House bill would stop ICD-10 mandate

Legislation introduced in the U.S. House would prohibit the Dept. of Health and Human Services from mandating that physicians use ICD-10 diagnosis codes beginning Oct. 1, 2014.

The bill, the Cutting Costly Codes Act of 2013, would stop the required transition to new diagnosis code sets by physicians who are billing for medical services, verifying patient eligibility, obtaining pre-authorizations, documenting patient visits, and conducting both public health reporting and quality reporting. The mandated switch to the 68,000-code system had been established in a 2009 regulation. HHS announced in 2012 that its implementation deadline had been delayed by one year to 2014.

The American Medical Association wrote an April 26 letter to Rep. Ted Poe (R, Texas) in support of his legislation. Physician practices must bear the cost of training, software upgrades and testing of the new system. The projected cost of ICD-10 implementation ranges from $83,290 to more than $2.7 million per practice, the AMA letter stated.

“The timing of the ICD-10 transition could not be worse, as many physicians are currently spending significant time and resources implementing electronic health records into their practices,” the AMA said. “Physicians are also facing present and future financial burdens in the form of penalties if they do not successfully participate in multiple Medicare programs already under way, including e-prescribing, EHR meaningful use, the physician quality reporting system and value-based modifier programs.”

The House legislation also would authorize the Government Accountability Office to study ICD-10 and recommend ways to mitigate upgrade disruptions within the health care system.

 

This article courtesy of: http://www.amednews.com/article/20130513/government/130519980/10/?utm_source=rss&utm_medium=&utm_campaign=20130708

 

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AMA meeting: Insurer report card points to patient collection hassles

A change to the American Medical Association's annual National Insurer Report Card reflects a growing burden physicians face when it comes to getting paid — collecting the patient portion.

Since its launch in 2008, the AMA's annual report card has revealed the physicians' burdens when it comes to getting paid by insurers. In the 2013 report, released during the AMA Annual Meeting in June, analysts calculated the percentage of the medical bill for which patients are responsible for paying through co-payments, deductibles and coinsurance and found that it accounts for nearly one-quarter of medical bills overall. Humana had the lowest patient responsibility at 15%, and Health Care Service Corp. had the highest at 29.2%.

The report was based on claims data from services submitted in February and March from Aetna, Anthem Blue Cross Blue Shield, Cigna, HCSC, Humana, Regence, UnitedHealthcare and Medicare.

“For physicians used to getting payments exclusively from insurers, increased patient cost responsibility poses new challenges,” said Mark Rieger, vice president of payment and reimbursement strategy for National Healthcare Exchange Services, a compliance and denial management solutions provider in Sacramento, Calif., that supplied most of the data used in the analysis.

“Physicians are basically not very good at collecting the patient responsibility. And this is a problem, overall, because as the burden shifts more to patients, more of your revenue is at risk,” Rieger said.

Because this was the first year the report looked at the patient portion, it did not provide historical context for the rise in patient responsibility. But a November 2012 Kaiser Family Foundation report showed that the percentage of workers covered by a plan that includes a deductible rose from 52% in 2006 to 72% in 2012. Those who were in such a plan saw deductibles rise from an estimated average of $584 to $1,097 during the same period.

The problem for physicians, says the AMA, is that they don't always know what the patient portion is at the time of care, making it difficult to collect during the visit. That's when patients are most likely to pay, and it also saves the physicians the cost of chasing down bills.

“Physicians want to provide patients with their individual out-of-pocket costs but must work through a maze of complex insurer rules to find useful information,” said AMA Board of Trustees Member Barbara L. McAneny, MD. “The AMA is calling on insurers to provide physicians with better tools that can automatically determine a patient's payment responsibility prior to treatment.”

The patient portion piece was just one of the many areas of claims adjudication that could benefit from streamlining technology, the report card found. The electronic submission of claims, for example, could reduce the amount of time for claims to be received by insurers.

Health plans said it also falls to doctors to ensure that their systems are ready for faster claims adjudication.

“Health plans and providers share the responsibility of improving the accuracy and efficiency of claims payment. Health plans are doing their part to streamline health care administration to reduce paperwork, improve efficiency and bring down costs,” said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the trade group representing health plans. “At the same time, more work needs to be done to increase electronic submission of claims and to reduce the number of claims submitted to health plans that are duplicative, inaccurate or delayed.”

DID YOU KNOW:
72% of workers with health insurance in 2012 had a plan that included a deductible, up from 52% in 2006.

For example, Zirkelbach pointed to a February AHIP survey that found 16% of electronic claims and 54% of paper claims were received from a physician or hospital more than 30 days after the service date.

