Coding and Coverage
All codes are descriptors. The best way to understand coding is to think of codes as words and code books as dictionaries. There are several different coding systems used by healthcare providers and payers, each of which may have some application to Stryker products. These include:
- CPT (Current Procedural Terminology)
- HCPCS (Healthcare Common Procedure Coding System)
- ICD-9-CM Diagnosis and Procedure Codes (International Classification of Diseases –9th Revision)
- Revenue Codes (facility cost center accounting and charge codes)
Using the proper codes to describe procedures, products, and the site at which the service is provided is an essential element of reimbursement, and is necessary to avoid liability for false claim submissions. However, proper coding does not ensure payment. Several other factors affect payment, including:
- Medical Necessity
- Reimbursement Systems
- Payer Edits (including CCI)
In general, CPT (“Current Procedural Terminology”) codes describe physician and other practitioner procedures. CPT codes are developed and maintained by the American Medical Association (“AMA”). It is important to note that procedure reimbursement is different than product reimbursement.
The American Medical Association gives the following general instructions regarding use of CPT codes:
- Select the name of the procedure or service that most accurately identifies the service performed.
- It is important to recognize that the listing of a service or procedure and its code number in a specific section of this [CPT] book does not restrict its use to a specific specialty group. Any procedure or service in any section of this book may be used to designate the services rendered by any qualified physician or other qualified healthcare professional.
According to the CPT manual, a modifier provides the means by which the reporting physician can indicate that a service or procedure that has been performed has been altered by some specific circumstance but not changed in its definition or code.
In the broadest sense, HCPCS (Healthcare Common Procedure Coding System) is the correct term for the codes used for all Medicare claims, and they are divided into three subsystems; Level I, II, and III codes. However, when people use the term “HCPCS codes” they usually are referring to the HCPCS Level II alphanumeric codes.
HCPCS Level I codes are the CPT codes developed by the American Medical Association. However, CMS does not recognize all CPT codes for Medicare payment purposes. Level II codes, which are the codes most commonly referred to as “HCPCS codes”, are alphanumeric codes used primarily to identify products, supplies, and services not included in the CPT codes (e.g., drugs, durable medical equipment, prosthetics, and supplies). Because Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT codes, the level II HCPCS codes were established for submitting claims for these items. These level II, or alphanumeric, codes are developed and revised cooperatively by CMS, the Blue Cross/Blue Shield Association and the Health Insurance Association of America. Even within the Medicare program, references to HCPCS codes usually refer to these level II alphanumeric codes.
ICD-9-CM - CM Diagnosis and Procedure Codes
ICD-9-CM diagnosis codes describe the clinical symptoms or causes of illness exhibited by the patient, or identify a patient’s status or condition. ICD-9-CM codes must be supported by information in the patient’s medical record.
Payers require that claims for benefits relate directly to treatment for the patient’s diagnosis. Claim forms must include the proper ICD-9-CM diagnosis code or codes. Many payers now regularly publish policies in which they list specific diagnosis codes that they consider supportive of medical necessity for specific procedures or services. Providers should review all such publications from their payers, especially if a notice of payment denial is received.
ICD-9-CM procedure codes, on the other hand, describe procedures used for the treatment of illness and injury. They are important for facility billing of Medicare Part A benefits. While there often are similarities between CPT procedure code descriptors and ICD-9-CM procedure code descriptors, the code systems are used independently. Usually, ICD-9-CM procedure and diagnosis codes are used for inpatient benefit claims, while CPT codes are used for ambulatory or outpatient benefit claims. Because facilities use ICD-9-CM procedure and diagnosis codes extensively, both Medicare and private commercial payers require their use on claim forms for inpatient benefits.
Revenue or UB-92 Codes
Revenue codes identify specific accommodations (e.g., private room, medical/surgical unit) or ancillary charges organized by cost or revenue center within healthcare facilities (e.g., hospitals), and are reported on the UB-92 (or CMS 1450) billing form. These codes are not used by doctors or other practitioners. Revenue codes may vary by payer and type of claim.
Other Factors Affecting Payment Availability and Amount
A basic requirement for coverage by most third party payers is that the item or service must be “medically necessary” for the treatment of illness or injury, although some payers do provide coverage for preventive services. The basic Medicare criteria is that items or services must fall within one of Medicare’s benefit categories (e.g., hospital services, physical therapy, durable medical equipment) and they must be “reasonable and necessary” as interpreted by law, regulations and by CMS and its contractors. The criteria for determining medical necessity vary from payer to payer.
Third party payers will not pay for a medical product or procedure unless the item or service is covered under the patient’s insurance policy, and such policies vary widely. However, many private payers will pre-authorize coverage for a particular product or procedure. Stryker Reimbursement Services can help with the preauthorization process for procedures involving Stryker products.
Medicare coverage is generally set by statute and regulation. Insurance companies or other entities typically enter into contracts with the Medicare program to process claims and implement Medicare policies on a local or regional basis. Generally, Medicare does not pre-authorize items or services.
If a product or procedure is covered, the payer will make some payment for it, however the methods by which the type or amount of payment is determined vary widely. For more information about these methods under Medicare, see Medicare Payment Systems. Even procedures or products that are covered may not be eligible for separate payment. As with coverage, Stryker Reimbursement Services can help during the preauthorization process for private payers to determine, in advance, the likely provider payment. Medicare payment rates are published, and Stryker Reimbursement Services can also help Stryker customers determine those amounts.
Many payers utilize automated health claims “edit” systems to issue preliminary denials of payment when certain codes are submitted together. Medicare’s Correct Coding Initiative (“CCI”) is one such system, but private payers may use CCI or another editing system when processing their claims. For example, many surgical codes include groups of other procedures that are “bundled” with the primary procedure. A primary surgical procedure often includes skin preparation, cut down, the surgery performed, and wound closure. CCI edits do not allow the billing of each component of the surgery separately and are revised quarterly CCI edits.