AHLA Basic Coding for Lawyers Presentation

Coding and Reimbursement Basics for Lawyers : Understanding our (not so) little corner of the healthcare industry… American Health Lawyers Association

Jeffrey E Sinaiko Sinaiko Healthcare Consulting, Inc. President 310-551-5252 [email_address] Kelly C Loya, CPC-I, CPhT Sinaiko Healthcare Consulting, Inc. Senior Consultant 310-551-5252 [email_address] Presenters

Goals Gain a basic knowledge of the purpose and differences of CPT, DRG, MS-DRG, HCPCS and ICD-9 coding; Identification of different types of coding professionals; Understand the impact of medical care translation into billing data as it relates to legal issues; Evaluate how coding directly impacts billing (positively, negatively and legal concerns); Describe compliance deficiencies related to coding; Understand the specifics of coding audits to identify core issues including problem sources and potential correction; and How to manage them under privilege and interpret the results.

Not all codes are created equal ICD-9-CM, DRG, MS-DRG, CPT, HCPCS, … What’s the difference? What does it all mean?

The Coding System: ICD-9-CM International Classification of Diseases – Clinical Modifications: 9 th Revision (ICD-9-CM) Also referred to as “diagnosis coding” “ Why” services are rendered “ CM” indicates clinical modifications of the system for use in the US Volume 1: A tabular listing of medical conditions maintained by the World Health Organization (WHO) Volume 2: Alphabetic Index Volume 3: Procedures used by hospitals only Compliance issues may indirectly relate to ICD-9 coding (e.g. medical necessity), but generally are not directly tied to diagnosis selection.

“DRG” and “MS-DRG” Diagnostic Related Group (DRG) Hospital cases are grouped into one of approximately 500 groups, using ICD-9, ICD-9-CM codes and other patient specific demographics; Each DRG is expected to represent similar hospital resource use; Developed for Medicare, Prospective Payment System; and Payment based on the hospital resource expected use. Medicare Severity DRGs (MS-DRGs) Implemented in October 2007; Modification of the DRG payment methodology; and Represents a comprehensive approach to applying a severity of illness stratification for Medicare patients throughout the DRG classification system based on resource use and case complexity.

History of Diagnosis Coding Source: CMS “ Diagnosis Coding Using the ICD-9-CM ” CMS Proposes to replace ICD-9-CM with ICD-10 by Oct. 2011! 2008 The coding and reporting requirements published in 1994 by the Centers for Medicare & Medicaid Services (CMS) outlined basic steps that physicians should use to ensure correct coding. 1994 Since the passage of the Medicare Catastrophic Coverage Act of 1988, providers have been required to submit a diagnosis code on claim forms in order to receive reimbursement. 1988 The ICD-9-CM, or International Classification of Diseases, Ninth Revision, Clinical Modification, was published for use in 1979. 1979 The ICD-9 (without the CM for Clinical Modification) was used for coding in the U.S. from 1948 to 1979. 1948 Some form of medical diagnostic coding dates back to 17th-century England. 1600s

ICD-10 Implementation U.S. Implementation scheduled October 1, 2011 Improve Disease Tracking Speed Transition to an Electronic Health Care Environment ICD-9 is over 30 years old with limited space ICD-9 lacks necessary detail ICD-9 17,000 codes v. ICD-10 68,000 codes HHS proposed rule appears flawed Will we be ready? Massive requirements for implementation!