Administrative burdens quantified

Along with the annual report card, the AMA also launched its Administrative Burden Index. It examined the claims that required reworking and calculated a monetary amount of each reworked claim, per each evaluated health plan. A five-star rating system also was designed to highlight areas that need focus.

The index found that HCSC had the highest cost associated with the reworking of claims at $3.32 per claim. Cigna had the lowest at $1.25 per claim.

A typical physician practice will lose $14,600 each year on claims reworked to address insurer denials, said Frank Cohen, senior analyst for Frank Cohen Group, a data analytics firm in Clearwater, Fla., that helped create the report card and the burdens index.

In an emailed statement to American Medical News, HCSC spokesman Greg Thompson said his company, which runs nonprofit BlueCross BlueShield plans in Illinois, New Mexico, Oklahoma and Texas, conducts quality reviews and audits regularly to evaluate and monitor performance. It also is investing in technology and encouraging doctors to file more claims electronically.

“According to our record, we process claims accurately more than 99% of the time,” Thompson said. He said that although the company is proud of the work it has done evaluating and improving claims process efficiencies, “we welcome the AMA and others to reduce the administrative burdens and improve efficiencies in our health care system.”

Thompson said the company was reviewing the report card and the index, and did not have reaction to specific findings.

This article courtesy of: http://www.amednews.com/article/20130701/house/130709968/4/?utm_source=rss&utm_medium=&utm_campaign=20130708

 

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ICD-10 FAQ's and Medi-Cal (California Medi-Caid)

ICD-10: FAQs

1. What does International Classification of Diseases, 10th Revision (ICD-10) compliance mean?
   ICD-10 compliance means that all HIPAA-covered entities are able to successfully conduct health care transactions on or after October 1, 2014, using the ICD-10 diagnosis and procedure codes. ICD-9 diagnosis and procedure codes can no longer be used for health care services provided on or after this date.
2. Why is the ICD-10 transition necessary?
   ICD-10 is a provision of HIPAA, as regulated by the U.S. Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS). This federal mandate pertains to all HIPAA-covered entities.

   The transition from ICD-9 to ICD-10 is occurring for the following reasons:

   • ICD-9 codes have limited data about patient’s medical conditions and hospital inpatient procedures.
   • ICD-9 codes use outdated and obsolete terms and are not consistent with current medical practices.

   The structure of ICD-9 limits the number of new codes that can be created, and many ICD-9 categories are full. A successful transition to ICD-10 is vital to transforming our nation’s health care system.
3. Codes change every year, so why is the transition to ICD-10 any different from the annual code changes?
   ICD-10 codes are different from ICD-9 codes in several ways. Currently, ICD-9 codes are for the most part numeric and have three to five digits. ICD-10 codes are alphanumeric and contain three to seven characters. ICD-10 codes provide a higher level of description. However, like ICD-9 codes, ICD-10 codes will be updated every year.
4. Will ICD-10 replace Current Procedural Terminology (CPT) procedure coding?
   No. The transition to ICD-10 does not affect CPT coding for outpatient procedures. Like ICD-9 procedure codes, ICD-10 Procedure Coding System (PCS) codes are for hospital inpatient procedures only.
5. What is the implementation date for ICD-10?
   On October 1, 2014, medical coding in U.S. health care settings will change from ICD-9 code sets to ICD-10 code sets.
6. After the October 1, 2014, implementation date, when do I use ICD-9 versus ICD-10 on my claim?
   Please refer to the chart below, using the date specified in the date field, to determine the ICD code version to use.  If the value of the date field is before October 1, 2014, use ICD-9 to code the diagnosis. If the value of the date field is on or after October 1, 2014, use ICD-10.

   Claim Type	Claims	Date Field To Be Used For Determining ICD Code Version
   1	Pharmacy	Date of service
   2	Long Term Care (LTC)	Through date
   3	Inpatient	Through date
   4	Outpatient	From date
   5	Medical	From date

