The impact of accurate coding

Accurate coding is an integral part of efficient claims submission. Incorrect coding can be construed as fraud or abuse. This can have a negative effect on any healthcare organization. If the wrong diagnostic or procedural codes are used, the claim can be denied and will have to be resubmitted. If coding is done incorrectly, the claim can be rejected as not medically necessary. Let’s take a closer look at how to prevent fraud and abuse and the rejection of claims.

Preventing fraud and abuse

In any healthcare environment, accurate coding is essential to prevent fraud and abuse in reimbursement. According to HIPAA, fraud is defined as knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or to obtain by means of false or fraudulent pretenses, representations, or promises any of the money or property owned by any healthcare benefit program. Examples of fraud include billing for services that were not actually performed, altering the patient’s diagnosis to justify tests or surgeries, and coding for a higher level of service than what was performed.

Abuse in medical billing would be actions that are contrary to ethical standards in the medical office. Abuse is an unintended action that directly or indirectly results in an overpayment to the healthcare provider. Abuse is similar to fraud, except that it is unclear if the unethical practice was committed on purpose. Examples of abuse include providing unnecessary clinical services and waiving copayments or coinsurance. The term intentional is important when determining whether fraudulent medical billing practices were done on purpose or were an accident.

Violations of the laws governing reimbursement may have the following results:

• Nonpayment of claims
• Civil monetary penalties (CMPs)
• Exclusion from the payer program
• Criminal and civil liability
• In extreme cases, jail time

These laws may be changed or updated. The person who is responsible for coding must pay close attention to detail and act as a sort of medical detective to prevent a case against a provider or clinic. The ICD-10-CM and CPT/HCPCS manuals are updated annually. New coding manuals have a few pages dedicated to the updates for that particular year. Accurate use of ICD-10-CM and CPT/HCPCS manuals is essential for the correct translation of the claim information in the health record into the correct codes. However, as models of providing healthcare change, they can present some challenges for accurate coding and billing procedures.

Guidelines for reviewing claims before submission

The following guidelines can help ensure that clean insurance claims are submitted.

• Proofread the form or data entered into the electronic system carefully for accuracy and completeness.
• Make certain any necessary attachments are included with the completed form.
• Follow office policies and guidelines for claim review and signatures.
• Forward the original claim to the proper insurance carrier either by mail or electronically.
• Make sure the patient’s and/or insured’s name, address, ID, group, and/or policy number are identical to the information printed on the insurance card.
• Make sure the patient’s birth date and gender are the same as in the medical record.
• Section 2, Patient and Insured Information (Blocks 1–13): Complete these blocks accurately, according to the insurance carrier’s guidelines.
• Block 11: Enter the policy, group or FECA number. If there is no group number, leave it blank.
• Block 12: Make sure the patient has authorized the release of information and that Block 12 has a handwritten signature, the words “Signature on File,” or the acronym SOF.
• Blocks 14–24J (required fields for diagnosis and procedure): Make sure these blocks are completed accurately, according to NUCC or carrier-specific guidelines.
• Make sure the diagnosis is not missing or incomplete.
• Check that the diagnosis has been coded accurately, according to the ICD-10-CM coding manual and is linked to the treatment.
• List the fees for each charge individually; or, if more than 1 day or unit is entered in Block 24G, the fees must be computed correctly.
• Blocks 17 and 17b: If applicable, enter the referring provider’s name and NPI number.
• Block 25: Double-check the provider’s federal Social Security number (SSN) or employer identification number (EIN) to ensure accuracy.
• Block 27 (Accept Assignment?): Put an X in the YES box if the provider is a PAR provider or has an agreement with the insurance company to accept assignment.
• Block 31: Check for the provider’s signature, which must be on the form.
• Block 24J and Block 33a: Make sure the provider’s NPI, corresponding to the insurance carrier being billed, has been entered in Block 24J and again in Block 33a.

Preventing rejection of a claim

It is important for the medical assistant to understand and comply with the specific guidelines for completing a CMS-1500 established by each insurance company. This prevents delays in reimbursement and denial of payment. The guidelines for Medicare, Medicaid, TRICARE, and workers’ compensation can be found online at the websites of these healthcare insurers. Most practice management billing systems have built-in claim scrubbers that help in the process. If claims are sent electronically through a clearinghouse, claims auditing is done before the clearinghouse transmits the claim to the insurance company. Claims without errors of any type are called clean claims. Claims with incorrect, missing, or insufficient data are called dirty claims.

Communication with providers about third-party requirements

It can be challenging for a provider to keep up with the annual changes made by the government plans, private health insurance companies, and the coding updates. This is why healthcare providers trust their medical office staff to stay up to date on the various changes in the health insurance industry.

Some providers may be so focused on patient care that they feel uncomfortable with change. This may be the case with the encounter form/superbill used in patient care. A provider may feel comfortable using the same form, but over time, some codes may have changed or become obsolete, or new medical services offered may not be listed on the form.

A medical coder should tactfully discuss with the provider the benefits of using an updated encounter form. If the provider is still reluctant to change the form, even though it is outdated, the medical coder may suggest that the form will not be changed, just the codes on it. Adjust the encounter form to include an open text box for providers to add medical procedures that they perform occasionally.

When communicating with the provider about coding issues, you must always have a respectful attitude. The many changes occurring in medical coding and billing can be overwhelming and confusing for some providers. The approach of coding professionals should be to guide them patiently through these changes.

Claim follow-up

The majority of claims are paid in a timely fashion without any issues, but some claims need some extra time and effort. Claims can become lost in either the healthcare organization’s system or in the insurance company’s system. Claims tracking is an important task used to follow up on those lost claims. Some claims can be rejected or denied. Why this occurs can be found on the EOB/RA. It is also important to review those documents and follow up on the claims that have been rejected or denied. The next section goes over how to track claims and follow up on rejected or denied claims.

Claims tracking

The medical biller should keep track of every submitted claim to ensure timely reimbursement. Clearinghouses send a confirmation report after submission of a claim. The medical biller should always confirm that the claims submitted to the clearinghouse match the claims listed on the confirmation report. If direct billing is used, the medical biller must set up a system to track the claims that were submitted. Medical assistants should maintain this practice to ensure every claim is submitted correctly.

The claim submission confirmation report also indicates claims that were rejected because they were incomplete. These claims should be corrected and resubmitted electronically immediately. Often these claims are rejected for data entry errors. The medical biller should compare the patient’s information in the practice management software to the information on the patient’s registration form and scanned insurance card to ensure accuracy.

It typically takes 10 to 14 business days for insurance companies to process insurance claims electronically. If the insurance company has not responded after 30 days, the medical biller should inquire about the status of the claim. This can be done through the company’s provider web portal or by calling the provider services number on the back of the patient’s insurance ID card. To verify the claim status, you must provide the following information:

• Insured subscriber’s member number and birth date
• Patient’s name and birth date
• Date of service

With this information, the insurance company should be able to tell if the claim has been paid, is still in process, was denied, or was never received. The medical biller will use this information for the proper follow-up. This could involve a number of actions:

• Investigating the records at the clinic to see if the payment came in but was applied to the incorrect patient account.
• Researching the denial and re-submitting the claim.
• Determining why the claim was not received and resubmitting it.

The state insurance commission has standards that insurance companies must abide by, including claim processing times and payment guidelines. Medical assistants should keep the commission’s contact information in the office medical billing manual as a reference in case a claim should be reported.