving meaningful use.
The Physician Quality Reporting Initiative (PQRI), which we recently discussed in a pmFAQtory blog post, underwent some important changes for 2011.
For starters, the name has changed to Physician Quality Reporting System (PQRS), and the incentive payment to eligible providers has been cut in half, from 2 percent to 1 percent of total Medicare Part B allowed charges.
Due to its inclusion in the Patient Protection and Affordable Care Act of 2010, also know as the health care reform law, the PQRS program is here to stay — but is slowly being shifted from a “bonus payment” program to one that penalizes providers who don’t participate.
Consider the planned trend for PQRS incentive payments:
- 2010: 2 percent bonus
- 2011: 1 percent bonus
- 2012-2014: 0.5 percent bonus
- 2015: 1.5 percent penalty
- 2016 and beyond: 2 percent penalty
The penalties, which are set to begin in 2015, will presumably be withheld from a provider’s reimbursement payments. Reducing, via these penalties, the already-low Medicare reimbursements will only further squeeze providers, so if your organization isn’t participating in the PQRS, contact pmFAQtory and let’s talk about how we can help you get started.
Other significant changes to PQRS in 2011 include:
- For claims-based reporting of individual quality measures, providers only need to report on 50 percent of eligible cases (down from 80 percent).
- For 2011-2014, eligible providers will be able to receive an additional 0.5 percent incentive payment, on top of the standard 1 percent payment, by participating in a “maintenance of certification” program. More details are in this PDF from the Centers for Medicare and Medicaid Services (CMS).
- The release of a revised list of quality measures; you can find an updated list and notes from CMS in this ZIP file.
The PQRS is complicated. pmFAQtory offers you expert guidance as you work to implement or refine PQRS in your practice. Contact us today.
We’ve said before that “good medical coding is good business.” Not only does accurate and efficient medical coding ensure that health care providers are properly reimbursed for each and every service provided, but it can also open the door to “bonus” revenue.
The Physician Quality Reporting Initiative (PQRI), a program that started in 2007 under the Centers for Medicare and Medicaid Services (CMS), offers incentive payments to Medicare providers in exchange for their reporting of certain quality measures. (Note that in 2011, the program’s name is changing to Physician Quality Reporting System [PQRS].)
Now, why would the government be so interested in quality measures that it would pay providers for that information? Especially given our recent pmFAQtory blog discussion of diagnosis-related groups (DRGs), where you learned that the feds reimburse based on “episode” of care (volume), not on value or quality?
The reason is that many believe Medicare will ultimately shift toward paying for value rather than volume. Incentivizing health care organizations — via the voluntary PQRI program — to modify their IT infrastructures to report on quality measures lays the foundation for later tying Medicare reimbursements to those (or other) quality measures.
In 2010, providers were eligible for an extra payment of 2 percent of their total Medicare Part B (Medicare Physician Fee Schedule) allowed charges. An incentive payment of 2 percent may sound nominal, but not for health care organizations that are routinely breaking even, or losing money, each time they see a Medicare patient.
To earn the incentive payment, providers have to choose at least three quality measures from a list of more than 200, and then report on each of those measures in at least 80 percent of eligible cases for the year. Standardization of this quality information is done through medical coding.
Health care providers report quality measures to CMS by adding CPT Category II codes to Medicare Part B claims, in addition to the appropriate CPT Category I codes and ICD-9-CM codes that would already be part of the claim. (Remember that CPT Category I codes are used to classify outpatient procedures, while ICD-9-CM codes are used to classify diagnoses.)
It’s important to recognize that the incentive payment today is not based on anything the government learns from the quality reporting (that is, whether the organization’s quality metrics show high- or low-quality patient care). It’s only based on whether the provider took part in reporting.
For health care organizations hoping to earn, or continue to earn, the PQRI incentive payment, it’s imperative that their medical coding and billing software is able to properly capture the quality measures via CPT Category II codes.
Want to enter the PQRI game or ensure you’re playing it right? Call pmFAQtory today.
Given its complexity, medical coding often seems like a “necessary evil” for health care organizations. Sure, coding is something that must be done before providers can be paid, but the data generated in the process can also be leveraged to improve business processes and patient care.