   In addition, all claims received on or after the ICD-10 compliance date will require a version indicator (ICD-9 = 9 or ICD-10 = 0).
7. Will there be a grace period for converting to ICD-10?
   No.
8. How is Medi-Cal addressing the implementation of ICD-10?
   Medi-Cal will be using a crosswalk solution in the legacy California Medicaid Management Information System (CA-MMIS). Medi-Cal has mapped all ICD-10 codes to corresponding ICD-9 codes by starting with the General Equivalence Mappings (GEMs) provided by the Centers for Medicare & Medicaid Services (CMS) and modifying the mappings to align with existing Medi-Cal policy. Claims will be run against the crosswalk to determine the ICD-9 value to process through the system.
9. What is a crosswalk solution?
   Medi-Cal has mapped all ICD-10 codes to corresponding ICD-9 codes starting with the General Equivalence Mappings (GEMs) and Reimbursement Mappings provided by the Centers for Medicare & Medicaid Services (CMS) and modifying the mappings to align with existing Medi-Cal policy. Claims that are submitted with ICD-10 starting October 1, 2014, will be run against this crosswalk to identify the appropriate ICD-9 code that will be used to process the claim.
10. Will an ICD-10 to ICD-9 crosswalk be published?
    Medi-Cal will not publish the crosswalk. However, the provider manuals will be updated with the ICD-10 codes as appropriate.
11. Who is affected by the transition to ICD-10? If I don’t deal with Medicare claims, will I have to transition?
    Everyone covered by HIPAA must transition to ICD-10. This includes providers and payers who do not deal with Medicare or Medicaid claims.
12. What if I don’t make the transition to ICD-10?
    For HIPAA-covered entities, transition to ICD-10 is not an option. Claims for all services and hospital inpatient procedures performed on or after the compliance deadline must use ICD-10 diagnosis and inpatient procedure codes. This change does not apply to Current Procedural Terminology (CPT) coding for outpatient procedures. Without ICD-10, providers will experience delayed payments or even non-payments; increased rejected, denied or pending claims; reduced cash flows and ultimately lost revenues.

    It is important to note, however, that claims for services and inpatient procedures provided before the compliance date must use ICD-9 codes.
13. Is Medi-Cal policy going to change with ICD-10?
    Medi-Cal will be updating the provider manuals to account for the change to ICD-10 in 2014. However, due to the size of the ICD-10 code set and limitations in the legacy MMIS policy will not change.
14. Will Medi-Cal accept claims with both ICD-10 and ICD-9 codes on the same claim form?
    No. Medi-Cal will accept claim forms containing only ICD-9 or ICD-10 codes.
15. If I transition early to ICD-10, will Medi-Cal be able to process my claims?
    The U.S Department of Health and Human Services (HHS) has mandated that all HIPAA-covered entities will transition to the use of ICD-10 on October 1, 2014, and early or late transitions will not be allowed. Medi-Cal will not be able to process claims using ICD-10 until October 1, 2014.
16. Are paper claims affected by the transition to ICD-10?
    Yes. All claim transactions, whether paper or electronic, except dental claims, will be required to be submitted using ICD-10 codes. 
17. What type of training will providers and staff need for the ICD-10 transition?
    Medi-Cal will be providing education about the use of ICD-10 for submitting claims to Medi-Cal. Providers are encouraged to visit the Medi-Cal website regularly throughout the course of the transition to access the latest information about education opportunities.

    In addition, ICD-10 resources and training materials may be available through the Centers for Medicare & Medicaid Services (CMS), many professional associations and societies, and software/system vendors.
18. Where can I get additional information about ICD-10?
    More information about ICD-10 is available on the ICD-10 page of the CMS website.

    
    

    Providers may also submit ICD-10-related questions to the ICD-10 mailbox at ICD-10Medi-Cal@xerox.com.

    This article courtesy of: Medi-Cal http://files.medi-cal.ca.gov/pubsdoco/hipaa/hipaa_icd10_faqs.asp

 

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What is a CPT code?

What is CPT?
Current Procedural Terminology (CPT®), Fourth Edition, is a listing of descriptive terms and identifying codes for reporting medical services and procedures. The purpose of CPT is to provide a uniform language that accurately describes medical, surgical, and diagnostic services, and thereby serves as an effective means for reliable nationwide communication among physicians and other healthcare providers, patients, and third parties.

How is CPT used?
CPT descriptive terms and identifying codes currently serve a wide variety of important functions. This system of terminology is the most widely accepted medical nomenclature used to report medical procedures and services under public and private health insurance programs. CPT is also used for administrative management purposes such as claims processing and developing guidelines for medical care review.
The uniform language is also applicable to medical education and research by providing a useful basis for local, regional, and national utilization comparisons.

