Medical Coding: Things You Need to Know About RCM Medical Coding 

A critical aspect of the healthcare revenue management cycle, rcm medical coding requires precision and accuracy. Error-free medical coding helps healthcare companies and insurance organizations identify and compensate for medical services. RCM Medical coding not only helps in identifying issues related to clinical documentation but also produces clear claims while generating revenue without compromising on quality.

As per a study by the Annals of Internal Medicine in 2020, administrative costs made up about 34% of the total healthcare expenditures in the US. That is where over $812 billion is spent each year on administrative costs by providers and insurers.

What is RCM Medical Coding?

The RCM medical coding is designed to communicate information about the medical diagnosis and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes. RCM Medical coding happens every time you see a healthcare provider. The healthcare provider reviews your complaint and medical history, makes an expert assessment of what’s wrong and how to treat you, and documents your visit. That documentation is not only the patient’s ongoing record, it’s how the healthcare provider gets paid.

Code Sets

All the sets of codes used to encode the element of data such as table of terms, medical diagnosis codes, medical concepts and medical procedures, are known as sets.

Using sets facilitates the translation of patient information into universal language which can be understood by medical professionals and insurance companies.

The Purpose of RCM Medical Coding

Being a critical component of healthcare revenue cycle management, medical coding operates as per the norms adopted under HIPAA for diagnosis, procedures, and medication. Healthcare providers heavily rely on accurate medical coding to ensure they are paid for their services. Insurance companies use medical codes to process claims and determine reimbursement costs. Each medical claim is assigned appropriate diagnosis, procedures, and service codes.

Read more on Why Coding is the Most Vital Cog in the Medical Billing Cycle.

ICD-10-CM:

The International Classification of Diseases, 10th Edition, Clinical Modification or ICD-10-CM enhances the accuracy of payment for services and makes the evaluation of medical processes and outcomes easier.

Denoted using three- to seven-digit alphanumeric codes to indicate signs, symptoms, diseases, conditions, and injuries to payers injuries, diseases, and conditions, ICD-10-CM codes are used in conjunction with CPT procedural codes to record services rendered by a provider to a patient, are documented in the medical record and then reported to a payer for reimbursement.

The usage of the new classification system provides major improvements through greater detailed information and the ability to expand to capture additional advancements in clinical medicine.

ICD-10-CM codes are maintained and updated by the Centers for Medicare & Medical Services every year.

CPT

The Current Procedural Terminology or CPT set maintained by the American Medical Association describes the medical, surgical, and diagnostic services among doctors, coders, patients, and payers for administrative, financial, and analytical purposes. Designed to communicate all sorts of medical procedures, CPT codes are further classified into three categories –

Category I CPT Code(s)

Category II CPT Code(s) – Performance Measurement

Category III CPT Code(s) – Emerging Technology

The copyrights to Current Procedural Terminology or CPT codes are owned by the American Medical Association. The CMS and AMA work closely to determine the changes in codes and identify the codes that are incidental to others.

HCPCS

Healthcare insurers in the United States are known to process over 5 billion claims for payment every year. HCPS or Healthcare Common Procedure Coding System is another standard system used to process these claims in an orderly and consistent manner. HCPS is further divided into two principal subsystems – level I and level II of the HCPCS.

Level I – Comprising a numeric coding system called CPT or Current Procedural Terminology, level I uniform coding systems are identified using 5 numeric digits. CPT codes consist of descriptive terms and identifying codes primarily used to identify medical services and procedures offered by physicians and other healthcare professionals. Most outpatient services are reported using the CPT. The Medical code.

What are Medical Codes?

Medical codes are regulated, republished, and updated by the American Medical Association annually.

Level II – Used to identify products, supplies, and services such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician’s office, level II covers the services that are not included in the CPT codes. Level II HCPCS medical codes consist of a single alphabetical letter followed by 4 numeric digits because of which they are also referred to as alpha-numeric codes.

The Healthcare Common Procedure Coding System (HCPCS) is produced and updated annually by the Centers for Medicare and Medicaid Services (CMS).

Staying up-to-date

Each set of medical codes is developed, maintained, and regulated by different healthcare regulators every year. The medical codes are said to be the building blocks of the healthcare industry which makes it crucial for medical coders and billers to source the latest updated versions of the medical code sets from official sources to stay ahead of any changes in codes or else the risk of denied claims and potential compliance issues will be high.

Understanding Compliance in Medical Billing and Coding

Ethics in healthcare reimbursement are not only confined to accurate coding. Ethics involve being compliant with laws and regulations provided by the governing healthcare billing, such as HIPAA (Health Insurance Portability and Accountability Act) and the False Claims Act.

Compliance in medical billing and coding ensures that all the patient information is protected, the billing is fair, and the prevention of fraudulent activities.

By upholding ethical standards, healthcare providers exhibit a commitment to fairness, transparency, and legal compliance.

In addition to legal compliance, ethical considerations in healthcare reimbursement involves the judicious use of resources. Ethical coding promotes error-free reflection of care provided making sure that healthcare resources are efficiently and appropriately utilized. Ethical billing practices discourage unnecessary tests, procedures, or services that aim at increasing financial gains.