Some call it “health care analytics” and others call it “data mining.” Either way, it’s about scouring the vast quantity of information locked within medical codes, electronic medical records, laboratory results, billing systems, and other places to discover trends and opportunities.
Essentially, you can combine data from various IT sources to form a large data warehouse, which can then be queried. Let’s look at two simplistic examples that show the promise of health care analytics.
Patient referral analysis: Maximizing efficiency and revenue
An endocrinology patient may end up at an endocrinologist by a variety of paths: self-referred, referred by a primary care physician at the same medical center, referred by a nephrologist at the same medical center, referred by a primary care physician at a different medical center, and on and on.
An analytical software tool could examine (using ICD-9-CM and CPT codes, and billing information) the treatment pattern of each type of patient. For example, a retrospective analysis of the past two years of endocrinology patients might show that self-referred patients — those who simply call up and make an appointment — had minor ailments that could’ve been treated by their primary care physician. Such “one and done” patients take appointment slots away from — and generate less revenue than — patients who truly need long-term endocrinology care.
Lesson learned: The endocrinology department can use these findings to better prioritize how it fills its appointment slots, perhaps by more closely screening self-referred patients to determine whether they really need to see an endocrinologist.
Outcomes research: Improving quality of care
There’s no doubt that the “art” of medicine is aggressively moving toward the “science” of medicine. Federal research dollars are pouring into areas like comparative effectiveness research, where researchers analyze outcomes over time to determine which treatments are statistically better than others for different patient populations.
For instance, from the aforementioned data warehouse, a medical center could select all male patients between the ages of 25 and 44 diagnosed with headaches in the past year. Presumably, different patients will be prescribed different treatments, such as over-the-counter medication (ibuprofen, acetaminophen, etc.), massage, or acupuncture.
This group of patients could then be analyzed over time. In the six months following initial treatment, perhaps the data show that patients prescribed acupuncture sessions are statistically less likely (controlling, of course, for other variables) to return to the physician with continued headaches.
Lesson learned: If acupuncture is statistically more effective, the organization could build a clinical decision support tool to alert physicians at the point-of-care that their headache patient might benefit most from acupuncture.
Robust analytics are the future
Medical coding is here to stay, but it shouldn’t be viewed solely as a means to get paid for services rendered. Rather, health care organizations ought to look at medical coding as one of several crucial sources of data that can be combined and analyzed to help optimize future revenue, improve patient care, and more.
Products such as DataScout, recently released by our friends at CodeRyte, are leading the way in the growing health care analytics software market. pmFAQtory stands ready to help your health care organization implement and make use of these valuable tools.
What secrets are locked within all the data you’re generating each day? Get in touch with pmFAQtory and let one of our health care consulting experts show you the way.
In the past few weeks, we’ve looked at several code sets (ICD, ICD-CM, HCPCS, and CPT) that are significant in the medical coding arena. Now, let’s explore computer-assisted coding (CAC) applications and how they fit within the health care information technology environment.
As you know, code sets form the foundation of medical coding. If you don’t know which code represents a specific medical diagnosis or procedure, you can look it up in the appropriate code set — much like you’d look up an unfamiliar word in the dictionary.
Simple enough — if you are looking up a code or two. But medical centers may see hundreds, or even thousands, of patients each day. Every diagnosis made — and every procedure performed — by a clinician must be coded using one of the above code sets. (That is, if the medical center wants to be paid for services provided!)
Even if we assume that to some degree the Pareto principle is in effect — that the majority of cases seen at a medical center can be coded using a reasonably small number of codes — we’re still talking about human coders becoming intimately familiar with hundreds of codes (out of the 15,000 or so codes in ICD-9-CM).
So it’s no surprise that health care organizations are seeking out companies like pmFAQtory to help them implement CAC applications such as CodeRyte. These software tools do the initial assigning of codes, meaning you need fewer human coders — and those coders only have to “audit” the software’s decisions, and perhaps dissect and code the really complex cases.
Within a health care organization’s information technology landscape, CAC applications sit among many other software systems. Various systems feed information into the CAC application; once processed by CAC software, data is fed into more systems.