How was CPT developed?
The American Medical Association (AMA) first developed and published CPT in 1966. The first edition helped encourage the use of standard terms and descriptors to document procedures in the medical record; helped communicate accurate information on procedures and services to agencies concerned with insurance claims; provided the basis for a computer oriented system to evaluate operative procedures; and contributed basic information for actuarial and statistical purposes.
The first edition of CPT contained primarily surgical procedures, with limited sections on medicine, radiology, and laboratory procedures. The second edition was published in 1970 and presented an expanded system of terms and codes to designate diagnostic and therapeutic procedures in surgery, medicine, and the specialties. At that time, a five-digit coding system was introduced, replacing the former four-digit classification. Another significant change was a listing of procedures relating to internal medicine.
In the mid to late 1970s, the third and fourth editions of CPT were introduced. The fourth edition, published in 1977, represented significant updates in medical technology, and a system of periodic updating was introduced to keep pace with the rapidly changing medical environment. In 1983 CPT was adopted as part of the Centers for Medicare and Medicaid Services (CMS), formerly Health Care Financing Administration's (HCFA), Healthcare Common Procedure Coding System (HCPCS). With this adoption, CMS mandated the use of HCPCS to report services for Part B of the Medicare Program. In October 1986, CMS also required state Medicaid agencies to use HCPCS in the Medicaid Management Information System. In July 1987, as part of the Omnibus Budget Reconciliation Act, CMS mandated the use of CPT for reporting outpatient hospital surgical procedures.
Today, in addition to use in federal programs (Medicare and Medicaid), CPT is used extensively throughout the United States as the preferred system of coding and describing health care services.

HIPAA and CPT
The Administrative Simplification Section of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 requires the Department of Health and Human Services to name national standards for electronic transaction of health care information. This includes transactions and code sets, national provider identifier, national employer identifier, security and privacy. The Final Rule for transactions and code sets was issued on August 17, 2000. The rule names CPT (including codes and modifiers) and HCPCS as the procedure code set for:

• Physician services.
• Physical and occupational therapy services.
• Radiological procedures.
• Clinical laboratory tests.
• Other medical diagnostic procedures.
• Hearing and vision services.
• Transportation services including ambulance.

The Final Rule also named ICD-9-CM volumes 1 and 2 as the code set for diagnosis codes, ICD-9-CM volume 3 for inpatient hospital services, CDT for dental services, and NDC codes for drugs.
All health care plans and providers who transmit information electronically were required to use established national standards by the end of the implementation period, October 16, 2003. In addition, all local codes were eliminated and national standard code sets were required for use after October 16, 2003.

Who Maintains CPT?
The CPT Editorial Panel is responsible for maintaining the CPT code set. This panel is authorized by the AMA Board of Trustees to revise, update, or modify CPT codes, descriptors, rules and guidelines. The Panel is comprised of 17 members. Of these, 11 are physicians nominated by the National Medical Specialty Societies and approved by the AMA Board of Trustees. One of the 11 is reserved for expertise in performance measurement. One physician is nominated from each of the following: the Blue Cross and Blue Shield Association, America's Health Insurance Plans, the American Hospital Association, and the Centers for Medicare and Medicaid Services (CMS). The remaining two seats on the CPT Editorial Panel are reserved for members of the CPT Health Care Professionals Advisory Committee.
Five members of the Editorial Panel serve as the panel's Executive Committee. The Executive Committee includes the Editorial Panel chairman, co-chairman and three panel members-at-large, as elected by the entire panel. One of the three members-at-large of the executive committee must be a third-party payer representative.
Supporting the CPT Editorial Panel in its work is a larger body of CPT advisors, the CPT Advisory Committee. The members of this committee are primarily physicians nominated by the national medical specialty societies represented in the AMA House of Delegates. Currently, the Advisory Committee is limited to national medical specialty societies seated in the AMA House of Delegates and to the AMA Health Care Professionals Advisory Committee (HCPAC), organizations representing limited-license practitioners and other allied health professionals. Additionally, a group of individuals, the Performance Measures Advisory Group (PMAG), who represent various organizations concerned with performance measures, also provides expertise.
The Advisory Committees' primary objectives are to:

• serve as a resource to the CPT Editorial Panel by giving advice on procedure coding and appropriate nomenclature as relevant to the member's specialty;
• provide documentation to staff and the CPT Editorial Panel regarding the medical appropriateness of various medical and surgical procedures under consideration for inclusion in CPT;
• suggest revisions to CPT. The Advisory Committee meets annually at the CPT Fall meeting to discuss items of mutual concern and to keep abreast of current issues in coding and nomenclature;
• assist in the review and further development of relevant coding issues and in the preparation of technical education material and articles pertaining to CPT; and
• promote and educate its membership on the use and benefits of CPT.