Keeping confidentiality is another important aspect of ethical medical billing and coding. Patient privacy must be given utmost priority at all times, and only authorized personnel should have access to sensitive healthcare information. Ethical coding practices emphasize the importance of protecting patient confidentiality and maintaining the trust patients place in healthcare professionals.

Healthcare reimbursement systems have been becoming complex by the day which makes it important to stick to ethical medical coding guidelines and best practices.

Why is it important to adhere to coding guidelines

The best practices of rcm medical coding and billing are closely tied to ethics. Adhering to coding guidelines and regulations helps in preventing errors, inaccuracies, and potential abuse or fraud in healthcare billing.

When healthcare providers follow ethical coding guidelines, they facilitate correct reimbursement, avoid billing disputes, and contribute to the financial stability of their medical setup.

One of the major reasons that make ethics important in healthcare billing is to gain and maintain the trust of patients and insurance providers. Besides instilling confidence in the reliability and accuracy of medical coding and billing processes, the patients are reliant on the healthcare professionals to handle the insurance and billing claims with honesty and transparency. In the same way, insurance providers need correctly coded claims to make sure that the reimbursements are processed appropriately.

Documentation

About 84% of patients are confident their medical records are safe from unauthorized viewing. More than 66% of people have concerns when their health information is exchanged electronically.

A record detailing medical treatment, medical tests, or clinical trials, the clinical documentation consists of accurate, timely, and specific diagnoses and medical treatments that are translated into coded data to represent patients’ clinical status.

The documentation or the EHR – Electronic Health Record is considered to be the means of communication between healthcare providers in documenting patients’ health records and making that data easily available and accessible to providers. Electronically documented data helps providers in reducing medical errors while also enhancing the privacy and security of patients’ health information.

The role of documentation

When the patient data is coded accurately, it helps in quality reporting, allowing evidence-based healthcare systems to automate decisions, and have the patient information from all sources, keep up with the physician report cards, data administration, patient identification, understanding the medical condition, the origin of the ailment, and record corrections as well as auditing the record for documentation validity when submitting reimbursement claims. From effectively improving the billing and coding processes, the EHRs provide updated and accurate information about the patient’s health.

Moreover, healthcare research is largely dependent on medical documentation and coding. Documentation provides information about the heath technology, personal behavior, organizational procedures and social factors on the whole. All this information is put together, transcribed as data, and used in clinical documentation. Clinical documentation and coding adhere to strict rules and guidelines that must be followed to ensure a strong and accurate healthcare foundation.

What are Code Modifiers?

What if a procedure does not fit into a specific code? What if it takes more time than normal or if the doctor has to run two lab tests instead of one? Situations like these can be tackled by adding a two-digit modifier to the existing CPT or HCPCS code. By giving additional detailing to the modifiers, the insurer gets detailed information and can help adjust the payment accordingly.

Used for certain diagnostic tests including CT scans, X-rays and lab services, modifiers can be categorized in

The services rendered by healthcare providers

Services provided by technical staff and that makes use of equipment

Modifiers are instrumental in providing particular information about specific medical services, procedures and medical supplies without changing the meaning of the existing medical code.

Using modifiers correctly is critical for accurate coding and at times, some modifiers can affect the reimbursement for the provider. Using incorrect modifiers or omitting them may result in claim denials resulting in rework, delay in payment, and potential loss in reimbursement.

Let us assume a patient goes out of network, the insurance plan may have limits as to what it can pay. Modifiers let the payers and patients identify those limits. For instance, a patient needs to get two surgeries during the same operation. There may be some insurers that agree to pay 100% of their allowed amount for the first procedure and may only allow a part for the second one. The patient and payer will be able to plan accordingly.

Dealing with the Coding Software

To speed up the coding process while ensuring accuracy, healthcare professionals have been opting for coding software. Programs such as Epic, Centricity, AdvancedMD, Flash Code, Eclipse, and others let the coders edit the fields and enter the correct diagnosis and procedural codes. Software programs like these are enabled with look-up tools that help coders find the right code, but it is advisable to use a coding manual to be sure about which code to use.

Working with coding software cuts the slack and lets the billers and coders track claims and view the medical track record to check for accuracy, and avoid errors. A good coding software should meet the requirements of a medical organization and it must be compliant with CMS-1500 forms and all HIPAA regulations. CMS-1500 is a general form that sends claims to Medicare, Medicaid, and various other third-party payers, and HIPAA is a law that created a set of standards for electronic billing and coding in the mid-1990s.

Some coding programs automatically check compatible codes, however, the bonus is always on the coder to be sure and double-check the codes by using coding manuals. Good coding software assists medical practitioners to increase their efficiency and productivity.

Performance

The performance of coding software is largely dependent on the average amount of time it takes to code. Coding software increases productivity resulting in the elimination of tedious tasks within the coding process such as checking for duplicity, code lookup, document sorting, and manual data entry.