These other systems include:
- A phone/dictation system into which physicians dictate their patient notes
- A transcription application to convert audio dictations into text
- A routing interface to bring transcribed notes together with relevant patient information, such as a patient number, demographic data, and insurance information
- A billing system to match procedures with charges and generate a bill for third-party payers and/or the patient
- An electronic medical record to house each patient’s individual health record
The CAC application generally sits between the routing interface and billing system. As you might guess, there are various checks and balances, and lines of communication, between these systems to ensure data integrity. For example, if a human coder is checking the output from a CAC application and realizes more specificity about a diagnosis is needed from the physician, there’s an avenue for him or her to connect with that doctor.
When managing a CAC software implementation, pmFAQtory’s job — among other things — is to take a holistic look at the organization’s IT environment, determine the interrelationships among the myriad systems, and ultimately ensure that all necessary data flows to and from the new CAC software.
How can pmFAQtory add value to your health care IT project? Contact us.
Diagnosis-related groups (DRGs) are one ingredient in medical coding’s “alphabet soup” that we’ve yet to cover. They facilitate Medicare’s inpatient prospective payment system, under which the U.S. government reimburses hospitals for treating Medicare patients.
The Medicare DRG system (MS-DRG) is maintained by the Centers for Medicare and Medicaid Services (CMS) and its latest revision, version 27, has more than 750 “groups.”
Taking a step back, we should note that DRGs are themselves classified into 25 major diagnostic categories (MDCs) based on organ system (eye, respiratory, etc.). After assignment into an MDC, the patient is matched to a DRG.
By sorting patients into DRGs, the government can reimburse providers on a “per episode” basis, as all patients in a particular DRG should theoretically use similar amounts of hospital resources and therefore cost the hospital about the same amount to treat. For any particular patient, the DRG system is meant to encourage hospitals to avoid unnecessary services and procedures, since their reimbursement amount is set at a fixed level.
Prior to the 1983 implementation of the DRG system, hospitals were simply reimbursed for costs they incurred serving Medicare patients. Like everywhere else, incentives matter in health care. When providers are paid more when they do more, they tend to do more. From 1967 to 1983, Medicare enrollment rose by barely 50 percent, but spending ballooned from $3 billion to $37 billion.
Under the DRG system today, each Medicare inpatient is evaluated based on his or her principal diagnosis, surgical procedure(s), age, sex, coexisting conditions, and status at discharge. Each DRG has a weight assigned to it, which represents how resource-intensive a particular condition (on average) is for the hospital.
For example, in fiscal year 2010, viral meningitis without complications or comorbidities (MS-DRG 076) has a weight of 0.8336. Contrast that with a lung transplant (MS-DRG 007), which is weighted at 9.4543. Clearly, a patient needing the latter costs the hospital more than someone treated for the former. The initial payment amount is computed by multiplying this weight by the payment rate specific to that hospital.
After this initial computation, the payment amount is adjusted by a number of additional factors:
- Wage conditions: Payments in high-wage areas of the U.S. are greater than those in low-wage areas.
- Share of low-income patients: Hospitals that serve a disproportionate number of low-income patients receive add-on payments.
- Indirect medical education: Approved teaching hospitals receive an add-on payment based on the ratio of medical residents to hospital beds.
- New technologies: Cases that use certain technologies receive add-on payments.
- Outlier cases: Cases with unusually high overall costs are eligible for additional payments.
So where does medical coding fit in?
Coding must be done before you can even start talking about DRGs. Diagnoses and procedures — more accurately, diagnosis and procedure codes — are two inputs for the DRG “grouper” algorithm that sorts patients into DRGs.
And as we’ve discussed before, improperly coded or undercoded cases can negatively impact how a private insurance company reimburses a provider for services rendered; so too can it affect DRG classification. When the assigned medical codes understate the severity of a patient’s condition — and therefore assign the patient into a lower-paying DRG — providers get underreimbursed.
Capturing every legitimate diagnosis and procedure maximizes reimbursement, regardless of whether it’s so the government can assign a Medicare patient to a DRG or so a private insurer can reimburse using a fee-for-service model.
Good medical coding is good business.
Stop leaving money on the table. pmFAQtory can help you optimize your coding and billing efforts. Get in touch with us today.