How are requests for changes to CPT reviewed?
Specific procedures exist for addressing requests to revise CPT, such as adding or deleting a code, or modifying existing nomenclature.
Medical specialty societies, individual physicians, hospitals, third-party payers and other interested parties may submit applications for changes to CPT for consideration by the Editorial Panel. The AMA’s CPT staff reviews all requests to revise CPT including applications for new and revised codes. If AMA staff determines that the Panel has already addressed the question, staff informs the requestor of the Panel's coding recommendation. However, if staff determines that the request presents a new issue or significant new information on an item that the Panel reviewed previously, the application is referred to members of the CPT Advisory Committee for evaluation and commentary. Applications that have not received any CPT Advisor support will be presented to the CPT Editorial Panel for discussion and possible decision unless withdrawn by the applicant. Applicants will be notified if their applications have received no CPT Advisor support approximately 14 days prior to each meeting of the CPT Editorial Panel meeting. Applicants have the ability to withdraw their applications up until the agenda item is called at the meeting—thereafter the CPT Editorial Panel has jurisdiction over the agenda item.
The CPT Editorial Panel meets three times each year. AMA staff prepares agenda materials for each CPT Editorial Panel meeting. Panel members receive agenda material at least 30 days in advance of each meeting, allowing them time to review the material, review CPT Advisor comments and confer with experts on each subject, as appropriate. The Panel addresses nearly 350 major topics a year, which typically involve more than 3,000 votes on individual items.
A multi-step process naturally means that deadlines are very important. The deadlines for submitting code change applications and for compilation of CPT Advisors’ comments are based on a schedule which allows at least three months of preparation and processing time before the issue is ready for review by the CPT Editorial Panel. The initial step, which includes AMA staff and CPT Advisor review, is completed when all appropriate CPT Advisors have been contacted and have responded, and all information requested of an applicant has been provided to AMA staff.
Following review and compilation of CPT Advisors’ comments, AMA staff prepares an agenda item that includes the application, compiled CPT Advisor comments and a ballot for decision by the CPT Editorial Panel. Once the Panel has taken an action and preliminarily approved the minutes of the meeting, AMA staff informs the applicant of the outcome.
The Panel actions on an agenda item can result in one of four outcomes:

• addition of a new code or revision of existing nomenclature, in which case the change would appear in a forthcoming volume of CPT;
• referral to a workgroup for further study;
• postponement to a future meeting (to allow submittal of additional information in a new application); or
• rejection of the item.

Applicants or other interested parties who wish to seek reconsideration of the Panel's decision should refer to the process described on the AMA/CPT website.

Category I CPT codes
Category I CPT codes consist of a five-digit CPT code and descriptor nomenclature which describes in detail the medical procedure or service. New or revised codes (including a previously assigned Category III code[s]) are assigned Category I status if the CPT Editorial Panel determines, based on the evidence submitted:

• that the service/procedure has received approval from the Food and Drug Administration (FDA) for the specific use of devices or drugs;
• that the suggested procedure/service is a distinct service performed by many physicians/practitioners across the United States;
• that the clinical efficacy of the service/procedure is well established and documented in U.S. peer review literature;
• that the suggested service/procedure is neither a fragmentation of an existing procedure/service nor currently reportable by one or more existing codes; and
• that the suggested service/procedure is not requested as a means to report extraordinary circumstances related to the performance of a procedure/service already having a specific CPT code.

Category II CPT codes- Performance Measurement
CPT Category II codes are supplemental tracking codes that can be used for performance measurement. The use of the tracking codes for performance measurement will decrease the need for record abstraction and chart review, and thereby minimize administrative burdens on physicians and other health care professionals. These codes are intended to facilitate data collection about quality of care by coding certain services and/or test results that support performance measures and that have been agreed upon as contributing to good patient care. Some codes in this category may relate to compliance by the health care professional with state or federal law.
The use of these codes is optional. The codes are not required for correct coding and may not be used as a substitute for Category I codes.
Services/procedures or test results described in this category make use of alpha characters as the 5th character in the string (i.e., 4 digits followed by an alpha character). These digits are not intended to reflect the placement of the code in the regular (Category I) part of the CPT code set. Also, these codes describe components that are typically included in an evaluation and management service or test results that are part of the laboratory test/procedure. Consequently, they do not have a relative value associated with them.
Tracking codes for performance measurement are released three times yearly following approval of the Panel minutes after each Editorial Panel meeting (March 15th, July 15th, and November 15th) on the AMA CPT Category II website, and published annually in the CPT book as part of the general CPT code set.
Tracking codes are reviewed by the Performance Measures Advisory Group (PMAG), an advisory body to the CPT Editorial Panel and the CPT Health Care Professionals Advisory Committee (CPT/HCPAC). The PMAG is comprised of performance measurement experts representing the Agency of Healthcare Research and Quality (AHRQ), the American Medical Association (AMA), the Centers for Medicare and Medicaid Services (CMS), the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the National Committee for Quality Assurance (NCQA), and the Physician Consortium for Performance Improvement. The PMAG may seek additional expertise and/or input from other national health care organizations as necessary for the development of tracking codes. These may include national medical specialty societies, other national health care professional associations, accrediting bodies, and federal regulatory agencies. PMAG recommendations are then forwarded to the CPT/HCPAC Advisory Committee just as requests for Category I CPT codes are reviewed. The PMAG is interested in:

