17 Diagnostic Coding CHAPTER OUTLINE DIAGNOSTIC CODING LOCATING THE APPROPRIATE THE FUTURE OF DIAGNOSTIC Inpatient Versus Outpatient Coding CODE CODING: INTERNATIONAL Using the ICD-9-CM Conventions CLASSIFICATION OF DISEASES, ICD-9-CM: THE CODE BOOK Main Term TENTH REVISION Volume 1: Tabular List of Diseases Fourth and Fifth Digits Volume 2: Alphabetic Index to Primary Codes Diseases When More Than One Code Is Volume 3: Inpatient Coding Used Coding Suspected Conditions Documentation Requirements ROLE DELINEATION COMPONENTS GENERAL: Legal Concepts • Obtain reimbursement through accurate claims • Perform within legal and ethical boundaries submission ADMINISTRATIVE: Administrative Procedures ADMINISTRATIVE: Practice Finances • Perform basic administrative medical assisting • Perform procedural and diagnostic coding functions CHAPTER COMPETENCIES LEARNING OBJECTIVES Upon successfully completing this chapter, you will be able to: 1. Spell and define the key terms 4. Describe the relationship between coding and 2. Name and describe the coding system used to reimbursement describe diseases, injuries, and other reasons for 5. Explain the format of the ICD-9-CM encounters with a medical provider 6. List the steps in identifying a proper code 3. Give four examples of ways diagnostic coding is 7. Name common errors in outpatient diagnostic used coding KEY TERMS advance beneficiary notice etiology late effects primary diagnosis audits inpatient main terms service conventions International Classification of medical necessity specificity cross-reference Diseases, Ninth Revision, outpatient V-codes E-codes Clinical Modification eponym 279 280 Section II ■ The Administrative Assistant CODING, AT ITS SIMPLEST, is the assignment of a number based on the International Classification of Diseases, Ninth Re- to a verbal statement or description. Medical coding is any- vision (ICD-9), developed by the World Health Organization thing but simple. The International Classification of Dis- (WHO). The CM, which stands for clinical modification, eases, Ninth Revision, Clinical Modification is a system for addresses the intent of these codes to describe the clinical transforming verbal descriptions of disease, injuries, condi- picture of the patient. These codes are much more precise tions, and procedures into numeric codes. It is essential that than those needed for statistical grouping and trend analysis the physician and medical assistant work together to achieve found in the ICD-9 and used in hospital coding. accurate documentation, code assignment, and reporting of The ICD-9-CM, which is now mandated by Health Insur- diagnoses and procedures. Use of standardized codes makes ance Portability and Accountability Act of 1996 (HIPAA), is it easier for third-party payers to understand the reason for the most current and comprehensive statistical classification the patient’s encounter with the health care provider and in- of its kind. Containing more than 10,000 diagnostic codes creases the likelihood of timely processing of claims and and 1,000 procedure codes, it consists of three volumes: prompt payment when appropriate. Coding is a way to standardize medical information for • Volume 1: Tabular List of Diseases purposes such as collecting health care statistics, performing • Volume 2: Alphabetic Index of Diseases a medical care review, and indexing medical records. It is also • Volume 3: Tabular List and Alphabetic Index of Pro- used for health insurance claims processing (see Chapter 16). cedures Because coding is the basis for reimbursement, it is imperative The ICD-9-CM code books are available from several that you code patient visits accurately and precisely. Incorrect, publishers, and although the presentation of the material may insufficient, or incomplete coding on claims forms can lead to be different, the content must be the same. Depending on the nonpayment for the physician as well as incorrect information publisher, these three volumes may be included within one in the insurance companies databases, which may effect the book. In the physician’s office, only Volumes 1 and 2 are patient’s insurability. For example, if a patient complaining of used. Volume 3 is used by hospitals. chest pain is coded as having “acute myocardial infarction” in- The diagnostic classification systems in Volumes 1 and 2 stead of “chest pain rule out myocardial infarction,” that pa- are maintained by a federal government agency, the National tient may be incorrectly labeled as having heart disease. The Center for Health Statistics (NCHS); the procedure classifi- Current Procedural Terminology (CPT) codes, used to report cation (Volume 3) is maintained by the Centers for Medicare services and procedures performed by health care providers, determine the amount paid (see Chapter 18), but the code as- & Medicaid Services (CMS), the federal agency that regu- signed to the diagnosis or reason for the service or procedure lates health care financing. All three volumes are updated proves the medical necessity for the services or procedures so regularly, with codes being