The Coding System: HCPCS Healthcare Common Procedure Coding System (“HCPCS”) “ What” service or supply was provided Level 1 : Current Procedural Terminology (CPT) codes maintained by the AMA (ex: 99213) Level 2 : Alpha-numeric codes (ex: G0105) Level 3 : Local codes were eliminated by HIPAA in October 2002

The Coding System: At A Glance ICD-9-CM Used to describe WHY services are rendered Volume 1: Tabular listing of medical conditions, causes and/or status Volume 2: Alphabetic index (Used first in locating condition in Volume 1) Procedure Codes Used to describe WHAT services/ supplies provided HCPCS (For other than hospital inpatients) ICD-9-CM Volume 3 (For hospital inpatients) HCPCS Level 1 CPT Codes (AMA) HCPCS Level 2 HCPCS (CMS, BCBSA, AHIP) Category 1 Items commonly accepted in clinical practice Category II Used to track performance measures Category III New and emerging technologies

The Experts: Certified Coders Certification demonstrates competence in medical coding. Both major national certification organizations – AAPC and AHIMA for both professional fee and facility coding require: Practical coding experience; Successful completion of testing requirements, in order to hold an active credential; and Continuing education units (CEUs) to maintain certification.

American Academy of Professional Coders (AAPC) The Certified Professional Coder (CPC) CPC-A: pertains to an apprentice (w/out required experience) CPC: pertains to professional-fee coding CPC-P: pertains to adjudication of provider claims CPC-H: pertains to hospital outpatient/facility coding Specialty certifications exhibit further detailed competence in specific areas: PMCC Instructors Specific Specialty Competence

American Health Information Management Association (AHIMA) American Health Information Management Association (AHIMA) The Certified Coding Specialist (CCS) CCA: pertains to associate (entry level skills) CCS: pertains to hospital inpatient & outpatient/facility coding CCS-P: pertains to professional fee coding

Who Requires Certified Coders? Who requires certified coders ? CMS Transmittal 18: 9/8/2006, effective 10/2/2006 significant changes to the Medicare Contractor Beneficiary and Provider Communications Manual (PUB. 100-09) 30.5.1 Requires Provider Relations Research Specialists to have at least one certified coder on staff to ensure accurate expertise in response to inquires; and DME MACs (previously DMERC) are exempt from the PRRS requirement. 34 states from 2004-2007 held “State Coders Day” Many organizations require certification at the time of hire Project X-Tern National Coding Shortage

Translation: Basic Documentation The Medical Record- a legal document and more Basic requirements for valid medical records The “ Golden Rule ”: “not documented, not done” (or at least “not billable”) Authentication/Provider Signatures CMS requirements: CR 5971 (Transmittal #248) Federal requirements: 42 CFR 482.24, 424.10 Date of service Patient Identification in the Medical Record

Translation: A True Art The science of medical care is inherent Understanding the translation of medical care into data, now that’s an Art! How does it make a difference? ICD-9 Proves or disproves ethical valid reasoning for the services provided (validates medical necessity) Medical Rules, Regulations and Policy: not “nice to haves” Is reimbursement justified? Supporting documentation- Example effects of inaccuracy for patients Legal and Compliance implications

Medical Necessity Medically Necessary v. Medically Appropriate Medically Appropriate- a service that a clinician feels will benefit the patient’s health and well being; Medical Necessity is required for a specific insurance benefit; The service may benefit the patient, but it may not be a covered benefit under the insurance plan; Medical Policies exist to provide a guideline for coverage and payment; and Policies can be challenged and modified if proven inadequate.

Medical Necessity: Coding Tells a Story… Story 1: CPT Procedure is for a Throat Culture ICD-9 Code states High Cholesterol This does not paint the picture of necessity ICD-9 of a “Sore Throat” does. Story 2: CPT procedure code states Gastric By-pass ICD-9 indicates Obesity May be for the patient’s well being, but may not be medically necessary. (Any argument? Therein lies the appeals process!)

