Insurance, Coding and Prior Authorization

This is Unit Twenty-Six of Medical Assistant Prep. Unit Twenty-Five protected the electronic record. This unit follows what leaves the record for payment: insurance plans, prior authorization, and the codes that turn a visit into a claim. Carry one idea through this lecture. Code exactly what the record supports, no more and no less, and complete every request in full before it goes out. Two constructed cases at the end apply that idea to a visit's codes and a prior authorization. By the end you will be able to explain the basic insurance terms and plan types. To manage prior authorizations and referrals. To describe the two code sets and how codes are built. And to apply the outpatient coding guidelines.

Five entries on insurance: why coding matters, premiums and deductibles, plan types, Medicare and Medicaid.

A visit as codes.

MAS 626 Why Coding Matters

Coding turns a visit into standard codes that describe why the patient was seen and what was done. Diagnosis codes explain the reason for care; procedure codes describe the services and supplies; together they support a claim for payment. Codes must match the documentation exactly; code only what the record supports.

Premium and deductible.

MAS 627 Insurance Basics: Premium and Deductible

Health insurance involves several kinds of payment by the patient. The premium is the regular cost of the plan; the deductible is the amount the patient pays before the plan pays anything, and it usually applies per person each calendar year. Explain the practice's payment policy, but leave detailed benefit questions to the plan or the billing staff.

HMO, PPO, high-deductible.

MAS 628 Types of Health Plans

Common plan types include HMOs, PPOs and high-deductible plans. An HMO often requires a referral from the primary care provider before a specialist visit; a PPO has in-network providers with lower costs and allows out-of-network care at higher cost. Checking a plan's referral rules before booking prevents denied claims.

Four parts.

MAS 629 Medicare and Its Parts

Medicare is the federal health insurance program with four parts. Part A covers hospital and skilled nursing care; Part B covers doctors' services and outpatient care; Part C is Medicare Advantage, offered by private plans; Part D covers prescription drugs. Ask Medicare patients whether they have original Medicare or a Medicare Advantage plan, because billing differs.

Run with the states.

MAS 630 Medicaid

Medicaid is the largest source of health coverage in the United States. It is run jointly with the states, so the services it covers vary from state to state. Coverage rules differ by state, so follow your own state's Medicaid requirements and the practice's billing process.

Two entries on prior authorization: what it is, and the six steps of managing one.

Before certain services.

MAS 631 Prior Authorization

Many plans require approval before certain tests, procedures, surgeries or medications, called preauthorization or prior authorization. The request goes to the plan with the information it requires, and the plan approves or denies it. Without required approval, the plan may refuse to pay, leaving the patient with the bill.

Check, gather, submit, follow up.

MAS 632 Managing Authorizations and Referrals

Managing authorizations and referrals follows a sequence. Check whether the plan requires one for the ordered service. Gather what the plan requires, such as the diagnosis, the service and supporting documentation. Submit by the plan's process, before the service is scheduled. Record the request, the date and any reference number. Follow up until a decision arrives, and record the approval or denial. Tell the provider about any denial so the provider can decide the next step. An incomplete request can delay treatment, so complete each form in full first.

Six entries on the code sets: the two kinds, HCPCS levels, CPT, modifiers, and building and finding a diagnosis code.

Diagnosis and procedure.

MAS 633 Two Kinds of Codes

Two main code sets describe a visit: diagnosis codes and procedure codes. Diagnosis codes come from the ICD-ten-CM classification; procedure and supply codes come from the HCPCS system, which includes CPT. Every procedure on a claim must be linked to a diagnosis that justifies it.

CPT and supplies.

MAS 634 The Two Levels of HCPCS

The HCPCS coding system has two main levels. Level one is CPT, a numeric system maintained by the American Medical Association for procedures and services; level two covers supplies and services not in CPT, such as ambulance services and durable medical equipment. CMS maintains level two codes; questions about CPT codes go to the AMA.

Current year, documented only.

MAS 635 Using CPT Codes Responsibly

CPT codes describe what the provider did, and choosing them depends on the documentation. Use the current year's code set in the practice's software or code book, because codes are added, revised and deleted over time. Never choose a code because it pays more; code only what was documented.

More information.

MAS 636 Modifiers

Modifiers are added to procedure codes to give more information about the service. Federal billing guidance stresses using the proper modifiers with procedure codes so that claims are accurate. A missing or wrong modifier can cause a claim to be denied or paid incorrectly, so check each one against the documentation.

Three to seven.