• measurements that have been developed and tested by a national organization;
• evidence-based measurements with established ties to health outcomes;
• measurements that address clinical conditions of high prevalence, high risk or high cost; and
• well-established measurements that are currently used by large segments of the health care industry

Category III CPT codes- Emerging Technology
Category III CPT codes are a temporary set of tracking codes for new and emerging technologies. These codes are intended to facilitate data collection on and assessment of new services and procedures. The Category III codes are intended for data collection purposes in the FDA approval process or to substantiate widespread usage. As such, the Category III codes may not conform to the usual CPT code requirements for Category I. The Panel has established the following criteria for evaluating Category III code requests, any one of which is sufficient for consideration by the Editorial Panel:

1. a protocol for a study of procedures being performed;
2. support from the specialties who would use the procedure;
3. availability of U.S. peer-reviewed literature;
4. descriptions of current United States trials outlining the efficacy of the procedure.

In general, these codes will be assigned a numeric-alpha identifier (eg, 1234T). These codes will be located in a separate section of CPT, following the "Category II" section. Introductory language in this code section explains the purpose of the Category III codes.
Since Category III CPT codes are intended to be used for data collection purposes to substantiate widespread usage or in the FDA approval process, they are not intended for services/procedures that are not accepted by the Editorial Panel because the proposal was incomplete, more information was needed, or the Advisory Committee did not support the proposal.
Once approved by the Editorial Panel, the newly added Category III CPT codes are released biannually (January 1 and July 1) on the AMA CPT Category III website (http://www.ama-assn.org/go/cpt-cat3) and published annually in the CPT book as part of the general CPT code set. Codes released on January 1st are effective July 1st, allowing 6 months for implementation, and codes released on July 1st are effective January 1st.
Category III CPT codes are not referred to the AMA/Specialty RVS Update Committee (RUC) for valuation because no relative value units (RVUs) will be assigned. Payment for these services/procedures is based on the policies of payers and local Medicare Carriers. However, the assignment of a CPT Category III code to a service does not indicate that it is experimental or of limited utility, but only that the service or technology is new and is being tracked for data collection. In the Final Rule for the 2002 Medicare Physician Fee Schedule (Federal Register, Thursday, November 1, 2001), the Center for Medicare and Medicaid Services (CMS) stated that they believed that Category III codes will serve a useful purpose and that payment for the service is at the discretion of the Carriers, but that the codes could be paid after entered into the computer systems. Local payment determination is reasonable for Category III CPT codes. It is not reasonable to categorically deny payment for CPT Category III codes since they are effectively more specific, more functional versions of unlisted codes which many payers cover with appropriate documentation. Once payment policies are established of a Category III Code, the need for documentation will be minimized since Category III Codes are associated with unique and specific descriptions of the service or procedure. Since Category III codes are part of the CPT code set, all health care payers must be able to accept Category III codes into their systems to comply with the standards for transactions and code sets under HIPAA.
In general, these codes will be archived 5 years from the date of implementation if the code has not been accepted for placement in the Category I section of CPT, unless it is demonstrated that a Category III code is still needed. These codes will not be reused.

When are CPT codes implimented?
As the designated standard for the electronic reporting of physician and other health care professional services under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), CPT codes are updated annually and effective for use on January 1 of each year. The AMA prepares each annual update so that the new CPT books are available in the fall of each year preceding their effective date to allow for implementation.
Category I vaccine product codes, Molecular Pathology and Category III codes are typically "early released" for reporting either January 1st or July 1st of a given CPT cycle. In order to comply with HIPAA requirements, the effective dates for these codes have been altered to become effective six months subsequent to the date of release following code set updates. As a result, codes released on January 1st are effective July 1st, allowing 6 months for implementation, and codes released on July 1st are effective January 1st.
Category II codes are typically "early released" for reporting three times yearly (March 15th, July 15th, and November 15th) following approval of the Panel minutes after each Editorial Panel meeting. The effective dates for these codes have also been altered to become effective three months subsequent to the date of release following code set updates. For example, codes released on July 15th are effective October 15th, allowing 3 months for implementation.

This article courtesty of: American Medical Assn. http://www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/cpt/cpt-process-faq/code-becomes-cpt.page

READ MORE - What is a CPT code?