Over the past few weeks, we’ve talked a lot here about medical coding — what it is and how it’s done. At a fundamental level, hospitals and clinics code diagnoses and procedures so that they can get paid by a third-party payer or the patient.
That all-important “getting paid” part is where the charge master, also known as the chargemaster (one word) or the charge description master (CDM), comes in. The CPT (procedure) code of 97810 tells us that a patient received basic acupuncture, and the ICD-9-CM (diagnosis) code of 784.0 tells us it was related to the patient’s headaches, but nowhere does it tell us anything about cost.
A charge master is essentially a big list of every service, procedure, or item that could be billed to a patient — and its price. Each hospital or clinic develops its own charge master and formats vary. Charge masters allow health care providers to match services rendered with their appropriate charges. In some states, providers must make their charge masters available to the public.
Let’s look at the acupuncture example. Before generating a bill, the health care provider must find out what price is attached to CPT code 97810 (defined as “acupuncture, one or more needles, without electrical stimulation, initial 15 minutes of personal one-on-one contact with the patient”).
Think of the charge master as a spreadsheet. In the first column is a list of CPT codes. You’ll scroll down to the row representing 97810. In that row, you’ll find columns containing:
- The CPT code for that procedure (of course)
- A written description of the procedure
- The revenue code, a four-digit code indicating where the procedure took place (e.g., emergency department, outpatient clinic) or the general type of procedure performed
- The procedure price
- Organization-specific information (e.g., hospital/clinic department that performs the procedure)
For our acupuncture example, you might see: 97810; acupuncture, one or more needles …; 2101; $41.00; internal medicine. Depending on the organization, you might find additional information as well.
This data is then entered into a CMS 1450 (for institutional providers such as hospitals and outpatient clinics; form is also known as UB-04) or CMS 1500 (for physicians) claim form and sent off to the third-party payer. (You can look up examples of both forms on the Centers for Medicare and Medicaid Services website.)
For medical centers, an optimized charge master means increased revenue. If legitimate, chargeable items are missing from the charge master, the health care provider is missing out on that revenue. For example, a charge master might be missing a line item for the second part of a three-part procedure.
Or, a new procedure or service may not yet be included in the charge master, meaning it could be given to patients without them being billed for it. Likewise, a mistakenly billed charge — due to an outdated CPT code in the charge master — delays insurance reimbursements.
To remedy these issues, health care organizations should better educate their coding staff and physicians about the importance of charge capture. They can also perform audits — by manually comparing physician documentation with what was ultimately charged to the patient — to check for inconsistencies.
Software solutions can also add value by searching for out-of-date CPT codes or by applying logic to charges, sniffing out cases where you couldn’t perform procedure X without using supply/device Y, and yet X was billed while Y was not.
Do you know what’s in your charge master?
Don’t miss out on charges or take compliance risks. pmFAQtory can help. Please contact us to discuss your needs.
As we’ve discussed, medical coding is the process of assigning standardized numbers to diagnoses/diseases, causes of death, and inpatient and outpatient medical procedures. The primary reason for medical coding is to ensure consistent classification and billing, as it enables physicians, medical centers, and third-party payers to “talk” in the same language.
So where do these codes come from? There are four major “code sets” in the medical coding world, each with a different use:
- International Statistical Classification of Diseases and Related Health Problems (ICD), maintained by the World Health Organization
- International Statistical Classification of Diseases and Related Health Problems, Clinical Modification (ICD-CM), maintained by the Centers for Medicare and Medicaid Services and the National Center for Health Statistics
- Healthcare Common Procedure Coding System (HCPCS), maintained by the Centers for Medicare and Medicaid Services
- Current Procedural Terminology (CPT), maintained by the American Medical Association
Here’s how they fit together:
ICD-9: The ninth revision of the ICD code set, ICD-9 was used to classify mortality (death) in the U.S. until Jan. 1, 1999, and is now obsolete (replaced by ICD-10).
ICD-9-CM: The ninth revision of the ICD code set with “clinical modifications,” ICD-9-CM is used today in the U.S. to classify morbidity (diagnoses/diseases) and inpatient medical procedures. It consists of three volumes: volume one (tabular listing of diagnosis codes), volume two (index of diagnosis codes), and volume three (procedure codes). An ICD-9-CM code has between three and five characters, such as 560, 553.3, or 560.81.
