Lesson 1
CODING
Objectives
Coding
Codes are used to record patients' diagnoses and treatments.
Codes can be all numbers, or they can be a combination of letters and numbers.
They represent diseases, injuries, medical procedures, examinations, and equipment.
Codes are easier to document and reference than written descriptions. They are also more precise, which makes them useful for transferring information between health care provider and insurance carrier.
The codes are used to complete the insurance claim form, through which providers communicate with insurance carriers.
Coding
Types of Codes
Codes can be either diagnostic or procedural:
Types of Codes
History of Diagnostic Coding
A standard system of coding first appeared at the end of the seventeenth century.
Health practitioners in England categorized data on causes of death in a document called London Bills of Mortality.
History of Diagnostic Coding
Over the next few centuries, this trend spread internationally. In the 1830s, the International List of Causes of Death reported data on causes of death around the globe. This document also was the first to show a standard organization of codes: diseases were classified by anatomic location.
In 1893, this organization became more evolved with the Bertillon Classification of Causes of Death, which later became known as the International Classification of Causes of Death. It was used as the standard classification system in North America until the mid-twentieth century.
1830
1893
History of Diagnostic Coding
By 1948, the World Health Organization (WHO) was publishing reports on disease and causes of death in the International Classification of Disease. This document was used to index hospital records, categorizing them for medical research.
In 1977, the United States began using the International Classification of Disease to code medical records according to diagnoses. This allowed diseases to be classified and studied.
1948
1977
History of Diagnostic Coding
In 1979, this classification was modified for use in medical billing and insurance claims. This is the manual used in the medical office today: the International Classification of Disease, 10th Edition, Clinical Modification, or ICD-10-CM.
The ICD code set is updated periodically to reflect changes in medicine and clinical practice. On October 1, 2015, the code set was updated to the ICD-10 code set.
1979
2015
History of Procedural Coding
Procedural coding appeared in the 1960s. The American Medical Association (AMA) recognized a need for classification of services for data collection and reimbursement. In response, it developed the CPT codes to standardize procedural terms.
1960
The current edition, the Physician’s Current Procedural Terminology, 4th Edition, or CPT-4, was published in 1977.
1977
In 1983, CPT was included as Level I of the HCPCS system. HCPCS was developed as a procedural coding manual which contained codes not found in the CPT-4. The HCPCS and CPT-4 manuals work together as one system to provide procedural coding for claims and statistical data.
1983
ICD Codes
The International Classification of Diseases, or ICD, codes are published by the United States Department of Health and Human Services. This publication is supervised on an international level by the United Nations’ World Health Organization (WHO).
The ICD code set is used in the medical office to provide diagnostic codes.
ICD Codes
The ICD-10-CM code set is 3-7 characters long.
Each additional character after the decimal point adds more information to the disease or condition represented by the first three characters.
Each ICD-10 code starts with a letter, and there are three characters before a decimal point.
This means that the more characters that an ICD-10 code has, the more specific it is.
CPT Codes
The Current Procedural Terminology, or CPT, provides diagnostic, therapeutic, and surgical codes for all the services that medical staff may perform. The CPT codes were added as part of the HCPCS code set, and are sometimes referred to as Level I HCPCS codes.
The CPT data is used by medical providers to report the procedures they performed to the patient's insurance carrier. It is also used for reimbursement. This means that the doctor charges for a certain procedure, such as surgery, and the appropriate CPT surgery code is attached to the charge. The code is then sent to the insurance company.
CPT Codes
All CPT codes are 5 numbers long. If the doctor needs to add more information or modify the CPT code, the doctor can add a modifier, which is two extra digits added to the end of the code.
HCPCS Codes
HCPCS is the code set maintained by the Centers for Medicare and Medicaid Services (CMS). CMS requires the use of HCPCS codes on its claims, and only accepts CPT codes when there is no HCPCS code that is available.
HCPCS codes are known as Level II codes, or HCPCS National codes. These codes represent a variety of medical services, supplies, drugs, and durable medical equipment not found in CPT codes.
HCPCS is the required method of reporting for all Medicare Part B claims.
Purposes of Coding
Currently, the medical office uses ICD, CPT, and HCPCS coding for two reasons:
For each covered procedure performed, an insurance carrier must reimburse, or pay back, the health care provider. The amount should cover the cost of performing the procedure. That is why it is so important to code the procedure correctly. Because the procedure must relate back to the diagnosis for medical necessity, the diagnosis must also be coded correctly.
Summary