Correctness

If the coding output matches official standards and the reporting standards of the payer, resulting in a decrease in audits and claim denials, the accuracy improves. Increasing correctness with coding software makes sure that all the charges to be collected by a healthcare provider are properly documented.

Consistency

Using coding software in healthcare can increase consistency and confidence in the reports it generates. Consistency in clinical and financial data results in deeper analysis which helps in decision-making.

Training & Certification is Medical Coding

Regardless of the size, each medical facility relies on having medical coders to keep their patient records and process the insurance claims for billing. Being a position with a lot of responsibility and the need for accuracy, medical professionals prefer hiring coders who demonstrate proven competence in the field.

While there are several formal medical coding certification organizations, the AAPC, which was formerly known as the American Academy of Professional Coders and the American Health Information Management Association (AHIMA) stand out as the standard. Neither of the two coder certifications requires a formal education.

CPC by AAPC

The Certified Professional Coder (CPC) certification is issued through AAPC. Recommended for those who would like to do medical coding for a physician’s office, passing a CPC certification exam earns you a CPC-A apprentice credential. One needs to have a provisional credential and one year of medical coding experience to be able to have the complete CPC credential. Most physician offices look for this certification while hiring certified medical coders. Medical coders with a certification by AAPC earn up to 20 percent more than non-certified coders.

CCS-P by AHIMA

Focusing on the record and coding management staff working at the hospitals and in-patient settings, the Certified Coding Specialist-Physician-based (CCS-P) certification enables the coders to work in numerous healthcare settings including specialty clinics, hospitals, and physicians’ offices. CCS-P opens a wider range of job opportunities as compared to non-certified coders.

What is Code Auditing?

As per OIG (Office of Inspector General), conducting at least one audit a year is mandatory for compliance. Moreover, the Centers for Medicare & Medicaid Services (CMS) and the OIG encourage healthcare providers to get the coding reviewed by independent auditors. Regular audits ensure that the coding practices being followed meet the standards, are acceptable, and help in identifying the areas with compliance concerns.

Billing fraud and compliance are major issues in the healthcare industry. Medical audits can uncover the common causes of improper billing – no documentation, less documentation, lack of medical aid, and incorrect coding. Whether these errors are caused by fraud or error, healthcare setups can identify the areas that may be causing loss of revenue.

Compliance and billing fraud is a major issue in the healthcare industry today. The most common causes of improper billing include lack of documentation, no documentation at all, lack of medical necessity, under-coding, and incorrect coding. Medical coding audits can uncover improper billing practices, whether caused by error or fraud. Healthcare organizations can make the proper updates to billing protocol and staff training to ensure further billing mistakes and intentional fraud are not committed and ultimately reduce risk.

Regardless of the type or scope, conducting regular coding audits helps in bringing more accuracy and improvement in the RCM medical coding. Besides, an audit provides an excellent opportunity to identify and prevent payment and compliance issues. With the regulators releasing new guidelines continuously, staying up-to-date and compliant can be a challenge. Coding lets the system identify new laws, regulations, rules, and other issues.

Collaboration with Healthcare and Billing Departments

The RCM of any medical facility is made of two integral parts – patient financial services and rcm medical coding. For the people who work in each of these departments, the issues may seem different. Inaccurate coding can make the hospital lose out on thousands of dollars of revenue every year. Working closely and collaborating with the healthcare providers and billing departments are crucial to maximize cash flow and run the RCM effectively.

When the medical record is viewed by the coders, they identify the cause of patient admission, if the diagnosis is being supported well, and whether it is detailed enough to be coded at the maximum level of specificity or not. At a higher level, when the CDI (clinical documentation improvement) specialist reviews the record, they look for the process of the disease, and diagnostic findings, and point at what’s missing in the patient’s chart.

A conflict between these departments can arise with discrepancies between the diagnosis-related group (DRG) principal diagnosis selection and coding rules and guidelines. The Clinical documentation improvement department is often unfamiliar with these guidelines which may create friction. A good way to address this issue can be to collaborate on documentation tip sheets for the physicians, providers, and residents. The common goal for all the departments is to enable coding at its highest level of specificity.

Medical Terminology

The language of healthcare or medical terminology is used to confer the intricacies of a human body in terms of a healthy body in case of disease or injury. While seeking a career with medical responsibilities daily, it is important to know the anatomical features of physiological processes. For this, fluency in the medical language is a must. The more medical terminology one understands, the better they will get at their job.

Consider enrolling in a medical terminology course. There are medical terms that are referred to using multiple terms as well as acronyms and words derived from other languages. It is for this reason that some institutes require prospective coders to train in medical terminology while preparing for a career in medical coding.

For instance, the skin is the largest organ of the human body studied as an anatomical system just like the nervous system, urinary system, or endocrine system. The medical terminology used to denote skin is an integumentary system – derived from a Latin word that means to cover. This is just one of the hundreds of medical words that are not intuitive and can not be recognized without learning medical terminology.

Apart from thousands of anatomical words, diseases, conditions, surgical procedures, and medical care, medical coders are expected to navigate through a myriad of supplies, drugs, and equipment which makes it even more important for them to attain known medical terms.