What is a Modifer?

A modifier is a two-digit numeric or alpha numeric character reported with a CPT/HCPCS code,

when appropriate. Modifiers are designed to give Medicare and commercial payers additional
information needed to process a claim.
A modifier provides the means by which a physician can report or indicate that a service or
procedure that has been performed has been altered by some special circumstances(s), but has
not changed in its definition or code. Modifiers also enable health care professionals to effectively
respond to payment policy requirements established by other entities. These codes should be
entered in item 24D on the Form CMS-1500 or electronic equivalent.

Some examples of when a modifier may be appropriate include:
A service or procedure has both a professional and technical component, but both
components are not applicable

A service or procedure was performed by more than one physician and/or in more than

one location

A service or procedure has been increased or decreased in complexity or performance

 

An adjunctive service was performed

 

A bilateral procedure was performed

Unusual events occurred during a procedure or service

Placement of a modifier after a CPT or HCPCS code does not insure reimbursement. A special

report may be necessary if the service is rarely provided, unusual, variable or new. The special
report should contain pertinent information and adequate definition of the procedure or service
performed that supports the use of the assigned modifier. If the service is not documented, or the
special circumstance is not indicated, it is not considered appropriate to report the modifier. A
report should not be submitted unless requested.

Some modifiers are informational only (e.g., -24 and -25) and do not affect reimbursement. They

can however, determine if the service will be covered or denied.
Other modifiers such as modifier -22 (increased procedural services) will increase the
reimbursement and protocol for many third-party payers if documentation supports the use of
this modifier. Modifier -52 (reduced services) will usually equate to a reduction in payment.

There will be times when the coding and modifier information issued by CMS differs from the
AMA’s coding advice in the CPT manual regarding the use of modifiers. A clear understanding
of Medicare’s rules is necessary in order to assign the modifier correctly. It is the responsibility of
each provider or practitioner submitting claims to keep abreast of the Medicare program
requirements.

The use of modifiers is an important part of coding and billing for health care services. Modifier

use has increased as various commercial payers, who in the past did not incorporate modifiers
into their reimbursement protocol, recognize and accept CPT/ HCPCS codes appended with
these specialized billing flags.

Correct modifier use is also an important part of avoiding fraud and abuse or noncompliance

issues, especially in coding and billing processes involving the federal and state governments.
Several of the top billing errors involve the incorrect use of modifiers.

This article courtesy of: http://www.medicarenhic.com/providers/pubs/ModifierBillingGuide0611.pdf
 

READ MORE - What is a Modifer?

Self Employed Individuals & Independent Contractors

Self-Employed Individuals

As an individual conducting your own business, you may want some guidance along the way. For example, what taxes do you need to pay? To make sure you have the basics covered, here's a list of helpful resources.

Starting a Business

Follow these Steps to Starting a Business

Financing a Business

Federal and state government agencies do not provide grants to self-employed individuals for starting a business. However, there are a number of low-interest loan programs that help individuals obtain startup financing. Visit the this Loans and Grants Search Tool to get a full list of grant, loan and venture capital programs for which you might qualify.

Tax Information for the Self-Employed

Employer Identification Number

• Understand the Employer Identification Number (EIN), also known as a federal tax identification number, that is used to identify a business entity.

Small Business and Self-Employed One-Stop Resource

• Get a broad range of state and local tax information, including resources for specific industries, professions, self-employed entrepreneurs, employers and small businesses.

Online Classroom

• Participate in a series of self-directed workshops on a variety of topics for small business owners, hosted by the Small Business/Self-Employed online classroom.

Self-Employment Tax

• View information on the Self-Employment Tax, a Social Security and Medicare tax for individuals who work for themselves.

Sole Proprietorships

• Obtain a listing of tax forms that a sole proprietor needs to file, along with additional resources.

Visit this State and Local Tax page to learn more about your state’s taxes required for self-employed individuals.

Social Security

Social Security Information for the Self-Employed

• Learn how to report your earnings.

Work Activity Report - Form SSA-820-F4

• Access the Social Security benefit claim form for self-employed individuals.

How to Become an Independent Contractor

Commonly known as consultants, freelancers and self-employed, independent contractors are individuals who are hired to do a particular job, receiving payment only for the work being done. Independent contractors are business owners, and are not their clients' employees. They do not receive employee benefits or the same legal protections as employees, and are often responsible for their own expenses. If you think you want to be an independent contractor, explore the resources below.

Start Your Business

Like all other small business owners, you will need to follow some essential steps to starting your business. This includes getting the proper tax registrations, business and occupational licenses and permits from federal, state and local governments in order to operate legally.

