Coding Guidelines: HCPSC Overview

Introduction

The purpose of this document is to provide important fundamental information regarding coding guidelines. It will present basic coding concepts surrounding outpatient coding, specifically the Healthcare Common Procedural Coding System (HCPCS) and the CPT® (Current Procedural Terminology) coding system and includes a brief mention of the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnostic coding system.

Outpatient coding for procedures are recognized as a significant portion of revenue for hospitals and physicians.

Coding Systems

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) contained regulations that standardized coding systems for billing. The Centers for Medicare and Medicaid Services (CMS) and private healthcare payors use the HIPAA-approved coding systems to process claims. The ICD-10-CM and the HCPCS are used to classify healthcare services, determine appropriate payment, evaluate utilization and quality of health care services, and forecast future policy trends.

The ICD-10-CM coding system contains diagnosis codes to classify the medical necessity for patient encounters and procedure codes to classify hospital inpatient services. The HCPCS system is comprised of two levels of codes. The Level I coding system is published and maintained by the American Medical Association (AMA) as the Current Procedural Terminology (CPT) system. The Level II coding system is published and maintained by the CMS.

The table below provides an overview of practice setting coding systems, reimbursement systems, and update schedules.

Practice Setting	Coding System	Medicare Reimbursement System	Annual Update Schedule
Hospital Inpatient	ICD-10-CM diagnoses and procedures	Diagnosis-Related Group (DRG) system	October 1
Hospital Outpatient	ICD-10-CM diagnoses and HCPCS/CPT procedures	Ambulatory Payment Classification (APC) system	January 1
Physician Office	ICD-10-CM diagnoses and HCPCS/CPT procedures	Medicare Relative Based Resource Value System (RBRVS)	January 1

The chart below provides a view of the relationship between codes, coverage, and medical device payments.

Accurate and complete coding should “paint a picture” of a patient’s encounter, including the medical necessity for services. Only documented services may be coded. It is imperative for the physician’s dictated report, the hospital medical record, and the coded claim match to ensure timely and appropriate reimbursement for services rendered.

Outpatient Procedure Coding Systems

The appropriate outpatient procedural coding system selection depends upon two factors: whether the claim is billed for a physician practice or hospital and the type of payor. For example, Medicare requires G codes for certain services, whereas private payors may not. It is important to check with the payor as to specific coding system requirements.

The HCPCS Level I coding system is the most widely used by physicians and hospitals. The AMA creates and maintains CPT Codes. The CPT coding system is divided into two sections based loosely on medical specialty.

The HCPCS Level II coding system includes CMS-maintained codes for supplies and services provided by physicians, therapists, home health, outpatient departments, and other caregivers. The Level II codes are an important part of coding for many hospital procedures. These codes describe CMS procedures identified for tracking both volume and cost of specific healthcare devices and procedures. The G and C code HCPCS Level II categories may be assigned in place of CPT codes as temporary codes for CMS tracking until determination can be made for a permanent Level I HCPCS (CPT) code.

CMS assigns G and C codes differently across provider settings.

The second HCPCS Level II code series that is important for reporting procedures are C codes. CMS establishes categories for drugs, biologicals, and devices for hospital outpatient reporting and payment under the Ambulatory Payment Classification (APC) system.

The C codes assigned for vascular interventional procedures do not necessarily yield additional separate payment for the device under the APC system. However, CMS requires hospitals to report C codes for specific devices to capture the charges and determine cost for future payment system updates. Therefore, it is important that hospitals capture device charges accurately to ensure that the future payment system reflects the adequate cost of interventional procedures.

When the Outpatient Prospective Payment System (OPPS) was created by Medicare, hospitals used product-specific HCPCS codes (C codes) to receive reimbursement for implantable device technologies. Beginning April 1, 2001, hospitals could use category codes or the product specific

HCPCS codes to report implantable device technologies used in the hospital outpatient setting. Since 2001, Medicare has made numerous changes to the rules governing use of C codes including eliminating and reinstating the use of C codes and incorporating payment for many devices into the Ambulatory Payment Classification (APC) procedure payments.

In the Centers for Medicare and Medicaid Services (CMS) Final Rule for 2007 for the Hospital Outpatient Prospective Payment System, CMS continues to require the use of C codes. Requiring the use of C codes to identify devices used in conjunction with procedures paid for under OPPS will greatly improve the quality of claims data Medicare uses to establish APC payments in the future. The full list of C codes can be found on the CMS website at http://www.cms.hhs.gov.

Medicare has established outpatient coding edits dictating that specific C codes should be billed with certain CPT procedure codes. C codes were required as of January 1, 2005, and coding edits took effect April 1, 2005. The list of coding edits is not all inclusive, and Medicare will add edits to the list on a quarterly basis in conjunction with the quarterly Outpatient Code Editor (OCE) release. See Table 2 for a sample list of C codes.

Table - 2 Sample list of C codes

Code	Description
C1713	ANCHOR/SCREW FOR OPPOSING BONE-TO-BONE OR SOFT TISSUE-TOBONE (IMPLANTABLE)
C1714	CATHETER, TRANSLUMINAL ATHERECTOMY, DIRECTIONAL
C1715	BRACHYTHERAPY NEEDLE
C1716	BRACHYTHERAPY SOURCE, NON-STRANDED, GOLD-198, PER SOURCE
C1718	BRACHYTHERAPY SOURCE, IODINE 125, PER SOURCE
C1719	BRACHYTHERAPY SOURCE, NON-STRANDED, NON-HIGH DOSE RATE IRIDIUM-192, PER SOURCE
C1721	CARDIOVERTER-DEFIBRILLATOR, DUAL CHAMBER (IMPLANTABLE)
C1722	CARDIOVERTER-DEFIBRILLATOR, SINGLE CHAMBER (IMPLANTABLE)
C1724	CATHETER, TRANSLUMINAL ATHERECTOMY, ROTATIONAL
C1725	CATHETER, TRANSLUMINAL ANGIOPLASTY, NON-LASER (MAY INCLUDE GUIDANCE, INFUSION/PERFUSION CAPABILITY)

HCPCS Modifiers

Modifiers are two-digit combinations, which may follow a CPT or HCPCS Level II code. They are used to provide more specificity and explain numerically why a combination of codes may be appropriate for a particular case. Similar to the two levels of HCPCS codes, there are also two levels of modifiers (for example, Level I CPT modifiers and Level II HCPCS modifiers. Modifiers indicate that the billed procedure is modified in some way from the standard narrative of the code. Therefore, modifiers must be applied based on appropriate definition and usage to support payment adjustments. Most of the time, modifiers are not appended to HCPCS for supplies.

Hospital Revenue Codes

For hospital billing, all line item charges must be identified on the UB-04 (which transitioned from the UB-92 in mid-2007) by a 3-digit revenue code. The revenue code system helps identify broad classifications of services within defined areas of the hospital for cost reporting and reimbursement of services. For example, CMS instructs hospitals to bill most devices under revenue code 0278 along with the appropriate device C code and associated charges. Generally, CMS instructs hospitals to use the revenue code that reflects the department where the service was performed. Common revenue codes are listed below in Table 3. Additionally, a sample UB-92 claim form with examples of interventional coding can be found in Illustration 1 further below.

Table 3 – Sample revenue code categories

Code	Description
0255	Drugs Incident to Radiology
0270	General Supplies
0272	Sterile Supply
0278	Other Implants
0490	Ambulatory Surgical Care – Other
0610	Magnetic Resonance Imaging – General
0621	Supplies Incident to Radiology
0624	FDA Investigational Devices

Illustration 1 – Sample UB-92 claim form