Medical Coding for Medicare/Medicaid Reimbursement

When coding for Medicaid and Medicare beneficiaries it is important to clearly understand the terms of reimbursement. Medicare and Medicaid are very particular about accurate coding and medical documentation, and inappropriate coding can lead to delays in claims processing, insufficient payments and other problems.

• Medical coders have to be thoroughly knowledgeable regarding HCPCS (Healthcare Common Procedure Coding System) codes that comprise Level I, and Level II codes. The Level I codes are the CPT (Current Procedural Terminology) codes managed by the American Medical Association (AMA) and the Level II HCPCS codes are managed by the Centers for Medicare and Medicaid Services (CMS). Level I codes are five digit codes used to report medical services provided by physicians and other qualified personnel. Level II codes are alpha numeric codes used to report non-physician services including durable medical equipment, pharmacy and ambulance services. The Level II codes were created to claim for these items that are not identified by the CPT codes.

• Another very important aspect regarding billing and coding for Medicare and Medicaid is the use of the correct modifiers. Modifiers can be 2 digit numbers, 2 letters or alphanumeric characters. Coders should know where to use these. These are used with CPT codes to identify any extra information regarding the service provided or the procedure performed. They signify multiple procedures provided in the same session, a procedure that was started and then discontinued, and the body part where the procedure was carried out. Modifiers might become necessary with Level II HCPCS codes also. In this case, they are used when particular circumstances have to be reported in relation to a service or item identified by a HCPCS code descriptor. With Level II codes, providers have to be thoroughly familiar with the code types – permanent national codes, dental codes, miscellaneous codes and temporary national codes.

• When billing for services provided, it is important to know the HCPCS/CPT codes that should not be reported together. This information is provided in the NCCI (National Correct Coding Initiative) developed by the CMS. The two NCCI edit tables are ‘Column One/Column Two Correct Coding Edit Table’ and ‘Mutually Exclusive Edit Table.’ They list edits which are HCPCS/CPT codes that cannot be reported together. When 2 codes of an edit pair are reported together, the first code will be paid and the second denied unless the provider also reports an NCCI associated modifier that identifies the necessity of using the two codes.

• The diagnostic codes (ICD-9 codes) have to be correctly linked to the procedural codes to avoid denials. The procedures must be identified as medically necessary and therefore coding has to be done to the highest level of specificity.

• Unbundling is regarded as fraudulent or careless billing – this is the practice of billing individual components of a multiple component service as single services. Unbundling might lead to an audit and so has to be avoided.

• Undercoding is not coding for a service that has been performed just because the coder has not clearly interpreted the physician’s report.

• Overcoding is another error to be avoided – this is billing for a more complex procedure than one that was actually performed.

• Medical coders have to be very diligent regarding updates to the medical codes. Failure to stay abreast with the various CPT code updates will result in incorrect coding and claim denials.

How to Ensure that the Correct Amount Due is Reimbursed

Medical coding is the starting point and the most important aspect with regard to the medical reimbursement process. The staff in a physician’s practice may not always be thorough with the complex medical coding requirements. A dedicated medical billing company can be of great support with cost-effective medical billing and coding services. The greatest advantage of such a professional company is that it will have skilled and trained coders to provide accurate coding. They will have in-depth knowledge regarding the reimbursement methodology and physician fee schedules of Medicare and Medicaid. The entire process of medical coding is audited and the professionals ensure that all codes used are based on the AMA and CMS guidelines. There is little room for error, and the physicians benefit from accurate reimbursement and fewer claim denials.