added, revised, and sometimes that claims are paid. The third-party payer needs to know why deleted. Changes in the ICD-9-CM are published by NCHS the service was performed to assess medical necessity. Med- and CMS with the approval of WHO. Both the American ical necessity means the procedure or service would have been Health Information Management Association (AHIMA) and performed by any reasonable physician under the same or sim- the American Hospital Association (AHA) advise and assist ilar circumstances. The ICD-9 diagnostic codes convey this in- in keeping the classification system current. formation. Is a chest radiograph medically necessary for a pa- tient who has gout? No, but it may be necessary for a patient Checkpoint Questions with acute bronchitis. The diagnosis justifies the procedure. Since Medicare considers certain procedures medically 2. What are the three volumes of the ICD-9-CM necessary only at certain intervals, having the patient sign an system? advance beneficiary notice (ABN) will ensure payment of 3. What organization must approve any changes in treatments and procedures that will likely be denied by the disease classification system? Medicare. An example is a Pap smear for a low-risk woman, which will be paid for once every 2 years. If the physician Inpatient Versus Outpatient Coding considers it not to be medically necessary, but the patient wants a Pap test, the patient will be responsible for payment There is a big difference between coding medical claims in a and must sign an ABN. hospital or other inpatient facility and coding for the physi- cian in an outpatient medical practice. The systems and ref- erences used to assign codes to third-party claims is only one Checkpoint Question difference in the coding requirements and practices of the 1. What is meant by medical necessity? physician and the inpatient medical facility. Volumes 1 and 2 of the ICD-9 CM are used to report the diagnostic code that DIAGNOSTIC CODING justifies physician services whether those services are pro- vided in the office or in the hospital. Hospital coders use International Classification of Diseases, Ninth Revision, Clinical Volume 3 to report inpatient procedures, services, and sup- Modification (ICD-9-CM) is a statistical classification system plies, as well as the reasons for the services. Chapter 17 ■ Diagnostic Coding 281 The UB-92 (uniform bill) is used by institutions to report addition to using a code book, you will need reference mate- inpatient admissions and outpatient and emergency depart- rials such as a medical dictionary and/or medical dictionary ment services and procedures. These charges are for nursing software. services, building maintenance, and all costs associated with To ensure accurate coding, update your ICD-9-CM coding running the institution. These charges do not include physi- books and software as needed. (Updates and addenda can be cian services. The CMS-1500 (universal claim form) is used purchased from the publisher of your coding book.) You to report physician services, whether the physician sees the must update codes on superbills (preprinted bills listing a va- patient in the office, emergency department, hospital, or riety of procedures) or any other forms you use. Experts nursing home, because even though the physician may have have estimated that millions of dollars in reimbursement been in the hospital, it is his service for which we are billing have been lost because an incorrect code was taken from a in the medical office. standardized form that had not been updated. New codes are The term outpatient is used to describe patients treated in published each October, and most third-party payers require the following places: their use after January 1. • Health care provider’s office • Hospital clinic Checkpoint Question • Emergency department 5. How often is the ICD-9-CM updated? • Hospital same-day surgery unit or ambulatory surgical center that releases the patient within 23 hours • Observation status in a hospital (the patient is admitted Volume 1: Tabular List of Diseases for a short time for observation only, and the physician Volume 1 contains the classification of diseases (conditions) bills for his or her service during the stay) and injuries by code numbers. Figure 17-1 shows the table of The term inpatient refers to a patient who is admitted to contents from this volume. These 17 chapters cover group- the hospital for treatment with the expectation that the pa- ings of diseases and injuries by etiology or cause (e.g., in- tient will remain in the hospital for 24 hours or more. fectious diseases) and by anatomic system (e.g., digestive, Hospital coders code only services provided by the hospi- respiratory). Each chapter has a heading or title (e.g., 16, tal and hospital employees. Coders who are employed by the Symptoms, Signs, and Ill-defined Conditions (780–799). physician practice are concerned with the services provided Following the title in parentheses is the range of three-digit by the physician no matter where the services are provided. categories included in that chapter.