MAS 637 How ICD-10-CM Codes Are Built

ICD-ten-CM diagnosis codes have three to seven characters. The first characters identify the category, and further characters add detail; some categories need a seventh character, and a placeholder character holds positions when a code is shorter. A code missing a required character is invalid, and the claim will fail.

Index, then list.

MAS 638 Finding a Diagnosis Code

The official guidelines describe two main steps for finding a diagnosis code. Find the main term for the documented condition in the Alphabetic Index and note the code it points to. Verify that code in the Tabular List, the numbered list. Read the instructional notes in both, which can require extra codes or exclude others. Assign the code to its full number of characters. Never code from the index alone, because the list holds notes and required characters the index does not show, and those can change which code, or how many, the visit needs.

Nine entries on outpatient coding: first-listed, uncertain, symptom, coexisting, Z and seventh-character codes, the claim form, and two constructed cases.

Main reason first.

MAS 639 The First-Listed Diagnosis

In the outpatient setting, the main reason for the visit is called the first-listed diagnosis. List first the code for the condition chiefly responsible for the visit, then the codes for other conditions that affect care. In outpatient coding, the term principal diagnosis is not used.

Possible is not confirmed.

MAS 640 Do Not Code Uncertain Diagnoses

In outpatient coding, diagnoses documented as probable, suspected, rule out or working are not coded as if confirmed. Instead, code to the highest degree of certainty for that visit, such as the symptoms, signs or abnormal test results. Coding a suspected disease as confirmed attaches a diagnosis the patient may not have.

Before a diagnosis.

MAS 641 Coding Signs and Symptoms

Codes for signs and symptoms may be used when a definitive diagnosis has not been established. A sign or symptom can also be coded with a related diagnosis when it is not routinely part of that diagnosis; the definitive diagnosis comes first. Do not add a symptom code that is a routine part of the diagnosis already coded.

Affecting care.

MAS 642 Coexisting Conditions

Code all documented conditions that coexist at the visit and affect the patient's care, treatment or management. A patient seen for a sinus infection who also has diabetes affecting treatment would have both coded. Do not code conditions that were treated before and no longer exist.

Not disease or injury.

MAS 643 Z Codes

Z codes describe reasons for an encounter other than a disease or injury, and they can be used in any setting. They cover situations such as routine visits and status information, and they may be listed first or as additional codes. Z codes are not procedure codes; a procedure still needs its own procedure code.

Stage of care.

MAS 644 Seventh Characters for Injuries

Many injury codes use a seventh character to show the stage of care. For example, an injury's follow-up care is coded with the injury code and a seventh character for a subsequent encounter, not with a general aftercare code. Check the Tabular List for which seventh characters apply to each code.

Electronic or paper.

MAS 645 The Claim Form

Professional services are billed on a standard claim form, either electronically or, in limited cases, on paper. The electronic format is called the eight thirty-seven P, and the paper form is the CMS fifteen hundred; both carry the patient's information, diagnosis codes and procedure codes. Paper claims are allowed only in certain situations; most claims must be sent electronically.

Possible pneumonia.

MAS 646 Coding a Visit From the Note

A constructed case pays off the opening idea. Where assistants help prepare claims for review, a note reads: cough and fever for three days; possible pneumonia, chest X-ray ordered; type two diabetes, controlled, considered in treatment; history of appendectomy. Pneumonia is only possible, so she codes to the highest certainty: cough and fever, listed first. The diabetes affected treatment, so it is coded too. The past appendectomy is not coded as current. Each code goes from the index to the list, notes read, characters complete, and she submits the codes for the provider's and billing staff's review. A later confirmed diagnosis will be coded at that visit. The guidelines kept a suspected disease off the record and a cured one from looking current.

An imaging test for an HMO patient.

MAS 647 A Prior Authorization Done Right

A second constructed case runs a prior authorization. The provider orders advanced imaging for an HMO patient, and the plan requires authorization. The assistant gathers the patient's information, the documented diagnosis codes, the test and supporting notes, completes every field, submits, and records the date and reference number. Following up two days later, she learns the plan wants one more note and sends it that day. She records the approval, its number and covered dates, schedules the test within them and tells the patient. A denial would have gone to the provider at once. Checking first, completing everything and following up kept the test on schedule and the patient from an unpaid bill.

Look at what you can now do. You can explain premiums, deductibles, plan types, Medicare's four parts and Medicaid. You can manage a prior authorization from checking the requirement to recording the decision. You can describe diagnosis and procedure codes, the two HCPCS levels and modifiers, and find a diagnosis code in the index and verify it in the list. And you can apply the outpatient guidelines, coding exactly what the record supports. Unit Twenty-Seven turns to scope, consent and ethics.