As an independent contractor, you will also want to create a standard agreement for your services. You can find a number of other sample agreements on the Internet, but it is best to consult an attorney to draft one specifically for your business, since your agreement will be a legal document between you and your client.

Find Business Opportunities

Large and small businesses, organizations and government agencies hire independent contractors for a wide variety of jobs, from professionals such as medical billing specialists accountants and engineers to trades like construction and trucking.

Operate Your Business

As an independent contractor you are responsible for paying your own taxes, Social Security, unemployment taxes, workers' compensation, health insurance, and other benefits. In addition, you and your client should understand the differences between an independent contractor and an employee, as well as your legal rights and responsibilities.

Pay Your Taxes

Independent contractors must pay federal taxes on income and FICA; however, your client will not withhold taxes for you. As a business owner you will need to pay estimated taxes throughout the year instead of once a year on April 15.

The following IRS resources will help you understand how to pay federal taxes as an independent contractor:

Self-Employed Individual Tax Center

Get all the information you need on federal tax at this one-stop resource for independent contractors.

Federal Tax Forms for Sole Proprietors

Obtain a list of IRS forms frequently used by independent contractors.
Depending on the location of your business, you may be required to file state and local income and business taxes. Visit this State and Local Tax page for more information.

This article courtesy of: U.S. Small Business Administration
http://www.sba.gov/content/self-employed-independent-contractors

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ICD-10 DEADLINE OCT 1, 2014

The ICD-10 Transition: An Introduction

The ICD-9 code sets used to report medical diagnoses and inpatient procedures will be replaced by ICD-10 code sets. This fact sheet provides background on the ICD-10 transition, general guidance on how to prepare for it, and resources for more information.

About ICD-10

ICD-10-CM/PCS (International Classification of Diseases, 10th Edition, Clinical Modification /Procedure Coding System) consists of two parts:

 

1. ICD-10-CM for diagnosis coding

 

2. ICD-10-PCS for inpatient procedure coding

ICD-10-CM is for use in all U.S. health care settings. Diagnosis coding under ICD-10-CM uses 3 to 7 digits instead of the 3 to 5 digits used with ICD-9-CM, but the format of the code sets is similar.

 

ICD-10-PCS is for use in U.S. inpatient hospital settings only. ICD-10­ PCS uses 7 alphanumeric digits instead of the 3 or 4 numeric digits used under ICD-9-CM procedure coding. Coding under ICD-10-PCS is much more specific and substantially different from ICD-9-CM procedure coding.

 

The transition to ICD-10 is occurring because ICD-9 produces limited data about patients’ medical conditions and hospital inpatient procedures. ICD-9 is 30 years old, has outdated terms, and is inconsistent with current medical practice. Also, the structure of ICD-9 limits the number of new codes that can be created, and many ICD-9 categories are full.

 

Who Needs to Transition

ICD-10 will affect diagnosis and inpatient procedure coding for everyone covered by Health Insurance Portability Accountability Act (HIPAA), not just those who submit Medicare or Medicaid claims. The change to ICD-10 does not affect CPT coding for  outpatient procedures.

 

Health care providers, payers, clearinghouses, and billing services must be prepared to comply with the transition to ICD-10, which means:

• All electronic transactions must use Version 5010 standards, which have been required since January 1, 2012. Unlike the older Version 4010/4010A standards, Version 5010 accommodates ICD-10 codes.
• ICD-10 diagnosis codes must be used for all health care services provided in the U.S., and ICD-10 procedure codes must be used for all hospital inpatient procedures. Claims with ICD-9 codes for services provided on or after the compliance deadline cannot be paid.

 

Transitioning to ICD-10

It is important to prepare now for the ICD-10 transition. The following are steps you can take to get started:

 

• Providers – Develop an implementation strategy that includes an assessment of the impact on your organization, a detailed timeline, and budget. Check with your billing service, clearinghouse, or practice management software vendor about their compliance plans. Providers who handle billing and software development internally should plan for medical records/coding, clinical, IT, and finance staff to coordinate on ICD-10 transition efforts.
• Payers – Review payment policies since the transition to ICD-10 will involve new coding rules. Ask your software vendors about their readiness plans and timelines for product development, testing, availability, and training for ICD-10. You should have an implementation plan and transition budget in place.
• Software vendors, clearinghouses, and third-party billing services – Work with customers to install and test ICD-10 ready products. Take a proactive role in assisting with the transition so your customers can get their claims paid. Products and services will be obsolete if steps are not taken to prepare. 

 http://www.cms.gov/Medicare/Coding/ICD10/index.html

  

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