ICD-10: The 10th revision of the ICD code set, ICD-10 replaced ICD-9 for classifying mortality in the U.S. as of Jan. 1, 1999.
ICD-10-CM: The 10th revision of the ICD code set with “clinical modifications,” ICD-10-CM is an expanded and revised version of ICD-9-CM, and will be put into use in the U.S. as of Oct. 1, 2013, to classify morbidity. An ICD-10-CM code has between three and seven digits; examples are M05.339 and S26.020D.
When you hear rumblings that medical centers are anxious about planned ICD changes, it’s this forthcoming implementation of ICD-10-CM across the U.S. that’s causing the angst.
HCPCS: A two-level code set used to classify outpatient medical procedures. Level one consists of CPT codes (see below), while level two classifies non-physician services and supplies, such as ambulance transportation and medical equipment.
CPT: Serves as HCPCS level one and is used in the U.S. today to classify all outpatient medical and surgical procedures (ICD-9-CM volume three is used to classify inpatient procedures). A CPT code has five digits, such as 39520 or 00756.
A subset of CPT codes, called evaluation and management (E&M) codes, are used to classify non-surgical physician visits/consultations.
Put another way, in the U.S. today …
- ICD-9-CM volumes one and two are used to classify morbidity
- ICD-9-CM volume three is used to classify inpatient hospital procedures
- ICD-10 is used to classify mortality
- HCPCS level one (CPT) is used to classify outpatient procedures
- HCPCS level two is used to classify medical equipment, supplies, and drugs
The intersection of medical coding and health care information technology — pmFAQtory’s field — is pretty clear-cut. For humans, sorting through various code sets and tens of thousands of individual medical codes, while at the same time ensuring compliance with payer regulations, is about as much fun as doing taxes by hand.
That’s why numerous technological solutions have surfaced to help medical centers more efficiently assign codes and ensure accuracy. pmFAQtory specializes in guiding health care organizations as they implement these systems, which sit within a complex health IT landscape. We’ll examine that landscape in more detail in the next few weeks.
Ever feel like your doctor speaks in code? To be sure, there’s often a communication gap between patients and physicians. But that’s a topic for another day.
The medical coding we’re talking about here is the type that exists in health care information technology — the realm in which pmFAQtory works. This kind of coding deals with numbers; specifically, it’s about assigning numbers to represent medical diagnoses and procedures. Medical coding means standardization and simplification. This concept is simple enough, but as we’ll see, the reasons for medical coding extend far beyond convenience.
Medical coding began in the mid-19th century as a way to more consistently classify causes of death. Today, coding is used to classify not only mortality (deaths), but also morbidity (diseases), and inpatient and outpatient medical procedures.
Two major “code sets” you may have heard about are International Statistical Classification of Diseases and Related Health Problems (ICD) and Current Procedural Terminology (CPT). We’ll dig deeper into each of these in the coming weeks.
So what implications does medical coding have for those working in the health care industry?
Medical centers (hospital, clinics, etc.) rely on accurate coding to get paid — literally. Only by properly coding (in terms of both accuracy and specificity) diagnoses and procedures can medical centers be reimbursed by third-party payers such as insurance companies or the government (Medicare at the federal level; Medicaid at the state level).
Third-party payers use medical codes to determine whether — and how much — to pay for a given procedure. They won’t pay for procedures performed without a supporting diagnosis. If a procedure is miscoded or not coded to the appropriate level of specificity, the payer may delay or deny reimbursement. These types of errors trickle down to patients, who are on the hook for charges not paid by their insurance company.
Biomedical researchers — such as epidemiologists — rely on medical coding when studying health outcomes over time. Instead of searching huge batches of medical records for a specific term or phrase — the use of which can vary throughout the U.S. or the world — researchers can search for the applicable code(s), which means better and faster research.
And that’s the tip of the iceberg, as they say. Next time, we’ll start exploring ICD and CPT, and their association with health care IT.
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Articles here are authored by members of the pmFAQtory team. Click an author's name to see profile information and read their latest posts, or view an index of all authors.