Translation: A True Art How does it make a difference? HCPCS/CPT Describes EXACTLY, what service is rendered Drive determination for covered benefits Details service level and type Time and complexity involved Code Data is used to determine “outliers”

Translation: Where the money is… Modifiers- alter or adds information to the service Informational modifiers (Ex: GC, GA, KH, GY) Payment modifiers (Ex: 22, 58, 59) Quantity Place of Service (office 11 v. outpatient 21) PQRI

Compliance: Common Deficiencies OIG Workplan- Annually provides a framework for suspected high risk payment concerns. Common industry-wide findings overview: Consultations Wound Care Services “Incident to” services Physicians at Teaching Hospitals (PATH) E&M Levels and typical Bell Curves

Common Deficiencies (continued) Common industry-wide findings overview: Separate payment of E&M in addition to other services Modifier usage Diagnosis linking and assignment Chiropractic Services and medical necessity Clinical Trial Billing (continued risk area)

Common Audit Findings Misrepresentation of the level of service rendered and documented (“over/under E/M coding”); Use of modifiers to “get the claim paid”: Modifiers 25, 59; and the Anatomical modifiers; Unbundling; Use of modifiers for higher reimbursement: Omission of modifier 26; Modifier 22; Reporting inappropriate place of service; and Teaching physician services: incomplete documentation.

Common Audit Findings Inappropriate use or not using waivers and Advanced Beneficiary Notices (“ABNs”) Services billed “Incident to” for higher reimbursement without appropriate supervision/documentation Misrepresentation of services ICD-9 used to fit medical policy, not supported 238.9 v. 239.9 Chiropractic services (Necessary v. Maintenance) Use of modifier KX DME: Supplies not delivered, patient refused or provided without supported medically necessary Misrepresenting preventive services as medically necessary

RAC Audit Findings CMS Recovery Audit Contractor (RAC) Status Document FY2007 states: “The Improper Medicare FFS Payments Report for November 2007 estimates that 3.9 percent of the Medicare dollars paid did not comply with one or more Medicare coverage, coding, billing, or payment rules.” “This equates to $10.8 billion in Medicare FFS overpayments and underpayments.”

Coding Audit: A Lawyer’s Perspective Purpose or Intent Clearly define: What is the focus and what information is needed? Internal: compliance plan self audit activities; routine, to determine extent of suspected problem or risk External- discovery/self disclosure or as the result of an investigation/carrier request Audit Types Performed under Privilege... or not? It’s up to you General Rule: Prepayment v. Retrospective Prepayment v. Post-payment Probe v. Statistically Significant v. OIG Protocol

Coding Audit: A Lawyer’s Perspective What information to request Charge data Assembly of medical records Supporting policies/procedures Internal billing system hard edits/ auto-population of claim fields? What to expect Many great coders. Many less with consulting or broader compliance experience needed for expected deliverables with analysis (e.g. coding related compliance issues, site service, scope of practice…) Process can be time consuming during medical record assembly/delivery Organization is key for impact on timing, fees and results

Coding Audit: A Lawyer’s Perspective What to manage (criteria) Expectations Audit definition and delivery Organization of data/documentation Correspondence between auditor and Client Type, format and expectation of deliverables Accuracy calculations Volume error rate Payment error rate

Coding Audit: A Lawyer’s Perspective How to understand and use common findings Was the result statistically valid? Was the audit performed within OIG-standards? Do not use a probe sample for extrapolation Always use as an opportunity to improve processes. Always refund any agreed upon error in actual overpayments identified to the appropriate Carrier within a reasonable timeframe.

OIG Workplan 2009: Sample Items ‘Incident to’ services- qualifications of clinicians billing incident to a billing provider; E&M modifier 24 use- inappropriate unbundling of visits within the surgical package; Clinical Social Worker billing- payments sought in addition to the cost report; Sleep study use- could lead to DME investigation for CPAP; Chiropractic services- Acute v. Maintenance services. Use of Modifier “AT”; and MS-DRG- patterns & trends since 10/2007.

Summary Coding: “Our little corner of the world” Now we can understand while coding is a small piece of the big picture, it has a big impact! ICD-9 = WHY CPT, HCPCS= WHAT ICD-9/CPT determine appropriate payment and benefit coverage. Analysis of code data elements for “outliers” can lead to further investigation.

AHLA Basic Coding for Lawyers Presentation

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AHLA Basic Coding for Lawyers Presentation